Tokyo Electric Power Co. (TEPCO), the utility company responsible for operating the tsunami-hit Fukushima nuclear plant, revealed on Wednesday that it was going to seek urgent financial assistance from the Japanese government in order to continue recovery efforts. It seem the government’s 1 trillion yen (approx. $12.5 billion) bailout in May wasn’t enough, as the utility now says its compensation and clean-up costs are expected go well beyond the 5 trillion yen ($62 billion) estimates.
TEPCO officials stated in a news conference today that should Fukushima disaster recovery costs soar to 10 trillion yen, double what was estimated a few months ago, the utility would not be able to handle the financial responsibility. In addition to taking a 76% controlling stake in TEPCO in exchange for the bailout, the Japanese government has allocated an initial 5 trillion yen to be used for compensating victims and those who were evacuated, as well as radiation clean-up. But the total costs of such efforts are still uncertain, but it is predicted to eventually be more than $100 billion.
If they don’t receive any additional funding, TEPCO has said it will have no choice but to continue increasing electricity rates for public and business users. In order to return the company to profits, TEPCO stated its restructuring plan would include the restart of the Kashiwazaki-Kariwa nuclear plant in Niigata Prefecture. All but two of Japan’s reactors are currently in suspension, and with the anti-nuclear sentiment among the public at an all-time high, its unlikely TEPCO would get permission to restart the restart the plant, let alone meet new safety requirements still be drafted by the Nuclear Regulation Authority.[via Reuters]