UPDATE 2-Fukushima operator Tepco posts $3.69 bln Q1 loss as crisis drags on

Wed Aug 1, 2012 6:24am EDT

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* Eight Japan nuclear utilities post combined $7.12 bln Q1 losses

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* Tepco forecasts 160 bln yen net loss for year to March 2013

* Tokyo prosecutors probe Tepco, govt officials -report (Adds report that prosecutors begin criminal probe)

By Osamu Tsukimori

TOKYO, Aug 1 (Reuters) - Fukushima plant operator Tokyo Electric Power Co posted a quarterly net loss of $3.69 billion, boosting total losses by eight of Japan's nine listed atomic plant operators to $7.12 billion as they struggle with higher fossil fuel bills to fill a gap left by idled reactors.

With a growing anti-nuclear movement clouding the outlook for future reactor restarts after two of the country's 50 units went back on line last month, the regional electricity monopolies' woes look likely to persist.

Kansai Electric Power resumed operations at two reactors at its Ohi nuclear plant in western Japan to avert potential blackouts this summer, the first to restart since last year's Fukushima nuclear disaster, which by early this May had left all of the country's 50 units offline for safety checks.

Without reactors running, the utilities have been forced to aggressively turn to fossil fuels instead, especially costly gas and oil, and could follow Tepco -- which has effectively been nationalised -- in raising electricity rates. But analysts say they are unlikely to need a government bailout.

"If (utilities) are unable to restart reactors or raise electricity prices, other measures will need to be taken, but it's too early to think the government may need to step in to help," said Hidetoshi Shioda, an analyst at SMBC Nikko Securities.

Any decision to bring online more reactors will be in the hands of a new atomic regulator to be launched in September, but uncertainties remain since the restarts have energised anti-nuclear feeling, with large protests taking place weekly outside Prime Minister Yoshihiko Noda's official residence.

Tokyo Electric (Tepco), Japan's biggest utility, said on Wednesday that its group net loss in the three months ended June 30 was 288.39 billion yen ($3.69 billion), down from a 571.8 billion yen loss a year earlier.

Tepco forecast a net loss of 160 billion yen for the year ending next March, which is worse than the consensus estimate of a 95.33 billion-yen loss in a survey of four analysts by Thomson Reuters I/B/E/S.

STAGGERING COSTS

The owner of the Fukushima Daiichi nuclear plant, which spewed radiation after it was crippled by a huge earthquake and tsunami on March 11, 2011, was nationalised on Tuesday.

The government officially took a 50.11 percent stake in exchange for a 1 trillion-yen capital injection to help it cope with the staggering compensation and clean-up costs of the disaster.

The injection brought total government support for the company to more than 3 trillion yen, but the eventual cost of the nuclear disaster, including clean-up and decommissioning costs, has been estimated at more than $100 billion.

Adding to Tepco's woes, Tokyo prosecutors have opened a probe after accepting criminal complaints against its executives and government officials, the first investigation of its kind, Jiji news agency reported on Wednesday. Prosecutors declined To comment.

Tepco President Naomi Hirose said at the company's earnings news conference he could not immediately comment on the Jiji report.

A panel of experts appointed by parliament concluded last month that the Fukushima nuclear disaster could have been prevented and that the failure to take enough precautions was the result of "collusion" among the utility, regulators and government officials.

Tepco, which supplies power to almost 45 million people in and around Tokyo, aims to return to profitability in the 2013/14 business year, but to do so, it must gradually restart reactors at its Kashiwazaki-Kariwa nuclear plant in northern Japan starting from April 2013.

It remains unclear, however, if the reactors can resume operations as scheduled, since the firm needs to have local governments' backing before operations can resume.

In the year ended in March, Japanese utilities used a record 52.89 million tonnes equivalent of liquefied natural gas (LNG), topping the previous record by more than 10 million tonnes, while their oil consumption more than doubled from the same period a year earlier.

The utilities are shouldering a high cost for keeping their nuclear plants out of operation. Kansai Electric said on Monday it expects to cut its fossil fuel consumption by 2.3 million tonnes of LNG equivalent in the 2012/13 fiscal year after restarting two nuclear reactors.

Among the nine listed Japanese utilities that operate nuclear plants, only Hokuriku Electric Power posted a profit in the first quarter, of 8.9 billion yen. ($1 = 78.1000 Japanese yen) (Additional reporting by James Topham, Linda Sieg and Aaron Sheldrick; Editing by Ryan Woo and Edmund Klamann)

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