| TOKYO, April 30
TOKYO, April 30 Japan's biggest regional
electricity monopolies posted combined losses of $16 billion for
a second year and face more red ink as restarts of their nuclear
reactors fall behind schedule and a weaker yen raises costs to
import fossil fuels for power generation.
The losses mean that Japan's once mighty power companies may
have to embark on politically difficult moves like seeking
bigger consumer rate increases or approach the government for
other forms of assistance.
It will also mean that they will be required to boost
imports of fossil fuels to make up for the shortfall from
reactors that have been idled by the Fukushima nuclear disaster
two years ago.
Some of the companies have already responded with price
increases for customers, which go into effect on Wednesday,
after the government approved them. It has warned the operators
to keep cutting costs.
Prime Minister Shinzo Abe's government is wary of a voter
backlash against higher prices from an industry that even before
Fukushima charged some of the highest rates in the world.
"The plain and simple fact is that they either have to
restart nuclear or raise rates, or some combination of both
which is what is happening," said Penn Bowers, an analyst who
covers the utilities at CLSA Asia-Pacific Markets in Tokyo.
"The amount of nuclear utilization presumed by the companies
appears to be reasonable although somewhat optimistic in terms
of timing," he said, adding it is possible some of them might
return to quarterly profits later in the business year.
Combined losses among the country's listed nuclear operators
for the year to March 31 totalled almost 1.6 trillion yen
($16.30 billion), about the same as the previous year.
Tokyo Electric Power Co, the operator of the
wrecked Fukushima nuclear plant, said when it was given approval
to raise prices last year it would have one of its reactors at
Kashiwazaki Kariwa station running by the end of this month.
But the country's new nuclear regulator, set up with more
independence after the Fukushima catastrophe exposed lax
oversight of the industry, won't finalize new safety standards
till July. Operators also face costly upgrades to meet the
Tokyo Electric reported on Tuesday an annual loss of 685.29
billion yen, the last of the utilities to report earnings.
Kansai Electric Power Co, Japan's second-biggest
regional monopoly, Kyushu Electric Power Co and Shikoku
Electric Power Co said in their applications to raise
rates they expect to get five reactors running by July.
Kansai Electric and Kyushu Electric, which on Tuesday
reported combined losses of 576 billion yen in the year through
March 31, will increases prices for residential customers from
Kansai Electric officials would only say they hope to get at
least one reactor operating by the end of September, when asked
about restarts at the company's earnings briefing.
Only two of Japan's 50 reactors are running and the decision
by the previous government to start them up last year was met
with the biggest protests in decades and contributed to its
defeat in polls in December.
The two reactors operated by Kansai Electric will go offline
for refueling in September and have been given an exception by
Without reactors running, the utilities have been forced to
aggressively turn to fossil fuels instead, especially costly
liquefied natural gas (LNG).
The fall in the value of the yen means they face a fuel
import bill of 3.8 trillion yen this business year, double the
year before the Fukushima disaster, according to a recent
The yen is down about 12 percent this year.
In the year ended in March, Japan imported a record 87
million tonnes of LNG and 106 million tonnes of thermal coal,
also a record.
Only two of the nine listed utilities eked out an annual
profit in the last two business years and all but one of them
has now withheld official earnings forecasts, citing a lack of
certainty over reactor restarts.
Hokuriku Electric Power Co, the country's least
nuclear-reliant utility, posted a profit of 98 million yen in
the year through March. Chugoku Electric Power Co, the
sixth-biggest, had a loss of 21.95 billion yen, compared with a
profit of 2.5 billion yen a year earlier.
($1 = 98.1500 Japanese yen)
(Additional reporting by Risa Maeda; Editing by Muralikumar