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2.4 trillion yen in Fukushima crisis compensation costs to be tacked onto power bills

The Economy, Trade and Industry Ministry plans to require power companies including new market entrants to tack approximately 2.4 trillion yen in compensation costs for those affected by the Fukushima nuclear crisis onto power bills.

The plan would result in an 18-yen average increase in monthly household electricity bills, ministry officials said. This policy is part of a draft proposal that the ministry unveiled at a Dec. 9 expert panel meeting to discuss how to share the ongoing cost of the Fukushima No. 1 nuclear plant disaster that broke out in March 2011.

At the meeting, the ministry also revealed that the estimated cost of dealing with the disaster has hit 21.5 trillion yen -- nearly double the initial projection of 11 trillion yen.

Total compensation for people affected by the disaster is estimated to rise from 5.4 trillion yen to 7.9 trillion yen, and decontamination-associated costs are likely to grow from 2.5 trillion yen to 4 trillion yen. The bill for building interim storage facilities for radioactive materials is expected to rise from 1.1 trillion yen to 1.6 trillion yen, while that of decommissioning reactors at the crippled plant will likely surge from 2 trillion yen to 8 trillion yen.

The draft proposal points out that nuclear power plant operators' financial reserves to deal with potential nuclear accidents are 2.4 trillion yen short -- almost equal to the projected increase in Fukushima disaster compensation costs.

The draft proposal urges not only major utilities including Tokyo Electric Power Co. (TEPCO), operator of the Fukushima power station, but also new market entrants to shoulder the cost. Over a 40-year period from 2020, new companies would be required to add part of their share of compensation payments to "wheeling charges" that they pay to use the transmission lines of major utilities. All these costs would be passed onto the consumer.

An increase in the cost of decontamination would be covered by proceeds from the sale of TEPCO shares held by the government, and an increase in interim storage facility costs would be financed with additional taxpayers' money, while that in decommissioning costs would be shouldered by TEPCO.

The draft proposal would also require new power companies to foot part of the cost of decommissioning nuclear plants if major utilities decide to scrap the power stations earlier than initially planned.

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