Japan Power Utilities Fall on Report of New Costly Safety Rules
Hokkaido Electric Power Co. (9509) led declines among Japan’s utilities after the Nikkei newspaper reported that new safety requirements for atomic plants will cost the power companies tens of billions of yen.
Hokkaido Electric fell as much as 6.8 percent to 1,001 yen on the Tokyo Stock Exchange, before trading 1.5 percent lower at 1,058 yen as of the 11:30 a.m. midday break. The 17 member TOPIX Electric Power & Gas Index slipped 0.5 percent while the benchmark Nikkei 225 Stock Average rose 0.5 percent.
All but two of Japan’s 50 nuclear reactors are offline as utilities await instructions on safety standards to be drawn up by the Nuclear Regulation Authority in July after the 2011 Fukushima disaster shattered public confidence in atomic energy. The watchdog will require atomic plants to have backup emergency cooling and a filtered-vent system to remove radioactive substances in an event of an accident, Nikkei reported today, citing an NRA draft report.
“The point is whether these planned requirements will be a condition for restarting idled reactors. If not, some reactors may be allowed to resume operations soon” after the NRA draws up new standards, Hidetoshi Shioda, a Tokyo-based analyst at SMBC Nikko Securities Inc., said by phone.
The NRA will consider allowing utilities to resume reactors if utilities commit to making the changes to meet new standards within three years, the Nikkei said, without citing anyone. The plant operators may have to spend tens of billions of yen per reactor to meet the new rules, the Nikkei said.
When the previous government allowed the restart of two reactors operated by Kansai Electric Power Co. in July last year, tens of thousands of people took to the streets in Tokyo in weekly protests. Newspaper opinion polls and town hall meetings drawing in citizens across Japan also showed majorities in opposition to nuclear power post-Fukushima.
Allowing utilities to restart idled reactors will likely draw thousands of protesters back onto the streets again, Tomoko Murakami, a Tokyo-based nuclear analyst at the Institute of Energy Economics, Japan, said in a phone interview.
“There are many people who oppose restarts, but in reality not many influential people have come out in support,” she said.
Those wanting to revive Japan’s economy want early restarts of idled reactors and the Abe government is in that camp as he has pledged economy recovery, Murakami said.
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