Fukushima nuclear plant compensation burden was secretly reduced

© Toyo Keizai Online The benefits of reduced nuclear power plant compensation payments are being extended to major electric power companies. Photo: Kyushu Electric Power’s Kawauchi Nuclear Power Plant

2022/07/04
An investigation by a non-profit organization has revealed that a portion of the cost of compensation for damages caused by the Fukushima nuclear power plant accident, which is borne by the major electric power companies, has been secretly reduced without proper explanation.

Photo: CALI’s release on March 31 regarding the determination of the general burden. This alone does not reveal the actual situation.

The amount of reduction amounts to 29.3 billion yen for one year in FY2021. Hajime Matsukubo, executive director of the NPO Nuclear Information and Documentation Office, who discovered this fact, criticizes the way it was done, saying, “There is no proper explanation to the public, the electricity users, and the way it was done is opaque.
Reducing the burden on electric power companies by approximately 20%.

Under the Act on Compensation for Nuclear Damage and Decommissioning of Nuclear Power Plants, the nine major electric power companies, including Tokyo Electric Power Company Holdings, Japan Atomic Power Company, and Japan Nuclear Fuel Limited, have been bearing a total of 11 companies’ costs called the general burden to cover the cost of compensation for victims of the nuclear accident.

A portion of this amount was paid in FY2011 and FY2012, and the full amount in FY2013 and thereafter was paid to the Japan Atomic Energy Agency (hereafter referred to as “JNES”). In FY2020, an additional 30.5 billion yen was added as an additional burden, referred to as the “past portion” (see below).

When Makoto Yamazaki, a member of the House of Representatives of the Constitutional Democratic Party of Japan, submitted a written question based on Matsukubo’s point of view, the government responded that the actual reduction in the general burden for FY2021 is 29.3 billion yen. The actual burden for the same fiscal year was 133.7 billion yen.

According to Matsukubo, the burden for the nine companies, excluding Chubu Electric Power and Japan Atomic Power Company, was reduced by about 20% from the FY2020 level. Chubu Electric’s burden was increased by 2.8%, and the reduction for Japan Atomic Power Company was about 14%. The company had the special circumstance that it had been decommissioning nuclear power plants even before the accident.

Regarding the reduction, a CALC official explained, “With the major electric power companies in a difficult business situation, the companies requested a reduction in the existing level of the general burden, which had been determined based on profit levels prior to the Fukushima nuclear accident.

© Toyo Keizai Online Release issued by JNES on March 31

The total amount of general contributions for FY2021, which CALI announced on March 31 after receiving approval from the Minister of Economy, Trade and Industry, was 194.7 billion yen, up 1.5 billion yen from the previous fiscal year. The aforementioned person in charge said, “The total amount of the general burden itself has not changed significantly compared to FY2020, and the burden on electricity users as a whole will remain the same. The total amount of the general burden itself has not changed significantly compared to FY2020, and the burden on electricity users as a whole has not changed.

However, there is a trick to this explanation.

There are two types of general contributions: one is the contribution related to compensation for the Fukushima nuclear power plant accident. The other is a past general burden created in 2015 when it was discovered that the cost of compensation was much higher than initially expected, and the increased amount was added to the transmission charges (charges for the use of transmission and distribution lines) in order to recover it. The new fee is to be collected from the second half of FY2020, as it should have been collected from 1966, when Japan’s first commercial nuclear power plant went into operation, to 2011, when the Fukushima nuclear power plant accident occurred, but had not been collected.

The amount of the past due amount was approximately 61 billion yen in FY2021, when a full year’s worth of fees was collected. 30.5 billion yen in FY2021 was a year-on-year increase of the past due amount, which overshadowed the former amount of reduced fees (29.3 billion yen).
METI and CALI should provide a proper explanation.

A significant portion of the conventional general burden is included in the cost of electricity rates and passed on to users. If the general burden has been reduced, shouldn’t it be used as a source of funds to reduce electricity rates?

Another problem is that the Ministry of Economy, Trade and Industry, which is in charge of approving electricity rates, has not provided proper explanations. When important utility rates are revised, the Consumer Affairs Agency and the Consumer Commission have a system to check the revision. However, the Consumer Affairs Agency says, “There have been no specific consultations and we have not received any information about the reduction of the general burden fee,” since it is not related to the revision of electricity rates.

On the other hand, one member of the Consumer Affairs Committee said, “This is the first time I have heard about this and I am surprised. The way it is done is opaque,” he told Toyo Keizai.

In addition to the complicated structure and method of determining electricity rates, costs related to nuclear power plants have been added to rates in the form of a roof over the head, with new fees collected retroactively after accidents have occurred. Moreover, “the method of determining the general burden is a black box” (Matsukubo).

Currently, the price of natural gas and other fossil fuels is soaring, causing electricity prices to rise, and households are finding it tougher to make ends meet. The fact that behind the scenes the electric power companies were secretly allowed to reduce their burden may cause suspicion toward the electric power administration. The Ministry of Economy, Trade and Industry (METI) and the Japan Atomic Energy Agency (JAEA) should reveal the actual situation of the reduction.

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