Japanese utilities post losses, seek state support

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 upgrade nuclear facilities to meet new regulatory standards.

All 48 of the nation’s reactors were steadily brought offline after the March 2011 earthquake and tsunami, which triggered three reactor meltdowns at the Fukushima Daiichi plant, the worst nuclear disaster since Chernobyl in 1986.

Utilities are required to take reactors down about once every 13 months for maintenance, and in the wake of the Fukushima crisis a number of factors, including local communities’ opposition, have prevented them from coming back online.

“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.

Kansai Electric, whose annual revenue exceeds its Kyushu and Hokkaido peers combined, repeated on Wednesday that it is not currently considering seeking financial support.

Japan’s utilities relied on nuclear plants to provide around 30% of their electricity output before the Fukushima disaster. Out of the nine regional monopolies with nuclear reactors, Kansai had the greatest dependency at nearly half.

Tokyo Electric Power, Japan’s biggest utility and operator of the destroyed Fukushima plant, returned to profit for the first time since 2009/10 with a 438.6 billion yen net profit, reflecting rate hikes and aggressive cost cutting.

An independent regulator set up after the Fukushima disaster has been vetting restart applications for 10 plants but has so far only fast-tracked Kyushu Electric’s Sendai nuclear station in south-western Japan.

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

Article type: metered
User Type: anonymous web
User Status:
Campaign ID: 1
Cxense type: free
User access status: 3
Subscribe now to our Premium Plan for an ad-free and unlimited reading experience!

Business , Japanese Utilities , finance


Next In Business News

IATA: Total air traffic surges 68% in August 2022
U.S. weekly jobless claims increase more than expected
Malaysian bubble tea chain brewing up rapid expansion, to revisit IPO plans
Hong Leong Banks introduce enhanced security measures to protect customers from fraud
Ringgit retreats from gains to close lower against US dollar
Nestcon bags RM91.18mil hydroelectric project
Yinson secures US$720mil financing for FPSO Maria Quit�ria
Bursa Malaysia Derivatives to host inaugural East Malaysia POC 2022 in Kota Kinabalu
Tropicana and Marriott ink to build Sheraton in Langkawi
Citaglobal obtains shareholders’ nod to buy CESSB for RM140mil

Others Also Read