Utilities in Japan may face financial strain under new safety standards

TOKYO - The new safety standards decided by the Nuclear Regulation Authority will likely cause significant financial burdens for power firms regardless of whether they continue operating reactors.

A rule limiting the operation of a nuclear reactor to 40 years in principle will take effect on July 8. Although a one-time extension of up to 20 years will be made possible, a special inspection will be required. This inspection will be more thorough than those conducted at the 30th and 40th year of operation under the current system.

In the United States, most nuclear reactors have been allowed to continue operating 40 years after they started if they pass safety screenings.

In Japan, however, 13 old nuclear reactors with designs created in or before 1975 use flammable cables that should be replaced with safer ones. The total length of such cables at one reactor extends several thousand kilometres.

A senior official of one electric power utility said in desperation, "We have no idea how long the repairs (to cables) will take or how much it will cost."

As power companies have already spent billions of yen on safety countermeasures per reactor, further repair costs will put a heavy financial strain on them.

Even if a utility decides to scrap its reactors, a large amount of money will be required to decommission them. If a utility decides to scrap a reactor that it originally planned to continue operating, it is unclear how the necessary funds will be procured, likely resulting in an increase in power rates and taxes.

Meanwhile, discussions on the construction of new power plants to replace the old ones have yet to start.

The decommissioning of nuclear reactors is certain to have a significant impact on the economies of municipalities and prefectures that host nuclear power plants.

The Liberal Democratic Party created this past week a task force to compile measures to promote local economies in preparation for an increase in the number of reactors to be decommissioned.