With nuclear reactors all over Japan remaining idle three years after the Fukushima nuclear plant disaster, the industry is racking up massive losses affecting several electric utility firms. Kyushu Electric Power Co., which supplies power in the southern part of Japan, has sought financial support from the government, making it the second nuclear generator to appeal for aid.
Kyushu Electric confirmed on Wednesday that they have met with the state-owned Development Bank of Japan (DBJ) for financial support, a day after Hokkaido Electric Power Co, northern Japan’s power supplier approached the bank for the same purpose. Three years since the double earthquake and tsunami disaster that crippled the Fukushima complex, all 48 nuclear reactors in Japan have been shut down while waiting for the Nuclear Regulation Authority to give the go signal for a restart after stricter and more rigid safety checks. This has caused the nuclear operators to lose a total of ¥3.2 trillion ($31 billion) in two business years alone. Five of these operators are expecting to report losses with the fiscal year that just ended, including Kyushu Electric and Hokkaido Electric.
Because of strict policies preventing private banks to lend credit to companies that post three years straight of losses, the utility firms have turned to government-owned financial institutions to help them with losses due to costs of importing expensive fossil fuels while idle reactors drain them of capital. A senior industry source privy to Hokkaido’s finances said, “Capital funds have been continuously declining and liabilities might soon exceed assets.” Adding that, with deficits continuing to mount, borrowing from banks is quite difficult. The task of decommissioning the reactors will most likely fall on the shoulders of the plant operators, in anticipation of many idle reactors not passing the safety checks. Plant operators have since imported fossil fuels and have increased electric charges to ease the strain on the company’s finances.
Kysuhu has sought DBJ to sell ¥100 yen of preferred stock in the company. A spokesman from the firm, Yuki Hirano, said, “We are in consultations with the Development Bank of Japan about receiving capital support, but since nothing has been decided I’m unable to comment further.” Should both Kyushu Electric and Hokkaido Electric’s requests be approved, this would make three utility companies, including Fukushima operator, Tokyo Electric Power Co., receiving support from the government.