Japan opposition sets conditions for energy bill

TOKYO (Reuters) - Japan's main opposition party will support a bill promoting renewable energy on the condition that the government will clarify its impact on electricity costs, a Liberal Democratic Party (LDP) lawmaker in charge of energy policy said on Tuesday.

Prime Minister Naoto Kan, under fire over his response to the March 11 earthquake and subsequent nuclear crisis, has said he would resign but would stay in his post until the renewable energy law and two other bills are passed.

"We're prepared for a debate to make certain amendments on the bill, so that we can pass it as early as possible," Yasutoshi Nishimura, LDP's shadow energy and trade minister told Reuters in an interview.

"Unless the government answers the question how much companies' and households' electricity bills will rise in the immediate future, I don't think we can make a meaningful debate on the bill."

Nishimura also said that the LDP, which had for decades promoted nuclear power as safe and stable source of energy to keep Japanese industry competitive, was reviewing its energy policy after the March 11 earthquake and tsunami crippled the Fukushima power plant, triggering the world's worst nuclear crisis since Chernobyl.

"Our party does not feel our past nuclear policy was wrong as it allowed the industry access to affordable electricity that enabled the economy to grow," he said.

"But we were not expecting such a disaster and feel strongly responsible for not anticipating such an event to happen."

He said the party's special committee on post-Fukushima energy policy met for the first time on Tuesday and aimed to draft an energy mix what would be economically feasible for Japan by 2020, 2030 and 2050.

He said the LDP shared with Kan's Democrats the vision of a greater role of renewable energy and limited scope for nuclear power.

The law would oblige power utilities to buy any electricity generated from renewable sources such as wind, solar, biomass, geothermal or small-scale hydro at preset rates. Nishimura said the government has underestimated how much household electricity bills would rise as a result of the new law.

"We are more realistic than the ruling party," Nishimura said.

He said compensation due to be paid to victims of the nuclear crisis as well as higher costs of fossil fuels that will have to be imported to make up for the loss of nuclear power would also push up electricity tariffs. That would require making special provisions for energy-intensive industries such as electric furnace steel companies.

Asked about the prospects of ending a political gridlock in parliament where Kan's Democrats control the lower house, but LDP and other opposition parties have a majority in the upper house, Nishimura said the passage of the energy bill would pave the way for a new political chapter by August.

He said LDP could cooperate on two other bills -- one implementing a second 2 trillion yen emergency budget and one authorizing the government to issue bonds to cover this year's budget deficit -- if the ruling party modified its spending plans, such as child support payouts.

"(LDP leader Sadakazu) Tanigaki is already saying he is willing to cooperate on the second extra budget. As for the bond issuance bill the key issue is child allowance." "There is ample room for agreement depending on how much the DPJ can reduce it and this could open the door for cooperation over the three conditions," Nishimura said.

(Editing by Tomasz Janowski)