Tokyo Electric Power Co. submitted a business plan to regain financial health to industry minister Yukio Edano on April 27 as a step to receive an injection of taxpayer money.
The embattled operator of the disabled Fukushima No. 1 nuclear power plant said it will accelerate its restructuring efforts under temporary state control to bring its operations back into the black in the year through March 2014, according to the turnaround plan.
But the blueprint is based on two key assumptions: a 10-percent increase in electricity rates charged to households from July this year, and the resumption of operations of idled reactors at the company's Kashiwazaki-Kariwa nuclear power plant in Niigata Prefecture in the next fiscal year.
This is an unrealistic and unreasonable plan.
It's true that TEPCO has no choice but to expand thermal power generation, at least for the time being, to secure enough capacity to meet demand. Some rate increases to pass the consequent rise in fuel costs onto consumers is probably inevitable, but such a rate hike can only be acceptable after the company has made all possible cost-cutting efforts.
The high-handed way in which TEPCO has tried to raise rates for large corporate customers has deepened consumers' distrust of the utility. But consumers can't switch to another power supplier under the current system of regional monopolies by electric utilities.
The expected change of top management is unlikely to make it much easier for TEPCO to win public support for a rate raise.
An even tougher challenge for TEPCO is to restart offline reactors at the Kashiwazaki-Kariwa plant.
TEPCO is directly responsible for dealing with the consequences of the disastrous accident at the Fukushima No. 1 plant.
The company's terribly inept response to the nuclear disaster in its immediate wake is still a fresh memory.
The company's report on the stress tests on its reactors was found to contain 239 written errors, a far larger number than those for other electric power companies.
Serious questions have been raised about TEPCO's ability to operate nuclear power plants safely.
The company is grossly mistaken in believing that it can include the restart of reactors in its business plan at this stage.
TEPCO, however, has been forced to draw up a plan to become profitable again based on such unrealistic assumptions because the government's promise to ensure the company's repayment of the public funds it receives requires keeping it alive in some way as a commercially viable utility.
Given the enormous costs of compensation for victims of the nuclear disaster, decontamination of areas polluted by radiation and decommissioning of the stricken reactors, however, it is clear that there is little hope of realizing that vision.
It is certain that the financial burden will have to be borne by the public sooner or later through rate hikes and tax increases.
Putting off the solving of the problem in order to avoid forcing consumers and taxpayers to foot the bill now could end up increasing the eventual financial burden they need to shoulder. Such foot-dragging would also stall the necessary reform of TEPCO.
We have urged the government to put the utility under state control and lead the efforts to swiftly pay compensation to victims. We have also argued that TEPCO should be reorganized through an effective bankruptcy process according to the original plan for its future.
The administration of Prime Minister Yoshihiko Noda needs to quickly abandon its stopgap policy of keeping TEPCO alive as an independent business entity. It should then develop a new framework for dealing with the company's trouble after making clear the role of the government in cleaning up the mess created by the accident. The framework should be designed to minimize the financial burden on the public.
The Diet also has a vital role to play. During last summer's deliberations on legislation to provide public financial support to TEPCO, the Diet made a revision to the bill to make clear the government's responsibility.
It is time for both the ruling Democratic Party of Japan and the main opposition Liberal Democratic Party to take responsibility for promoting nuclear power generation.
--The Asahi Shimbun, April 28
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