Payment for Power Company without Operation

Nuclear Regulation Authority (NRA) started the process for unprecedented denial of resumption of a reactor of nuclear power plant owned by Japan Atomic Power Company (JAPC). JAPC has received payment for maintenance of its facilities from local power companies, despite supplying no electric power. Having no reactor operating, it is skeptical that the profit is appropriate income of a power company. 

JAPC was established in 1957 as a company, with investment of nine domestic major power companies, for wholesaling electric power produced by nuclear power generation. Among JAPC’s four reactors, one in Tokai Nuclear Power Plant in Ibaraki and #1 in Tsuruga Nuclear Power Plant in Fukui are in the process of dismantlement. Reactor #2 in Tsuruga and another in Tokai Daini Nuclear Power Plant stopped their operation after the severe accident in Fukushima Daiichi Nuclear Power Plant.

 

NRA concluded in July that the reactor #2 in Tsuruga would not pass the safety regulation for resumption of its operation, due to an active fault underground of the site. NRA began to write a report about the examination, which will be approved later this month and officially dismiss JAPC’s request for resumption in October. Although JAPC is going to make further effort on the fault, NRA is not interested in it.

 

The main income of JAPC is “basic payment” from its clients which are five power company of Tokyo, Tohoku, Chubu, Kansai and Hokuriku. Basic payment is calculated based on cost for maintenance of nuclear power plants. The five power companies need to pay for the cost, even if JAPC does not operate any nuclear reactors. According to a news report of Nikkei Shimbun, five power companies have paid 1.4 trillion yen for basic payment in these thirteen years.

 

It is strange that JAPC produces profit when it does not operate any reactor. The greatest supporter for JAPC is Tokyo Electric Power Company (TEPCO). TEPCO has been paying 55 billion yen for basic payment every year. Mainichi Shimbun revealed that TEPCO has paid additional 140 billion yen for safety measures between fiscal year 2021 and 2023.

 

The payment was regarded as advance payment for future provision of electricity produced by nuclear power plants. However, JAPC has no prospect for resumption of its nuclear reactors. It is unclear how JAPC, as a power company specialized in nuclear power generation, is going to provide electricity.

 

TEPCO has been adding the cost for basic payment for JAPC on utility fee for its users. While it has not added the cost for safety measures on the fee, it is possible that it will be paid by the users in the future. In short, the users have been paying cost for a nuclear power company which did not produce nuclear power at all. Although JAPC explains that it is abiding by legal requirements, shareholders of TEPCO may be frustrated with the system.

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