Two Japanese regional power companies have secured capital support totalling ¥150 billion ($1.46 billion) from the state-owned Development Bank of Japan (DBJ). The move comes as they announced losses for the third consecutive year, while all of Japan's nuclear power reactors remain offline awaiting.
Kyushu Electric Power Company and Hokkaido Electric Power Company will take preferred stock investments from the DBJ of ¥100 billion ($975 million) and ¥50 billion ($487 million) respectively.
Shareholders of both utilities must approve the DJB investments at their respective general meetings on 26 June. The payment for the preferred stock will then be made to Hokkaido on 31 July, while that to Kyushu would be made on the following day.
Both companies have announced losses for the financial year ending March 2014. Kyushu said that it made a net loss of ¥96 billion ($937 million), while Hokkaido reported a loss of ¥63 billion ($615 million). Kansai Electric Power Company has also announced a loss of ¥97.4 billion ($952 million) for the past year. The announcements mark the third consecutive year of losses for all three companies. Japan's other regional power companies have also reported losses over this period.
Hokkaido said that with the continued shut down of its Tomari nuclear power plant, its net assets have decreased in value from ¥3.66 trillion in March 2010 to ¥92.9 billion and its equity ratio now stands at 5.4%. The company said that it would use the funds raised through the preferred stock issuance "for capital investment necessary for the continued stable supply of power."
Also citing the continued shut down of its Genkai and Sendai nuclear power plants, Kyushu said that the situation makes improving the company's capital "appropriate and necessary." It too said that it would use the funds to make necessary investments for the stable supply of electricity, including safety improvement measures at its reactors.
Rising fuel costs as reactors remain idle
All of Japan's 48 operational nuclear reactors are currently off line pending clearance from the Nuclear Regulation Authority (NRA) under new regulations that came into force last July. To date, restart applications have been lodged for 17 of those reactors. The first reactors could restart later this year after completion of the NRA's review process.
Japan has seen its fossil fuel imports and greenhouse gas emissions increase since its reactors were idled after the Fukushima accident in March 2011. The Japan Atomic Industrial Forum has estimated that increased fuel imports are costing some ¥4 trillion ($40 billion) per year. Imports of LNG and thermal coal totalled about ¥8.2 trillion ($80 billion) in 2013.
Most of Japan's nine regional power companies have made price increases over the past two years to help meet the cost of importing more fossil fuels while their reactors remain offline.
Researched and written
by World Nuclear News