It was as inevitable as cherry blossoms blooming in springtime: sooner or later, Japan had to nationalize the Tokyo Electric Power Company (TEPCO), the owner of the ruined Fukushima Daiichi nuclear plant. Today the government announced a ¥1 trillion (US$12.5 billion) plan to bail out the country’s largest utility, and at least temporarily take control.
The need for the takeover stems directly from last March’s meltdowns. In the immediate aftermath of a massive earthquake and tsunami, TEPCO unexpectedly found itself struggling to contain three reactors on the site. The company could not stop the meltdowns and has spent months bringing the reactors under control. In the past year, it has made progress, creating a system to recycle radioactive cooling water from the core, but the long-term clean up will take decades (see the video below for more).
Most observers recognized early on that TEPCO could not shoulder the financial burden of clean-up, and it was only a matter of time before the Japanese government stepped in. The government had already helped the utility to the tune of at least ¥2.5 trillion, according to Reuters.
The latest aid comes with strings attached. Under the terms of the deal, the government will hold more than half of TEPCO’s voting shares. It will also control a significant amount of stock in the company. According to the Mainichi, the utility will be tasked with clean-up, reparations to evacuees forced to leave their homes, and providing a stable supply of electricity to the Tokyo region. The government is also expected to call for further openness at the firm, which had a spotty safety record even before the Fukushima accident.
Given the degree to which the Japanese government must necessarily be involved in clean up operations, the takeover of TEPCO is probably a good move. But it is also a reminder that when nuclear plants go wrong, it is governments that must foot the bill.