The industry ministry has proposed starting a subsidiary to manage the nuclear power business of Tokyo Electric Power Co. Holdings Inc., hoping it will lead to an earlier restart of the Kashiwazaki-Kariwa nuclear power plant.
The Ministry of Economy, Trade and Industry also hopes the spinoff would boost profits to help the parent company cover the ballooning costs for the decommissioning of the crippled Fukushima No. 1 nuclear power plant and for compensating victims of the nuclear accident there.
The subsidiary’s headquarters would likely be set up in Niigata Prefecture, the location of the Kashiwazaki-Kariwa facility, one of the world’s largest nuclear power stations in output capacity.
The ministry's proposal came at a meeting Oct. 25 of a panel of academics and business executives discussing reform of TEPCO. The ministry believes the new entity would find it easier to make profits by collaborating with other leading electric power companies.
Decommissioning the Fukushima No. 1 nuclear plant and compensating victims of the 2011 nuclear disaster will remain under the responsibilities of TEPCO Holdings.
TEPCO owns the Fukushima No. 1 and No. 2 nuclear plants and the Kashiwazaki-Kariwa facility.
The new subsidiary would sit alongside three other operating companies set up in April. They oversee the operation of thermal power generation, electric retailing, and electricity transmission and distribution.
The ministry also said the annual decommissioning costs of the Fukushima No. 1 nuclear plant could increase from 80 billion yen ($76.9 million) to hundreds of billions of yen.
The costs are expected to surge in the coming years since the retrieval of melted nuclear fuel rods involves technological difficulties.
The combined costs for decommissioning and compensating victims are likely to jump from an estimated 11 trillion yen to 18 trillion yen.
The ministry hopes the proposal for founding a subsidiary to focus on the operation of the nuclear power business will lead to greater support from the public for a restart of the Kashiwazaki-Kariwa nuclear plant.
Two of the seven reactors there have been scrutinized by the Nuclear Regulation Authority on whether they meet safety guidelines set after the Fukushima catastrophe.
Starting a reactor would add about 100 billion yen in operating profits a year to TEPCO’s coffers since fossil fuels to fire thermal plants are expensive.
Setting up the main office of the subsidiary in Niigata Prefecture is intended to appease local residents. Former Governor Hirohiko Izumida, who was cautious about a restart of the Kashiwazaki-Kariwa plant, called for the move while he was in office.
New Niigata Governor Ryuichi Yoneyama, who has succeeded Izumida's stance and took office on Oct. 25, welcomed the ministry’s idea for a spinoff, calling it “a good direction.”
But he denied a restart “under current circumstances.”
The new governor has urged a more detailed inquiry into what went wrong during the Fukushima disaster before discussing the possible restart of the Kashiwazaki-Kariwa facility.
(This article was written by Yoichi Yonetani and Yuko Matsuura.)