JAPAN ENERGY

HEAD: Reports: Japan's TEPCO to Receive Massive State Bailout

DATE: 01/26/12

PUBLISHED: Thursday, January 26, 2012 3:58:02 AM

NUMBER: 1930537

AUDIO:

VIDEO:

WEB:

TYPE: CN ))

News reports say the Japanese government is prepared to bailout the owner of the crippled Fukushima nuclear plant for $13 billion.

Officials with the Tokyo Electric Power Company are negotiating with the government-backed Nuclear Damage Liability Facilitation Fund over the fund's demand to purchase a two-thirds share in the company, a move that would effectively nationalize the privately-run utility.

The share price of TEPCO plunged after an earthquake and tsunami last March triggered a meltdown of the nuclear reactors at its Fukushima-Daiichi powerplant. The meltdown was the world's worst nuclear crisis since the 1986 Chernobyl disaster. The energy company is facing billions of dollars in compensation claims and other costs.

Sources say the government expects to retain control of TEPCO for as long as 10 years.

Japan's Nikkei business daily says TEPCO envisions returning to profitability by 2014, based on the assumption it will increase household electricity rates by 10 percent in October, and restart reactors at its Kashiwazaki-Kariwa nuclear plant in March 2013.