Tokyo Electric to Complete Repair of Reactor Tomorrow

By Megumi Yamanaka

Feb. 3 (Bloomberg) -- Tokyo Electric Power Co., forced by an earthquake to shut the world’s biggest nuclear plant, will complete repairs of a reactor at the Kashiwazaki Kariwa nuclear plant tomorrow, paving the way for a restart.

Kashiwazaki city, in the northern prefecture of Niigata, today lifted a ban on operating the No. 7 reactor, spokesman Manabu Takeyama said by phone today. The utility needs approvals from the trade ministry’s Nuclear and Industrial Safety Agency and local municipalities before conducting a test run.

The reactor is the first of seven to be repaired after the plant was shut July 16, 2007, when a magnitude 6.8 temblor caused a fire and radiation leaks. The company posted its first loss in 28 years in fiscal 2007 because of mounting costs for thermal generation.

“It’s definitely a step forward,” Hirofumi Kawachi, an energy analyst at Mizuho Investors Securities Co., said by phone from Tokyo. “We can expect a V-shaped recovery in the next business year as Tokyo Electric enjoys the double impact of drops in oil prices and reductions in fuel needs.”

A trial run of the reactor will take at least 3 weeks, the company said in December. Tokyo Electric needs to get permission from central and local governments before a full restart.

The company has more than doubled consumption of fossil fuels, especially heavy fuel and crude oil, to make up for declining output caused by the closure of the Kashiwazaki Kariwa nuclear plant, which accounts for about 10 percent of its total generation capacity. The mounting fuel costs prompted the company to forecast a second consecutive loss this fiscal year.

Narrower Loss

Tokyo Electric on Jan. 30 narrowed its forecast net loss to 45 billion yen for the year ending March 31 from 220 billion yen because of lower oil prices. Crude has declined 72 percent since touching a record $147.27 a barrel on the New York Mercantile Exchange in July. It traded at $40.45 a barrel at 1:31 p.m. in Tokyo.

The company may earn 250 billion yen in the fiscal year starting in April, according to a Bloomberg survey of five analysts. All of the analysts predicted at least some output would resume at the nuclear plant.

“Now what investors are watching is how many reactors it can restart in the next fiscal year and how much its nuclear operation rate will increase,” Kawachi said.

To contact the reporters on this story: Megumi Yamanaka in Tokyo at myamanaka@bloomberg.net;