Japan Utilities Eye Bailouts over Post-Fukushima Costs

Two major Japanese utilities are reportedly asking for a combined $1.5 billion in bailout funds, underscoring the strain on power companies' balance sheets after the Fukushima atomic crisis.

Kyushu Electric Power and Hokkaido Electric Power are in separate talks with the government-linked Development Bank of Japan as they struggle to contain mounting debt, the leading Nikkei business daily and other Japanese media reported this week.

Japan's stable of 48 operable nuclear reactors remain offline as a nuclear-wary public opposes government efforts to restart some plants, but a shift to pricey fossil-fuel imports to plug the gap has sent the country's energy bill soaring.

Relatively cheaper nuclear power once accounted for over a quarter of Japan's energy needs.

The reports said Kyushu Electric, in the western part of the country, was in talks with the bank for it to buy about 100 billion yen ($962 million) of the utility's preferred shares, while Hokkaido in the north of the country is asking for a similar investment worth about 50 billion yen, the Nikkei said.

Kyushu Electric confirmed it was in talks with the lender, while Hokkaido said it was looking into various fund-raising possibilities, including hiking customer rates. Neither supplied details.

The bank said "nothing has been decided" when asked about the negotiations.

Both power companies are expected to report their third straight annual loss since March 2011 when a quake-sparked tsunami slammed into the Fukushima nuclear plant, sending reactors into meltdown and setting off the worst atomic accident in a generation.

Fukushima-operator Tokyo Electric Power has received a multi-billion-dollar government bailout to keep it afloat as it faces mammoth cleanup and compensation costs tied to the accident.

Also Thursday, a small northern Japanese city slapped the builder of a nearby nuclear plant with a lawsuit aimed at stopping its construction.

Hakodate city in Hokkaido sued the national government and J-Power, an electricity wholesaler for the country's utilities, which has been building the plant about 23 kilometers (14 miles) away in neighboring Aomori prefecture.

The lawsuit claimed that the unfinished plant could pose a threat to city residents.

"Should a severe accident happen at Oma nuclear plant, Hakodate city's functions as a local authority will be lost dramatically, with the destruction of the city itself," said the claim filed Thursday in Tokyo District Court.

The plant, which has been under construction for six years, was to have come online later this year but that has been delayed amid uncertainty over the future of nuclear power in Japan.