The government has delayed finalizing a redress plan to help Tokyo Electric Power Co. compensate victims of the Fukushima nuclear crisis.
Prime Minister Naoto Kan had initially hoped to conclude the plan Thursday. However, it ran into opposition from a group of lawmakers from his ruling Democratic Party of Japan, who urged the government to reduce Tepco’s liability on the grounds that the nuclear accident was caused by the March 11 earthquake and tsunami.
The government eventually obtained their consent Thursday evening and plans to hold final discussions on how the beleaguered utility should handle the trillions of yen in redress demands on Friday.
The plan will create a new entity to facilitate payments and monitor Tepco’s streamlining efforts.
On Wednesday, the utility decided to accept all of the government’s conditions for receiving state support after concern grew that it could face a capital shortfall.
Under the conditions set out by the government, Tepco is to refrain from capping payments in advance, make maximum cost-cutting efforts, and accept an investigation into its management by a third-party panel to be set up by the government.
The entity will also play a role in injecting public money into Tepco if it ends up running out of capital. Nine other power utilities that run nuclear power plants will also hold stakes in the body.
The government will issue and allocate to the institution a type of bond that carries no interest and can be cashed when necessary so it can secure funding to support Tepco.
If public funds are injected, Tepco will freeze dividend payments on common stock, repay the money at a level that won’t inhibit its ability to keep power supplies stable, and finish repayment in 10 to 13 years so it can return to an ordinary private company with no state involvement.
The new body is also expected to function as an insurance entity in case of future nuclear accidents.
The government is likely to allow power companies other than Tepco to raise their electricity prices so they can make contributions to the nuclear safety net.
Crippled by the March quake and tsunami that devastated the coastal areas of the Tohoku region, the Fukushima No. 1 nuclear plant has been leaking massive amounts of radioactive substances into the air and sea after the waves took out its cooling systems..
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