The industry ministry is considering revising an accounting rule to alleviate the financial burden on electricity companies from decommissioning nuclear power plants, sources said Saturday.
The change would allow multiyear instead of single-year booking of losses resulting from dismantling atomic energy reactors, according to the sources.
The Ministry of Economy, Trade and Industry is looking to allow utilities to pass on multiyear losses to users through higher electricity rates, the sources said.
But as the cost of decommissioning is already factored into electricity rates, there could be an outcry over slapping customers with the additional financial burden.
Under the current rule, utilities are required to build reserves for decommissioning reactors over their expected lifetimes of 40 years or more. If a plant is scrapped sooner, the operator must cover any shortage of reserves.
In what may turn into an earlier-than-scheduled decommissioning case, the Nuclear Regulation Authority recently acknowledged that reactor 2 at Japan Atomic Power Co.’s Tsuruga plant in Fukui Prefecture sits atop an active fault, which is not permissible under the nuclear regulatory framework.
If the unit is dismantled, Japan Atomic Power is expected to suffer losses in the range of ¥100 billion, a huge financial blow.
METI plans to set up a panel of experts to examine the rule change with the aim of implementing a new regulation by the next-March end of the current fiscal year, the sources said.
According to a METI estimate, the nation’s 10 power companies operating nuclear reactors would incur a combined ¥4.4 trillion in single-year losses if all of them were to be decommissioned.
In a time of both misinformation and too much information, quality journalism is more crucial than ever.
By subscribing, you can help us get the story right.