Tepco to Ask Government for $9.1 Billion for Fukushima Payout, Nikkei Says

Tokyo Electric Power Co. will ask the government for 700 billion yen ($9.1 billion) to avoid insolvency as it compensates those affected by the Fukushima disaster, the Nikkei newspaper reported.

The aid will be the first disbursement from the Nuclear Damage Liability Facilitation Fund that was set up last month, the Nikkei said, without saying how it got the information. The utility known as Tepco is expected to avert falling into negative net worth with the support, the Nikkei said.

Tepco and the fund are drafting a plan for release next month that will include an estimate of damage payments and restructuring steps to be taken by the utility. The measures will pave the way for the government to beef up Tepco’s finances as the utility may have to pay 4.5 trillion yen in compensation by March 2013, according to an estimate by a government panel.

Tepco hasn’t decided how much aid the utility will seek from the compensation body, spokesman Masato Yamaguchi said by phone today. The company hasn’t set a date to announce the details of the plan, he said.

The utility hasn’t submitted a request for support, Soichi Yamamoto, an official at the Nuclear Damage Liability Facilitation Fund said today. He declined to comment on the Nikkei report.

Fleeing Radiation

Tokyo Electric’s Fukushima Dai-Ichi atomic plant has been leaking radiation since the March 11 earthquake and tsunami knocked out cooling systems causing three meltdowns. The reactor meltdowns forced 160,000 people to flee radiation and damaged fishing, farming and forestry businesses.

The government is trying to avert the bankruptcy of a company that supplies power to 29 million customers in the political and economic heart of Japan.

Tepco may face 8.6 trillion yen in funding shortages during the next decade if none of its nuclear power plants come back online and electricity prices aren’t increased, the government panel said earlier this month after reviewing the company’s finances.

The company aims to restart its Kashiwazaki Kariwa nuclear station by the end of March 2013 while delaying increasing electricity prices, the Yomiuri newspaper reported today, without citing anyone.

Of the seven reactors at Kashiwazaki Kariwa in Niigata prefecture, northwest of Tokyo, two are idled for regular maintenance and three have been shut since an earthquake in 2007. The other two reactors will be shut by the end of March for maintenance.

To contact the reporter on this story: Tsuyoshi Inajima in Tokyo at tinajima@bloomberg.net

To contact the editors responsible for this story: Amit Prakash at aprakash1@bloomberg.net; Peter Langan at plangan@bloomberg.net