The largest nuclear plant in Japan will not restart this year as planned, a delay that hurts operator Tokyo Electric Power Co.’s plans to turn around its finances.
TEPCO (TYO:9501) has drained its finances trying to contain radiation pollution after an earthquake and tsunami damaged its Fukushima Daiichi nuclear power plant in 2011. Starting the Kashiwazaki Kariwa facility, 180 miles northwest of Tokyo, is a key part of its plan to generate cash.
The company had expected to restart two reactors at Kashiwazaki in July, though critics have said the goal was unrealistic. Four sources with direct knowledge of the situation told Reuters the restart would be postponed. One source said the restart could be delayed by a year.
"It will take some time for Kashiwazaki; it will be impossible to restart it this fiscal year," the source told Reuters. Japan's business year started in April. TEPCO’s vice president Hiroshi Yamaguchi told shareholders in June that the company couldn’t comment on the timing of the Kashiwazaki restart.
TEPCO told lenders last year that it would increase electricity rates or restart reactors to shore up its finances, but two of Reuters’ sources also said the Japanese government has told TEPCO to avoid hiking utility rates. In January, TEPCO announced its turnaround plan, warning it may have to hike electricity rates as early as the fall if it cannot reopen Kashiwazaki.
The company reported more than $27 billion in losses for the three years following the Fukushima disaster, but made a profit last year after cost cuts and government aid. TEPCO says it would save $1 billion per month in fuel costs by operating the seven reactors at Kashiwazaki.