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A Preposterous Proposal on Nuclear Accident Compensation

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The industry ministry has put forth a ridiculous proposal on financing compensation payments to victims of nuclear accidents.

In essence, the ministry’s proposal is designed to bail out operators of nuclear power plants that have failed to set aside compensation money for possible accidents at facilities that have been in service for decades.

To secure necessary funds for potentially huge compensation payments, the ministry wants to require old customers to bear part of the burden.

The Ministry of Economy, Trade and Industry, which regulates the power industry, has submitted this proposal to a panel of experts discussing the issue.

This effectively means shifting the cost of bad management to people who are not responsible, an approach that defies common sense in the world of business management and obscures the responsibility of the operators. The ministry should withdraw the proposal.

The law concerning compensation for nuclear accident-related damages stipulates that in principle operators are responsible for paying compensation for all damages caused by accidents at their facilities.

But the 2011 disaster at the Fukushima No. 1 nuclear power plant, operated by Tokyo Electric Power Co., prompted the government to set up an entity to pay compensation to the victims. Under this arrangement, TEPCO and other established electric utilities will pay back the money over a long period of time.

This new system, based on the notion of mutual help, is designed to get nuclear power plant operators involved in a joint effort to cover the risks of nuclear accidents.

The utilities involved are allowed to raise their electricity rates to finance contributions to the system. So the burden is actually borne by customers of the utilities.

The ministry’s new proposal would widen the scope of contributors to the pool of money for compensation payments. The new contributors include electricity suppliers that have entered the market in response to its liberalization even though they don’t operate nuclear power plants.

Specifically, the new utilities would be required to make contributions through the increased fees they pay to use the power transmission lines operated by established utilities. That would force almost all people in this country to shoulder part of the burden.

Here’s the ministry’s case for this scheme.

The money needed to pay compensation for damages caused by nuclear accidents should have been set aside since the 1960s, when nuclear power generation started in Japan. So it is appropriate to require people who paid low electricity rates that didn’t include this cost to bear the burden now.

Behind the ministry’s move is the fact that the total compensation amount related to the Fukushima nuclear disaster has already surpassed the original estimate and is now reaching 6 trillion yen ($54 billion). The amount is expected to grow in the coming years.

Even so, if past beneficiaries of low electricity rates are involved, the established utilities should be first forced to use the profits they accumulated in the past through their nuclear power operations.

At the very least, no consumer would accept such a new financial burden unless the utilities are held responsible for failing to save up for emergencies during the past half century.

The ministry has also proposed similar plans to tap the fees paid by new power suppliers for use of established utilities’ transmission cables to cover the costs of decommissioning the reactors at the crippled Fukushima plant and aging reactors at other plants.

The latest proposal is the third scheme based on this approach.

Imposing part of the burden on newcomers in the power market is tantamount to giving preferential treatment to nuclear power and undermines the fair competitive environment that is the foundation for power deregulation.

Some consumers have switched from established utilities to new power suppliers because of their aversion to nuclear power generation.

Clearly, adequate compensation should be paid to victims of nuclear accidents.

But the costs related to nuclear power generation should be shouldered by the operators of nuclear plants. An unreasonable scheme to shift this burden from the operators is simply unacceptable.

http://www.asahi.com/ajw/articles/AJ201611210025.html

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November 21, 2016 Posted by | Nuclear | , | Leave a comment

Gov’t may shift nuke accident, reactor decommissioning costs onto new power suppliers

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The government is moving to bill new electricity suppliers for a portion of nuclear reactor decommissioning costs and compensation payments related to the Fukushima nuclear disaster, it was learned on Sept. 7.

After decades under regional utility monopolies, the electricity supply market was opened to competition in April this year. The government apparently fears that the old monopolies such as Tokyo Electric Power Co. (TEPCO) lose too many customers to new suppliers and they may no longer be able to cover the high costs of decommissioning old reactors or compensate the victims of nuclear accidents, hence the move to shift some of the financial burden onto new market entrants.

However, these costs were originally supposed to be covered by the nine big utilities, and the government’s moves would essentially transfer that burden onto the Japanese people, making a clash more than likely.

Under the current system, large utilities must cover nuclear reactor operating expenses — including eventual decommissioning — from electricity bill income. Also, TEPCO receives monies to cover Fukushima nuclear disaster compensation claims from the government-licensed Nuclear Damage Compensation and Decommissioning Facilitation Corp. (NDF), which is in turn funded by all the large utility companies.

The new system being considered by the government would spread the financial burden of nuclear accident compensation and reactor decommissioning to new electricity suppliers, lightening the load on the big utilities. The government estimates the total cost for reactor decommissioning plus Fukushima nuclear disaster compensation paid before the NDF was established at some 8 trillion yen. The new power suppliers would likely pass on their share of these costs to their customers, resulting in monthly power bills up to about 200 yen higher than at present for an average three-person household.

However, forcing customers of the new electricity firms to pay for the old utilities to decommission their reactors and for TEPCO’s nuclear disaster liabilities runs counter to the goals of liberalizing the electricity market, which was intended to push down prices through competition. It would also in essence be corporate welfare for the big utilities operating nuclear plants.

A sub-committee to debate the new system will be established under the Advisory Committee for Natural Resources and Energy reporting to the minister of economy, trade and industry. The committee will decide on what direction to take by the end of this year, with an eye to submitting a bill to revise the Electricity Business Act to the ordinary Diet session next year.

http://mainichi.jp/english/articles/20160908/p2a/00m/0na/006000c

September 9, 2016 Posted by | Japan | , , , , | Leave a comment

Gov’t cited as second-least reliable source of info on nuclear accidents: survey

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Respondents to a survey in Shizuoka Prefecture, which houses Chubu Electric Power Co.’s Hamaoka Nuclear Power Plant, have cited the government as the second-least reliable source of information on nuclear accidents.

A total of 29.2 percent of respondents in the survey by Hirotada Hirose, a professor emeritus at Tokyo Women’s Christian University, cited the central government and its ministries and agencies as the least reliable source of information in the event of a nuclear accident. The figure was topped only by “social networking services (SNS), at 36.7 percent, highlighting deep-rooted mistrust in the government as a source of information.

Conducted between May and June, the survey targeted the city of Omaezaki, where the Hamaoka Nuclear Power Plant stands, and 10 municipalities within a 31-kilometer radius of the plant, designated as urgent protective action planning zones (UPZs). A total of 360 people between the ages of 18 and 79 were interviewed directly by researchers.

The respondents were asked to choose from nine sources of information, not including nuclear power companies, which would be responsible for the incidents. Besides SNS and the central government and its ministries and agencies, the next most commonly cited unreliable sources of information were “independent reports by TV stations” at 11.9 percent, and “international organizations such as the United Nations,” at 4.4 percent. “Independent reports by newspapers” came in at 2.2 percent.

When asked for the “most reliable” source, respondents’ top answer was “prefectures and municipalities,” at 41.4 percent, while “the government, its ministries and agencies,” was selected by 11.7 percent of respondents.

“If the credibility level of the government is this low, it could have a negative effect during evacuations. If the government is moving to restart nuclear reactors, then it first should make an effort to clear away the sense of mistrust,” Hirose said.

http://mainichi.jp/english/articles/20160726/p2a/00m/0na/018000c

July 28, 2016 Posted by | Japan | , , | Leave a comment