Govt buyout of TEPCO pitched / Public-funded takeover could help utility survive huge damages bill

The Yomiuri Shimbun

The government might place Tokyo Electric Power Co. under effective state control to help the utility survive if it has to pay massive amounts of compensation to businesses and individuals affected by its crippled Fukushima No. 1 nuclear power plant, according to government sources.

A plan proposed by some members of the government would involve the government and other state entities acquiring a majority stake in TEPCO to help the beleaguered firm pay the damages, the sources said.

One government source said the plan was proposed to secure electric power supply for areas served by TEPCO "by temporarily nationalizing [TEPCO] first, and then rehabilitating it and raising capital so it can be privatized."

The government intends, in principle, to order TEPCO to pay for all damages to companies forced to suspend operations and farmers whose produce has been affected by the accidents at the plant triggered by the March 11 earthquake and tsunami. Estimates put such damages at several trillion yen.

The plan calls for the purchase of TEPCO shares to be financed with taxpayer money, meaning even people who live outside areas covered by TEPCO's operations will shoulder the financial burden.

Some members of the government have therefore argued a utility-rate hike, streamlining of TEPCO's operations and other efforts to improve the firm's profitability should take precedence over the nationalization plan.