Tokyo Electric Power led declines among Japan’s utilities after a Nikkei news report that a tariff increase will be less than anticipated amid escalating opposition to the country’s plans for restarting nuclear reactors and reorganizing the industry.
Tepco, as the utility at the center of last year’s nuclear disaster is also known, dropped 12 per cent to 123 yen, a new low. Hokuriku Electric Power plunged 8.3 per cent to 1,115 yen after Kyodo News reported a fault line beneath one of the company’s reactors may be active. The Topix Electric Power & Gas Index fell 4.6 per cent, the most in a year, after tens of thousands of people rallied in Tokyo to protest nuclear power.
Kansai Electric Power, the country’s second-largest utility, fell 7.2 per cent to 809 yen after alarms went off at a reactor scheduled for restart tomorrow, underscoring protesters’ concerns about the safety of the country’s nuclear generators. A government advisory body on July 13 recommended breaking up the regional monopolies enjoyed by generators.
“If the active fault is relatively big, that may prevent the company from resuming operations,” said Hidetoshi Shioda, an energy analyst at SMBC Nikko Securities in Tokyo. “Investors are probably concerned that if you look elsewhere, you’ll find similar problems.”
Government research suggests a fault may be active beneath Hokuriku Electric’s Shika nuclear power station about 300 kilometers (190 miles) northwest of Tokyo, Kyodo said, citing people familiar with the matter.
On April 26, the Nuclear and Industrial Safety Agency, known as NISA, did release findings that said Japan Atomic Power’s Tsuruga nuclear plant northeast of Osaka may be on an active earthquake fault line. NISA said an investigation is needed to assess the risk before any decision is made to restart the Tsuruga reactors.
Ohi restart
Japan’s nuclear regulator said on July 15 that the No. 4 reactor at Kansai Electric’s Ohi plant can be restarted as planned because pressure gains that triggered alarms didn’t damage equipment and operations won’t be affected, according to a statement on the utility’s website. All of Japan’s reactors were shut following last year’s nuclear disaster.
Tens of thousands of people packed Tokyo’s Yoyogi Park yesterday to oppose the restart of nuclear reactors in Japan’s biggest anti-nuclear rally since the meltdowns at Tokyo Electric Power’s Fukushima Dai-Ichi atomic plant. Prime Minister Yoshihiko Noda last month approved the restart of two reactors at Kansai Electric’s Ohi plant.
In other potentially damaging developments for power utilities, an advisory board to the Ministry of Economy, Trade and Industry on July 13 said the electricity transmission and distribution networks should be spun off from the utilities’ generating plants or be taken over by an independent operator.
New trend
“It seems utilities cannot change the trend toward the separation of power generation and transmission operations. The market had expected it, but it’s still a negative factor,” said Takashi Aoki, a fund manager at Mizuho Asset Management.
Tokyo Electric has also run into objections from Japan’s Consumer Affairs Agency over plans to raise electricity prices to help pay for the Fukushima disaster. The agency said today the utility needs to cut labor costs of its employees by at least 30 per cent, compared with the current 20 to 25 per cent, as part of its assessment of the utility’s rate increase plan.
The agency’s report didn’t specify a figure for the rate increase, though Kyodo News reported today the government aims to cap the electricity price rise for households and small users at less than 9 per cent from a planned 10.28 per cent.
