July 17 (Bloomberg) -- Japan's government ordered Tokyo Electric Power Co. to keep its Kashiwazaki-Kariwa nuclear power station, the world's biggest, shut pending safety checks after an earthquake caused a radioactive leak.

A magnitude 6.8 earthquake struck Niigata prefecture in central Japan, killing nine people, toppling houses and causing contaminated water from the No. 6 reactor building to escape into the sea. Trade Minister Akira Amari today handed the order to utility President Tsunehisa Katsumata, the ministry said. Tokyo Electric shares dropped to a seven-month low.

Tokyo Electric idled four of the seven reactors at Kashiwazaki-Kariwa after yesterday's earthquake, it said on its Web site. The ground vibration at the plant, located 9 kilometers (5.6 miles) from the epicenter, was more than the station was designed to withstand, said Yasuhisa Shiozaki, the government's chief cabinet secretary.

``It's negative for Tokyo Electric, as they have to boost operations at thermal power plants to make up for the loss caused by the nuclear shutdown,'' Hirofumi Kawachi, an analyst at Mizuho Investors Securities Co. in Tokyo, said by phone today. ``Costs will rise as well'' as oil prices are high, he said.

Shares of Tokyo Electric fell 1.1 percent to 3,750 yen, the lowest close since Dec. 15. They earlier dropped as much as 2.4 percent on the Tokyo Stock Exchange.

Japan has 55 reactors that generate about one-third of the country's power, making the nation the third-largest nuclear producer in the world.

Considering Options

The Kashiwazaki-Kariwa facility's total generating capacity is 8,212 megawatts, about seven percent of Tokyo Electric's output. Three of the seven reactors were already shut for maintenance when the tremor hit the region at about 10:15 a.m. local time yesterday.

``We are currently considering measures, including options to boost operations at thermal power plants, to ensure supply in the peak demand season,'' Tokyo Electric spokesman Shogo Fukuda said by phone today.

The utility's current generating capacity stands at 58.5 million kilowatts, compared with estimated demand of about 48 million kilowatts, he said.

The Tokyo-based utility said on June 28 that it plans to restart two previously decommissioned thermal plants this month to ensure supply during summer. Power usage is typically the highest in July and August as consumers turn on air conditioners.

Peak Demand

Peak demand may reach as high as 61.1 million kilowatts around Tokyo and surrounding areas, according to an estimate by Tokyo Electric. A one degree Celsius increase in temperatures adds 1.7 million kilowatts to electricity consumption.

The earthquake led to a leakage of water that contains radioactive material, Tokyo Electric said on its Web site. The water escaped into the sea from a container that stores used nuclear fuels at the No. 6 reactor building. The utility said it found the leak at 12:50 p.m. yesterday and confirmed that the water contained radioactive material at 6:20 p.m.

``Tokyo Electric should have informed the trade ministry about the leakage much earlier,'' Amari said in the statement. The delay ``can trigger mistrust among the public,'' he said.

In November last year, Amari ordered Tokyo Electric and 11 other power producers to check all their generation plants by March 31 to ensure they were safe, following a series of data fabrications and accidents.

The producers reported 316 cases of illegal and improper operations at their nuclear power plants, including at the No. 1 reactor at Kashiwazaki-Kariwa. The utilities were ordered on April 20 to implement additional inspections at nine nuclear plants, after safety lapses over the past three decades.

To contact the reporters on this story: Megumi Yamanaka in Tokyo at myamanaka@bloomberg.net.

Last Updated: July 17, 2007 02:59 EDT