Tepco eyes 15pc fee hike for 3 years

TOKYO: Tokyo Electric Power Co , the operator of the wrecked Fukushima Daiichi nuclear power plant, is considering raising electricity charges by 15 percent for three years from next April, the Asahi newspaper reported on Wednesday.

The utility also plans to end cuts in staff bonuses, which has been part of its plan to cut costs, in the year to March 2016, the Asahi reported without citing a source.

Tokyo Electric faces a huge bill for compensating those affected by the radiation crisis at Fukushima, where the March earthquake and tsunami wrecked reactor cooling systems and triggered meltdowns, forcing 80,000 people to be evacuated from around the plant.

The utility, known as Tepco, denied the Asahi report, saying it has no such plans.

"We deem it essential to move forward fundamental streamlining by working on cutting costs and securing funds," Tepco said in a statement.

The struggling firm, whose compensation bill could reach $130 billion according to analysts, will need the support of a government-backed fund to avoid bankruptcy.

The fund will be financed with taxpayers' money and contributions from other utilities, which Tepco will pay back over several years, and the utility must submit a restructuring plan soon to receive money from the fund.

Japan's new trade minister Yukio Edano said on Tuesday that Tepco's creditors and shareholders should share in the burden of restructuring the utility as it grapples with huge costs from Fukushima.

The higher electricity charge will end after three years because Tepco will no longer need to cover higher costs for thermal fuel if reactors halted for maintenance checks are restarted by then, the Asahi said.

Of Tepco's 17 reactors, only two at its Kashiwazaki-Kariwa plant are running. Nationwide, only 11 out of 54 reactors are operating as heightened public safety concerns after Fukushima have prevented the restart of those shut for routine checks.

The government aims to restart halted reactors after their safety has been confirmed and local communities agree to a resumption. Japan may not have any nuclear reactors running by next May unless restarts are allowed.

Copyright Reuters, 2011