Utility could seek 20 billion yen from TEPCO over nuclear disaster

April 24, 2013

THE ASAHI SHIMBUN

Solidarity clearly has no place in Japan's nuclear power industry.

That would seem to be the case as Tohoku Electric Power Co. prepares to seek compensation for lost business from Tokyo Electric Power Co. over the Fukushima nuclear disaster.

Sources said April 24 that Tohoku Electric could seek more than 20 billion yen ($203 million) from TEPCO, operator of the crippled Fukushima No. 1 nuclear power plant.

The damages arise from the accident at the plant triggered by the earthquake and tsunami disaster just over two years ago.

It is extremely rare for one electric power company to seek compensation from another since all the utilities have been united in promoting nuclear energy and other issues in the past.

Tohoku Electric provides electricity in Fukushima Prefecture. The reactor meltdowns triggered a mass evacuation of residents.

The evacuation, coupled with a sharp reduction in economic activity, led to a 10-percent decrease in electricity sold in Fukushima Prefecture in fiscal 2011.

Tohoku Electric's corporate performance has been hit hard as a result of the nuclear accident. In February, it submitted an application with the central government to raise electricity rates.

Tohoku Electric, fearing it could become the target of sharp criticism from customers as well as a possible lawsuit by shareholders, apparently decided that seeking compensation from TEPCO was the way to go.

Tohoku Electric could also seek compensation for its lost investment in a proposed Namie-Odaka nuclear plant in Fukushima Prefecture.

The utility had invested 18.5 billion yen to cover the purchase of land and other costs. But in March this year the company announced it was abandoning the project because of strong opposition from local municipalities in the aftermath of the Fukushima nuclear accident.

The proposed Namie-Odaka nuclear plant would have been constructed some 10 kilometers north of the stricken Fukushima No. 1 plant.

Tohoku Electric also operated service centers in the Fukushima municipalities of Namie and Tomioka that served as bases for its engineers. However, those facilities were rendered unusable due to release of radioactive materials from the wrecked Fukushima plant.

In seeking compensation from TEPCO, Tohoku Electric will have to follow guidelines established by the central government and differentiate damages stemming from the nuclear accident from those caused by the Great East Japan Earthquake and tsunami.

TEPCO has already paid out some 2 trillion yen to local residents in compensation for the nuclear accident. The figure is expected to increase.

Sources said Tohoku Electric officials would have to give careful consideration to the timing of its compensation request so it does not conflict with compensation payments to local residents.

A high-ranking Tohoku Electric official said discussions had already begun with TEPCO on compensation.

Asked for a comment, a TEPCO public relations official told The Asahi Shimbun that the utility was not aware of such talks.

Tohoku Electric and TEPCO provide electricity to each other on a daily basis because their supply areas are adjacent to each other.

At one time, the two companies closely cooperated on other matters.

The two companies jointly constructed the No. 1 reactor at Tohoku Electric's Higashidori nuclear plant in Aomori Prefecture as well as the No. 1 reactor at TEPCO's Kashiwazaki-Kariwa nuclear plant in Niigata Prefecture.

THE ASAHI SHIMBUN
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Tohoku Electric Power Co. President Makoto Kaiwa explains the decision to abandon the planned Namie-Odaka nuclear power plant in March. (Asahi Shimbun file photo)

Tohoku Electric Power Co. President Makoto Kaiwa explains the decision to abandon the planned Namie-Odaka nuclear power plant in March. (Asahi Shimbun file photo)

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  • Tohoku Electric Power Co. President Makoto Kaiwa explains the decision to abandon the planned Namie-Odaka nuclear power plant in March. (Asahi Shimbun file photo)

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