May 9 (Bloomberg) -- Chubu Electric Power Co. agreed to the government’s call to close down its Hamaoka nuclear plant until it can be fortified to withstand a tsunami like the one two months ago that crippled another Japanese atomic station.
The company’s board agreed to the request from Prime Minister Naoto Kan, Chubu Electric President Akihisa Mizuno said at a press briefing at the company’s headquarters in Nagoya today. Kan asked the utility to shut the plant, which is located about 190 kilometers (118 miles) southwest of Tokyo, last week.
Chubu’s shares fell to an 11-year low today on the first day of trading since Kan’s announcement on May 6. Japan’s third-largest utility, which supplies power to factories run by Toyota Motor Corp. and other manufacturers, may report a loss in the 12 months to March, Mizuno said.
“The company is projected to have a net loss of about 100 billion yen ($1.2 billion) this fiscal year,” said Reiji Ogino, an analyst at Mitsubishi UFJ Morgan Stanley in Tokyo. “The timing of Prime Minister Kan’s decision raises questions. It seems that attention was paid only to the issue of the Hamaoka power plant and the decision doesn’t seem to have considered the energy situation of western Japan as a whole.”
The March 11 earthquake and tsunami that damaged Tokyo Electric Power Co.’s Fukushima Dai-Ichi plant, triggering the worst nuclear crisis in 25 years, raised concern that atomic stations in Japan aren’t adequately protected from natural disasters.
Hamaoka should be shut down until measures, including building a sea wall, are implemented, Kan said.
The government has no plans to ask other utilities to shut reactors, Deputy Chief Cabinet Secretary Yoshito Sengoku said yesterday.
Chubu Electric shares declined 10 percent to 1,584 yen on the Tokyo Stock Exchange, the lowest since April 2000, before the announcement. The benchmark Nikkei 225 Stock Average was down 0.7 percent.
The company serves central Japan, including Aichi prefecture where Toyota operates 12 car and component factories. Suppliers to Toyota, including Denso Corp. and Aisin Seiki Co. are also based in the prefecture.
Chubu Electric’s only nuclear station has five reactors, two of which are being decommissioned. The three remaining units have a combined output of 3,617 megawatts, or 11 percent of Chubu Electric’s generation capacity and started operations between 1987 and 2005.
“The reactors will be closed down within several days,” Mizuno said. “It will take two to three years to complete all the safety measures."
Chubu Electric, which planned to buy 8.42 million metric tons of LNG in the year ending March 2012, will need to secure a further 4 million tons for thermal power generation, Mizuno said.
Qatar, the world’s biggest exporter of liquefied natural gas, is considering selling Japan more of the fuel, Energy Minister Mohammed Bin Saleh al-Sada said yesterday.
An extra 1.3 million kiloliters of crude will also need to be purchased, Mizuno said.
The extra fuel purchases would cost about 250 billion yen if the company meets the capacity shortfall using only LNG-fired thermal turbines, Mizuno said.
The government will provide support to Chubu Electric if requested, Trade Minister Banri Kaieda said today.
The Hamaoka plant is located in Shizuoka, a prefecture with a population of 3.75 million, according to the local government’s website. The station lies adjacent to a fault line where the government expects a magnitude-8 earthquake to strike.
Chubu Electric in 2007 won a court ruling allowing it to continue operating Hamaoka after local residents filed a lawsuit to close the plant.
The Shizuoka District Court rejected claims the company underestimated the size of quakes that could hit the plant and the potential for serious damage to its reactors. The plaintiffs are taking the case to the Tokyo High Court, Spokesman Akio Miyazaki said.
Tokyo Electric’s Fukushima plant 220 kilometers north of Tokyo has been spewing radiation since the quake and tsunami knocked out power and cooling systems.
Tepco, as the company is called, has been using fire hoses, pumps and water cannons to douse reactors and spent-fuel pools in four of the plant’s six units. High radiation levels, debris and aftershocks prevented workers from entering reactor buildings till last week.
Workers entered the No. 1 reactor building for the second time today and checked radiation levels to assess whether they are low enough to allow engineers in to work on repairing the cooling systems.
Radiation levels of as high as 700 millisieverts per hour were detected in the No. 1 building, Junichi Matsumoto, a Tokyo Electric Power Co. official, said at a news conference today. The maximum exposure of those who entered the building was 10.56 millisieverts, he said.
The maximum exposure level allowed by the government for nuclear workers at the plant is 250 millisieverts a year.
A tropical storm that’s crossing the northern Philippines may head for Japan later this week, according to the U.S. Navy Joint Typhoon Warning Center.
Tropical Storm Aere is forecast to approach southern Japan by May 11 and pass Tokyo by May 13. Fukushima Dai-Ichi lies within the potential track the cyclone may take, according to the center’s forecast graphic.
‘‘It’s necessary to prepare for rain and heavy winds before the typhoon season arrives, but we haven’t been able to get around to preparing,” Hikaru Kuroda, a manager in Tepco’s nuclear facility department. “If a typhoon were to strike now, our activities would be affected.”
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