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Japanese nuclear utilities call for tax-payer support as they post losses

text-my-money-2Japanese utilities post losses, seek state support  Star Online 2 May 14 TOKYO: Japan’s nuclear-reliant utilities reported losses for the third straight year and warned of further electricity rate hikes to pay for surging fuel imports as they face an uncertain outlook for restarting idled reactors.

Six of Japan’s nine big regional power companies, all of which own reactors, reported a combined net loss of US$3.3bil as they face the rising fuel costs and also spend billions of US dollars to flag-japanupgrade nuclear facilities to meet new regulatory standards. “We can no longer deny the possibility that we will not be able to restart a nuclear plant for some time,” Kansai Electric Power president Makoto Yagi told an earnings briefing, adding that another electricity rate hike might become inevitable. It raised rates by 9.75% last May.

Kansai Electric, Japan’s second-largest utility by revenue which supplies nearly one-fifth of the nation’s electricity, reported a 97.4 billion yen (US$950mil) net loss for the fiscal year that ended on March 31, its third consecutive year of losses.

Kyushu Electric Power and Hokkaido Electric Power said on Wednesday they would request financial support from the government-affiliated Development Bank of Japan, asking it to buy 150 billion yen in preferred shares in the two utilities.

Kyushu Electric serves Japan’s southern main island which is home to several auto and chip plants, while Hokkaido Electric serves the northern-most island.

The three consecutive years of net losses for utilities will make it difficult for them to secure further private-sector loans under standard Japanese banking practices, pushing firms like Kyushu and Hokkaido to seek public support……..Even in the most optimistic scenario, analysts and industry watchers say Japan may only be able to restart one-third of its reactors, while 17 are unlikely ever to come back online due to their age, location or proximity to suspected active fault lines. — Reuters


May 3, 2014 - Posted by | business and costs, Japan

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