A government fund will provide an additional 689.4 billion yen ($9.05 billion) in assistance to Tokyo Electric Power Co. to compensate those affected by the accident at the utility's Fukushima No. 1 nuclear power plant.
A government fund will provide an additional 689.4 billion yen ($9.05 billion) in assistance to Tokyo Electric Power Co. to compensate those affected by the accident at the utility's Fukushima No. 1 nuclear power plant.
The Nuclear Damage Liability Facilitation Fund (NDF) and TEPCO both asked for the approval of industry minister Yukio Edano, who is expected to give the green-light for the additional funds as early as next week.
If TEPCO fails to have the assistance measures approved before it releases its financial results for the April to December 2011 period by Feb. 14, it risks falling into a state of excess liabilities.
The latest decision brings the outstanding government assistance to cover compensation expenses to about 1.6 trillion yen. TEPCO requested the additional money because the government decided to redraw the evacuation zones around the crippled nuclear plant in April, meaning that many evacuees will remain unable to return home for the foreseeable future.
The utility had only been preparing to compensate evacuees until March this year, but it has now decided to extend that time frame by a year. Although it can compensate victims using the additional assistance fund, it must repay the government from future revenue.
TEPCO asked the NDF for additional assistance on Dec. 27, but the NDF said it could only approve the request if the utility sped up compensation payments and gave convincing explanations on why it planned to raise electricity rates for corporate clients in April.
The utility's president, Toshio Nishizawa, attended a meeting of the NDF steering committee on Feb. 3 and explained that the utility plans to increase staff handling the compensation payments from the current 7,600 to 10,000 to expedite the process. He also explained that TEPCO planned to review the margins of electricity rate hikes for corporate clients on the basis of a new set of calculation standards when the utility raises electricity rates for households in autumn.
The NDF steering committee approved the request for the additional assistance, although it said TEPCO should explain the planned rate increases in more detail.