Government diverts quake recovery funds to help utility with idle reactors

June 28, 2013

THE ASAHI SHIMBUN

Part of the national budget for recovery efforts from the Great East Japan Earthquake has been diverted to help a utility company burdened with extra power generation costs after being told to keep its nuclear reactors offline, The Asahi Shimbun has learned.

A fund administered by the Environmental Partnership Council paid 1.9 billion yen ($19.2 million) in fiscal years 2011 and 2012 to Chubu Electric Power Co., which shut down all reactors at its Hamaoka nuclear plant in Shizuoka Prefecture in May 2011 at the request of the central government.

The third supplementary budget for fiscal 2011 set aside 9 billion yen as a "subsidy to facilitate thermal power generation" and 1 billion yen as a "subsidy to improve a facility using thermal effluent."

The 10 billion yen was mainly financed by post-quake recovery surtaxes, which are added on top of income taxes and other tax sources.

The thermal power generation subsidy is intended to cover the interest payments on new loans that utilities take out when they activate a thermal power plant as a replacement for idle nuclear reactors.

Although all power utilities in Japan are eligible for receiving subsidies from the fund, Chubu Electric has so far been the sole recipient.

Only two of Japan's 50 nuclear reactors have been reactivated since the March 2011 Great East Japan Earthquake after they were taken offline for regular inspections and other reasons.

The thermal effluent subsidy enables the central government to bear the burden for the Shizuoka prefectural thermal effluent utilization research center, a fish breeding facility that stopped receiving hot water from the adjacent Hamaoka nuclear plant when the latter was taken offline. The subsidy is provided via a fund administered by the prefectural government.

Chubu Electric had signed an agreement to provide hot effluent from the Hamaoka nuclear plant free of charge as part of a package of promotional measures for local communities. The prefectural fund has paid 400 million yen to cover the costs to install a new boiler for producing hot water without relying on the nuclear plant and to pay the electricity bills for generating the heat.

An industry ministry official told The Asahi Shimbun that part of the post-quake recovery budget was used in the latest cases because the Hamaoka nuclear plant was shut down at the request of the central government. The official added that the government will stop covering the interest payments for Chubu Electric beyond July, and will call for a return of the 6 billion to 7 billion yen remaining in the thermal power generation facilitation fund.

Regarding what to do with the thermal effluent fund, however, the official only said discussions were under way with relevant organizations.

The central government has yet to release information about the budget diversion. Only about 100 billion yen of the amount is expected to be returned to state coffers.

The Asahi Shimbun reported in May that more than 1 trillion yen in national post-quake recovery budget had been distributed to 20 or so funds that could be used outside the disaster zones. The revelation prompted the central government to begin reviewing those funds.

(This article was written by Eiji Zakoda and Hirotaka Kojo.)

THE ASAHI SHIMBUN
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