EDITORIAL: Compensation plan must not block reforms of electric power industry

The government's draft plan for the framework of compensation for damage arising from the accident at Fukushima No. 1 nuclear power plant has become clear.

Tokyo Electric Power Co., the operator of the plant, will be primarily responsible for compensation. Using an "organization" set up jointly by the government and the private sector, the government will put up public funds to cover the shortage and have TEPCO pay back the money from its annual earnings. During that time, TEPCO will be placed under government control.

There is no doubt the total amount of compensation will be enormous. It is a matter of course that preparations be made so that payment to sufferers will not be delayed based on the assumption that TEPCO alone would be unable to meet claims for damages.

There is also a need to come up with ideas not to roil the financial market where a huge amount of electric power company bonds are circulating.

As long as the government is going to inject public funds, TEPCO management must be strictly held accountable for allowing the situation to deteriorate to such an extent. Thorough corporate restructuring, including the treatment of employees and sale of assets, is unavoidable.

There are many other problems. Shouldn't shareholders be held accountable? Are banks that provide loans to TEPCO allowed to remain unscathed? The decommissioning of each reactor is estimated to cost more than 100 billion yen ($1.2 billion). Who is going to pay for it?

TEPCO is responsible for the payments. But under the existing system, the expenses will be added to electricity bills, ultimately forcing consumers to foot the bill. Perhaps it cannot be helped in a way, given that the crippled nuclear plant was generating electricity to meet the demands of the Tokyo metropolitan area. Still, the government should provide a proper explanation. If other electric power companies are asked to chip in, the burden could spread to users across the nation.

Most importantly, attention is needed so that the framework itself will not stand in the way of administrative reform of electric power supply in the future.

If an ordinary company caused such a serious accident, it deserves to go under. Despite such a disastrous situation, however, the government is set to support TEPCO because there is no other company that can supply electricity to the area served by TEPCO. The electric power industry has maintained regional monopolies on the back of strong political clout.

The proposed framework is based on the premise that TEPCO will continue to exist in order to minimize the government's burden. The government's responsibility for promoting nuclear power generation remains unclear from the draft. If the government is preoccupied with evading public criticism over the injection of public funds, it could fail to see the big challenges facing the nuclear power industry.

Is it appropriate to continue to let individual electric power companies be responsible for primary maintenance and management of nuclear power plants? Isn't the regional monopoly system interfering with the supply of electricity among utilities in emergencies? Who is going to undertake the development of new energy sources and how?

These are challenges that need to be re-examined in earnest from an angle different from dealing with nuclear accidents and liability. Addressing these challenges could drastically reshape the landscape of the electric power industry.

We hope to advance discussions while looking squarely at the true nature of problems created by the Fukushima nuclear accident.

--The Asahi Shimbun, April 22