Nuclear taxes get new lease on life after Fukushima — Nikkei Asian Review

” OSAKA — Japanese prefectures with nuclear power plants are moving to ensure that utilities continue to shoulder a tax burden on reactors even as they are being decommissioned, dramatically raising the cost of cleanup efforts that can last 30 to 40 years.

Five nuclear reactors have been approved for decommissioning since the 2011 meltdowns at Tokyo Electric Power Co. Holdings’ Fukushima Daiichi plant. In each case, the host prefectural government has received approval from the ministry of internal affairs to apply a nuclear tax during decommissioning.

Ehime Prefecture in western Japan, home to Shikoku Electric Power’s Ikata nuclear power plant, has decided to change its ordinances by the fall to enable it to collect taxes on the plant’s No. 1 reactor. Shikoku Electric decided last May to decommission the reactor and has applied to the Nuclear Regulation Authority for approval.

The continued stream of tax revenue will help the Ehime government maintain evacuation routes and other facilities and safety measures until the reactor is fully dismantled and nuclear contamination risks eliminated.

Revenue generator

Of the 13 prefectures that host reactors, only Fukushima does not levy a nuclear fuel tax. Prior to the disaster, most prefectures did not collect these taxes during periods when reactors were shut down for periodic inspections or other reasons. The handful of reactors marked for decommissioning before the disaster have not had their taxes extended.

However, prolonged nuclear power plant shutdowns since Fukushima have prompted local governments to tax reactors based on output capacity even when they are idle to try to wring revenue out of idle units. The moves to extend taxes into decommissioning mark a further step.

Ehime Prefecture’s nuclear fuel tax generated 1.46 billion yen ($13.1 million) in revenues to the government in fiscal 2016, 264 million yen of which came from the inactive No. 1 unit at the Ikata power plant. The government seeks to collect at least half of the full amount during decommissioning.

Fukui Prefecture, home to three reactors approved for decommissioning, expects to collect an annual 370 million yen in revenues from its revised nuclear tax, which comes to half of the standard level.

With the country’s nuclear regulator imposing an in-principle 40-year operating limit on reactors, decommissionings are expected to continue at a pace of one to two units a year. The costs of taking a reactor out of service and rendering the site safe are generally estimated at tens of billions of yen. The tax burden could add up to billions of yen per reactor over the course of decommissioning.

“While the taxes may have benefits for communities, if electric rates go up as utilities’ costs rise, residents will also feel the burden,” said Tatsujiro Suzuki, an authority on nuclear energy policy at Nagasaki University. ”

by Nikkei Asian Review

source

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