December 26, 2014

EDITORIAL: For a viable future, KEPCO must part with nuclear energy

http://ajw.asahi.com/article/views/editorial/AJ201412260035

Kansai Electric Power Co. on Dec. 24 applied to the industry ministry for permission to raise electricity rates again in April, citing unexpectedly higher fuel costs of thermal power generation.

The electric utility last raised its power charges in May 2013. This time, it plans to raise rates for households by 10 percent and charges for corporate customers by more than 13 percent.

Kansai Electric Power, or KEPCO as it is more commonly known, has expanded its output capacity by burning fossil fuels to compensate for the loss of nuclear power generation following the triple meltdown at the Fukushima No. 1 nuclear power plant in 2011.

Small and midsized companies in the region served by the utility have been screaming that they can’t make any more cuts in their power consumption.

Exhaustive efforts for higher operational efficiency on the part of KEPCO are a basic premise for any rate hike.

The utility claims it has been striving to bolster cost efficiency in every aspect of its operations. But critics say KEPCO has fallen short in a number of areas, especially in regard to labor costs.

The government should evaluate rigorously the company’s cost-cutting efforts before approving its rate hikes.

The primary factor behind the company’s losses is the shutdown of the reactors at its nuclear power plants. Before the catastrophic accident in Fukushima Prefecture, KEPCO depended on nuclear power for about half of the electricity it generated.

When it raised power rates last year, the company was expecting that some of the reactors would be restarted before long. But that has not happened, forcing the company to apply for additional rate hikes.

Still, Makoto Yagi, the president of the power supplier, has repeatedly stated that he intends to seek to restart offline reactors as soon as possible. In our view, he is way too optimistic about the prospects for idled reactors.

The nuclear disaster raised serious doubts in the public's mind about the safety of nuclear power generation. Although it is spending heavily to ensure the safety of its nuclear facilities, KEPCO still faces a formidable challenge in trying to win approval from the Nuclear Regulation Authority and public support for bringing its reactors back online.

Nine of the 11 nuclear reactors operated by the utility will have been in service for more than three decades by the end of next year.

Replacing these aged reactors with new ones or building new reactors will be an enormous challenge.

The company’s future will remain bleak as long as it continues to rely heavily on atomic energy for power generation.

Higher electricity bills will prompt businesses and local governments in the Kansai region to purchase power from other suppliers. Already, more than 10,000 workplaces have switched to new power suppliers offering lower rates.

Power consumption by households has been trending down as a result of efforts to save on energy use.

The planned liberalization of the power retail market in 2016 could accelerate the defection of households from KEPCO.

The utility is at a crossroads. It should map out a long-term strategy for crafting for itself a future without having to reply on nuclear energy.

That would be the best way to win support from its consumers for the rate increases.

Since the 1970s, the Kansai region around Osaka has been heavily dependent on electricity generated at regional nuclear power plants, many of which are located in Fukui Prefecture.

But the Fukushima nuclear disaster has raised serious questions about the way cities in the region have been consuming power generated at nuclear plants located far away.

Certain increases in electricity bills will be inevitable in the process of shifting away from nuclear energy to other power sources.

KEPCO’s additional rate hikes should serve at least as an opportunity for the region to ponder the region's energy future.

The Union of Kansai Governments, composed of the governments of seven prefectures and four designated cities in the region, adopted a target earlier this year of tripling the amount of power generated with renewable energy sources by fiscal 2020.

But no workable plan to lower the region’s dependence on atomic energy has been offered.

There will be no progress toward a future with less nuclear power generation as long as the region continues to count on the central government to lead the way.

The Kansai region should take the initiative in working with KEPCO and Fukui Prefecture to develop a viable vision for its energy future.

--The Asahi Shimbun, Dec. 26