The Diet passed a bill Wednesday requiring Tokyo Electric Power Company Holdings Inc. to put aside extra funds to decommission its crisis-hit Fukushima nuclear power plant, as the state seeks to gain more financial control over the utility.
Under the revised law, the state-backed Nuclear Damage Compensation and Decommissioning Facilitation Corp. will also be involved in the decommissioning process.
Currently, Tepco has been using profits to pay for scrapping the Fukushima No. 1 plant, which was destroyed after a 2011 earthquake and tsunami triggered a triple meltdown.
The revised law is expected to take effect later this year. With the estimated cost of the decommissioning work already surging to ¥8 trillion from the previously forecast ¥2 trillion, a government panel has called for setting up a funding system that is not dependent on the company’s financial health.
The government projects the total cost to deal with the Fukushima nuclear disaster will reach ¥21.5 trillion, including decommissioning costs, compensation and decontamination work.
Under the new program, the state-backed organization will decide on the amount Tepco should store away each business year and the industry minister must approve it.
The utility must also formulate a financial plan and obtain the minister’s approval when it uses the reserve fund for its decommissioning work.
The new law will strengthen the monitoring power of authorities as well, enabling the industry ministry and the organization to conduct on-site inspections to check whether Tepco is putting aside the money.
The government has a major say in the utility’s operations after acquiring 50.1 percent of the company’s voting rights. Tepco faces huge compensation payments and decommissioning costs among other problems due to the 2011 disaster.
The industry ministry has projected roughly ¥300 billion will be needed annually for the next 30 years to complete the scrapping of the power plant, which involves the difficult procedure of extracting nuclear debris.
The costs could grow further. A study by a Tokyo-based private think tank has shown the bill for the decommissioning could balloon to between ¥11 trillion and ¥32 trillion assuming materials from the No. 1 to 3 reactors, which suffered core meltdowns, need to be specially treated for radioactive waste.
The Japan Center for Economic Research estimated the total cost of managing the disaster could reach ¥70 trillion, more than three times the government calculation.