Tokyo Electric Power Co. plans to seek about 600 billion yen ($7.7 billion) in additional aid for disaster compensation from a government fund following a review of evacuation zones, which will likely increase the number of evacuees and compensation required.
Tokyo Electric Power Co. plans to seek about 600 billion yen ($7.7 billion) in additional aid for disaster compensation from a government fund following a review of evacuation zones, which will likely increase the number of evacuees and compensation required.
TEPCO plans to submit a request to the Ministry of Economy, Trade and Industry by the end of the year, which is expected to be approved in early January.
The government plans to review the demarcation of evacuation zones and designate three new zones based on radiation levels, which could be announced as early as next week.
If a timetable is set for evacuees to return home, it would help provide an estimate for the amount of evacuation costs and losses to businesses from 2012.
At present, the total amount for additional compensation spending is estimated at about 600 billion yen.
The government's support fund will be loaned to TEPCO through the Nuclear Damage Liability Facilitation Fund, which is backed by the government and electric power companies.
The government can provide an additional 5 trillion yen to TEPCO since it has established a 5 trillion yen credit line to issue government bonds as a source of financial assistance.
Unlike regular government bonds, government compensation bonds are issued for the purpose of payment, like checks. The damage liability fund is to loan TEPCO the funds upon request.
The nuclear damage liability facilitation fund law enacted in August stipulates that the government financial assistance through the compensation bond should be used only for compensating those who were affected by the Fukushima No. 1 nuclear plant accident.
TEPCO is required to repay the financial assistance to the government. The amount the utility needs to pay other than for compensation, such as for growing thermal fuel costs to provide power in light of a reduction in nuclear power, has been ballooning. The utility plans to pay this cost by raising customers' electricity rates.
The latest request follows the utility's emergency special business plan submitted to the government in late October, which included cutting personnel costs and selling off assets. The government approved the utility's plan to obtain 890 billion yen in official funding.
A government screening panel on disputes for compensation for nuclear accidents announced the guidelines for those who voluntarily evacuated after the Fukushima No. 1 nuclear power plant accident.
Compensation under the guidelines is aimed at about 1.5 million people, or 75 percent of Fukushima Prefecture's residents.
Meanwhile, the government is discussing injecting 1 trillion yen into TEPCO to secure decommissioning costs for the crippled Fukushima plant and to bring the company under state control, which would in effect nationalize it.
Under the plan, the government-backed Nuclear Damage Liability Facilitation Fund would borrow funds from financial institutions. The government is discussing guaranteeing it will repay the loans if the utility becomes insolvent.
(This article was written by Tetsuo Kogure and Kazumasa Takenaka.)