Defying Opposition, Japan OKs TEPCO Plan to Revive Closed Power Plant

Disregarding strong public opposition and reneging on its own word, Japan on Wednesday has given Tokyo Electric Power Co. (TEPCO), embattled operator of the crippled Fukushima Daiichi nuclear power station, the go signal to revive its Kashiwazaki-Kariwa nuclear facility.

All of Japan's 48 nuclear power plants are offline, a consequence of what happened to Fukushima Daiichi in March 2011. Plans have been consistently flaunted that they will go online someday, but the public have been vehemently against it. The Kashiwazaki-Kariwa nuclear facility, located in Niigata Prefecture, is the world's biggest. The revival plan stipulates No 6 and No 7 reactors will go online as early as July 2014.

The revival plan likewise provides TEPCO to receive 4 trillion yen (US$38.3 billion) financial infusion from the state.

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Japan essentially approved the plan to ease its' financial spending on fossil fuel imports.

TEPCO alone burned twice as much coal for power generation in 2013 compared to a year ago, according to Bloomberg calculations, citing data from the embattled operator's Web site.

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It had planned to jack up electricity prices to recover the costs, but then it also knows the public won't be open to such idea.

"As an electricity utility, we'd like to have nuclear power as an option to sustain a stable power supply," Naomi Hirose, TEPCO president, told reporters on Wednesday in Tokyo. "If the Kashiwazaki-Kariwa plant restarts, the company will be able to generate electricity from sources that will allow us to cut rates."

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Toshimitsu Motegi, federal industry minister, however cautioned TEPCO that the opportunity to revive Kashiwazaki-Kariwa's No. 6 and No. 7 reactors was being given "so that you can complete paying compensation, decommissioning the (Fukushima) facility and providing a stable electricity supply."

Mana Nakazora, BNP Paribas SA's chief credit analyst in Tokyo, believed reviving Kashiwazaki-Kariwa is TEPCO's last chance to stay afloat.

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"The company faces a risk that its plan won't work if resumption of the Kashiwazaki-Kariwa plant is delayed," he was quoted by Bloomberg. "If the plant remains idled, losses will incur, and the public won't agree on increases in electricity charges when the utility tries to cover losses."

The revival plans likewise mandates cutting fuel costs by 650 billion yen annually. It also directed for the establishment of a joint venture with other utilities to purchase 40 million metric tonnes of liquefied natural gas per year. Kansai Electric Power and Tokyo Gas have been named as potential partners in the JV.

TEPCO intends to operate all seven reactors of the Kashiwazaki-Kariwa nuclear facility by fiscal year 2016.

Hirohiko Izumida, governor of the prefecture where the Kashiwazaki-Kariwa plant is located, remain concerned if TEPCO is really fit for the job in reviving, much more operating a nuclear power plant, following its highly public ill-prepared response to the March 2011 disaster.

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