The dispute over trillions of yen needed to compensate victims of the Fukushima No. 1 nuclear power plant disaster is now in the hands of the Nuclear Damage Compensation Facilitation Corp., which started operations Sept. 26.
The dispute over trillions of yen needed to compensate victims of the Fukushima No. 1 nuclear power plant disaster is now in the hands of the Nuclear Damage Compensation Facilitation Corp., which started operations Sept. 26.
The main issues facing the organization, established by the government and operators of nuclear power plants, are the planned electricity rate hike and cost-cutting measures of the plant's operator, Tokyo Electric Power Co.
The organization's first task is to work with TEPCO to compile a special business plan for the coming 10 years by late October. TEPCO needs government approval of the business plan to receive financial assistance from the compensation support organization in providing damages to victims of the nuclear accident.
TEPCO wants to include an electricity rate hike of about 15 percent in the plan, saying it is necessary to cover about 1 trillion yen ($13 billion) in additional annual fuel costs for thermal power generation to make up for lost capacity at idle nuclear power plants.
"We want to submit the special business plan (to the government) as soon as possible," TEPCO President Toshio Nishizawa told a news conference on Sept. 26.
Cost-cutting measures are considered essential for an electricity rate hike to be approved.
At a Sept. 20 meeting of the government's investigation committee, which has been examining TEPCO's assets for compensation since June, Nishizawa said the company is considering cutting several thousands of jobs and reducing corporate pension payouts.
The committee's report, expected in early October, will be reflected on the special business plan.
But the five members of the committee are still divided on key points. For example, some members oppose a further cut in personnel costs, fearing it would undermine morale among TEPCO employees.
However, industry minister Yukio Edano said Sept. 26 that executives of electric power companies are overpaid because the companies are virtually shielded from competition and essentially guaranteed profits.
"Given the current structure of electric power companies, board members' salaries should be set at the same level as public servants or workers at independent administrative agencies," Edano said at the opening ceremony of the compensation support organization.
The investigation committee has also been discussing whether industry frameworks should be reviewed, including the way power companies calculate costs to determine electricity rates and the system in which these companies provide both electricity generation and transmission services.
The panel members will continue tackling these issues because they have moved to the compensation support organization's decision-making steering committee.
At a news conference on Sept. 26, Takehiko Sugiyama, chief of the organization, said the size of compensation is expected to be 3 trillion to 4 trillion yen but added that it could increase depending on work to remove radioactivity.
Edano also told TEPCO Executive Vice President Masao Yamazaki to simplify procedures for requesting compensation over the nuclear accident because TEPCO's application form is more than 50 pages.
"You cannot gain understanding unless you work from the standpoint of victims," Edano said.
Yamazaki promised to ease the clerical burden.