They once were the mightiest entities in Japan, but now power utility companies are facing a second straight year of combined losses of 16 billion dollars, amidst the delays in the restart of their nuclear reactors, plus the rising costs of importing fossil fuel due to the weaker yen. Now they would have to either raise consumer prices or seek further government assistance just to keep afloat.
Most of them expected to have some of their nuclear reactors up and running by now, but the Nuclear Regulation Authority is waiting until July to release the new safety standard requirements that all utility companies would have to follow. The problem is that operators would have to spend a lot to meet all these safety standards. Also, the more time that the reactors are offline, the more fossil fuel they would have to import to make up for the shortfall. So at this point, their only viable option is to raise utility prices for consumers, which some of them will do so by Wednesday.
Tokyo Electric Power (TEPCO), the operator of the Fukushima power plant, has already received government approval to do so, despite misgivings about raising prices that might lead to a voter backlash. Kansai Electric Power Co, Japan’s second-biggest regional monopoly, Kyushu Electric Power Co and Shikoku Electric Power Co are raising prices, but they are also expecting to get five reactors online by July. Kansai’s two reactors at the Oi nuclear plant are the only two still operating out of Japan’s 50 reactors. They will both go offline for refuelling in September and have received exceptions from the new safety standards from the NRA until then. With the nuclear reactors still not certain to go online anytime soon, imports of fossil fuels are increasing. By end of fiscal year March, Japan imported 87 million tons of the expensive liquified natural gas (LNG) and 106 million tons of thermal coal, a new record for the country.
[ via Reuters ]
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