Chubu Electric’s Board Meets on Possible Shutdown of Nuclear Power Plant

Chubu Electric Power Co.’s board met to discuss a possible closure of its sole nuclear plant after Japanese Prime Minister Naoto Kan expressed concern the facility may not be able to withstand a powerful earthquake and tsunami.

No decision was made on whether to idle the No. 4 and No. 5 reactors at Hamaoka plant during the meeting in Nagoya today, Tokyo-based spokesman Akio Miyazaki said by telephone. The board will reconvene at a future date, he said, without elaborating.

Kan yesterday asked Japan’s third-biggest utility to shut Hamaoka, citing a government study that showed an 87 percent likelihood of a magnitude-8 quake striking the area within 30 years. The call to halt reactors is the government’s first since a temblor and tsunami hit northeastern Japan in March and caused the world’s worst nuclear accident in 25 years.

“Chubu is making a lot of effort to ensure safety, but that’s not enough,” Minister of Economy, Trade and Industry Banri Kaieda told reporters yesterday. “It must stop operations at the plant until it implements measures such as making the reactor-building watertight and building a coastal levee.”

Chubu Electric continued operating the 1,137-megawatt No. 4 reactor and the 1,380-megawatt No. 5 reactor at Hamaoka after the March 11 temblor, which crippled Tokyo Electric Power Co.’s Fukushima Dai-Ichi plant. The 1,100-megawatt No. 3 unit at Hamaoka has been shut for regular checks since November, while No. 1 and No. 2 reactors are in the process of being scrapped.

In 2007, a district-level court rejected claims that Chubu Electric had underestimated the size of earthquakes that could hit the Hamaoka facility and the potential for serious damage to its reactors. The plant, 190 kilometers (118 miles) southwest of Tokyo, sits near a fault-line that the government monitors extensively for heightened seismic activity.

Offsetting Power Shortages

Tokyo Electric lost 21 percent of its total generating capacity on March 11 when the magnitude-9 quake and tsunami struck Fukushima, according to Bloomberg calculations based on reports released by the utility. The Hamaoka plant accounts for 11 percent of Chubu Electric’s total generating capacity.

Chubu Electric supplies to users in central Japan, while Tokyo Electric, the country’s biggest utility, provides power to the capital and eight surrounding prefectures. Kansai Electric Power Co., the second-largest utility, provides power to western Japan and operates three nuclear plants in Fukui prefecture.

“I have called and asked the president of Kansai Electric Power today to support power supply to Chubu Electric,” Kaieda said yesterday.

The government expects any electricity shortage caused by a shutdown of Hamaoka to be offset by increased output at thermal power stations and hydro-dams, according to Kaieda.

LNG Purchases

Chubu Electric may need to buy an additional 4 million metric tons of liquefied natural gas for thermal power generation in the year ending March 2012 if the No. 4 and No. 5 reactors are shut in May and should the No. 3 reactor remain off-line, according to company spokesman Miyazaki.

The extra LNG purchase will cost about 212.3 billion yen ($2.6 billion), according to Bloomberg calculations based on the latest average LNG import price compiled by the finance ministry. Chubu Electric typically buys about 10 million tons a year.

Chubu Electric’s profit forecast of 55 billion yen for the current fiscal year is based on the assumption that the No. 3 unit will resume operation in about two months, Kazuhiko Okabe, an operating officer, said on April 28.

The Hamaoka plant is located in Shizuoka, a prefecture with a population of 3.75 million, according to the local government’s website. The accident at the Fukushima facility, 220 kilometers north of Tokyo, has forced the evacuation of 50,000 families in the area.

To contact the reporters on this story: Yuji Okada in Tokyo at yokada6@bloomberg.net; Takashi Hirokawa in Tokyo at thirokawa@bloomberg.net

To contact the editor responsible for this story: Alexander Kwiatkowski at akwiatkowsk2@bloomberg.net.

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