Although Kansai Electric Power Co. aims to extend the life of the Mihama plant’s No. 3 reactor by 20 years, the operator may be forced to scrap the 39-year-old facility instead.

On Wednesday, Shunichi Tanaka, chairman of the Nuclear Regulation Authority, warned that if Kepco has not decided on the basic ground motion standards used as a basis for plant safety standards in the event of an earthquake by the end of August, inspections now underway will be cut off. The surveys are part of Kepco’s efforts to restart the unit and extend its operating life.

“If the ground motion standards aren’t set by the end of August, a major decision will have to be made,” Tanaka said.

The 826-megawatt Mihama No. 3 reactor will turn 40 years old at the end of 2016. Ending safety inspections would likely force Kepco to reconsider whether revenues generated over a span of 20 years would cover the costs of restarting it. That’s of particular concern given the reforms taking place in the electricity sector over the next few years, which are expected to boost competition.

Twenty years is the maximum extension possible for a 40-year-old plant.

Kepco has already announced plans to decommission the Mihama No. 1 and 2 reactors, which have roughly the same combined power output as the No. 3 reactor. To decommission these reactors would cost at least ¥67 billion. It would also take at least two decades, and would produce about 5000 tons of nuclear waste, whose final location for long-term disposal remains unclear.

Officials in Fukui Prefecture, especially in Mihama, are also concerned about the fiscal impact of the plant’s decommissioning. Since the mid-1970s, the town of Mihama, which has a population of only 10,000 people, has received ¥27.5 billion in nuclear-related government subsidies.

In 2013, about one third of the town’s budget was funded from such subsidies. Officials and businesses worry that decommissioning the No. 3 reactor will mean less official funding from Tokyo, and the potential loss of various “voluntary subsidies” Kepco has made over the years to the town.

Kepco officials said they will make every effort to restart the No. 3 plant as soon as possible. But the utility, which suffered a net loss of ¥148.3 billion in fiscal 2014, faces growing criticism from shareholders, including the cities of Osaka and Kobe, over its management of nuclear power plants and future energy plans.

Kepco announced at its June 25 shareholders meeting that it was necessary to build new nuclear plants. That’s despite advancements in renewable energy and a government proposal to reduce the nation’s reliance on nuclear power, which provided about one-third of Japan’s electricity in 2010, to about 20 to 22 percent by 2030.