World's Biggest Nuclear Plant Is Center Stage in Rural Election

(Bloomberg) -- The fate of the world’s largest atomic plant may be decided by a local election this weekend in a rural Japanese prefecture better known for its skiing and sake.

The top two candidates running in the June 10 Niigata gubernatorial race are opposed to the speedy restart of Tokyo Electric Power Co. Holding Inc.’s Kashiwazaki-Kariwa nuclear reactors -- which the utility, known as Tepco, aims to fire-up as soon as 2019. But the degree to which the candidates oppose atomic power is being watched closely by investors, voters and local media.

“Utility share prices have been very sensitive to nuclear restarts because of the potential to lower power production costs,” said Joseph Jacobelli, an analyst at Bloomberg Intelligence. “The cost per kilowatt hour is lower than oil and gas.”

Tepco shares, which surged after the previous governor who opposed quick nuclear restarts stepped down, underscore the importance of cheap atomic power for utilities dependent on fossil fuels since the 2011 Fukushima disaster. While candidates backed by Prime Minister Shinzo Abe’s Liberal Democratic Party and the opposition both want to finish investigations into atomic safety before the Kashiwazaki-Kariwa reactors restart, their views diverge after that.

Chikako Ikeda, a member of the prefecture’s assembly and backed by a coalition of opposition parties, has said she doesn’t support Tepco restarting the facility. She is also calling for a local referendum to decide the fate of the units after the prefecture finishes its investigations, which could take another three years.

Hideyo Hanazumi, a former vice-governor of Niigata backed by Abe’s LDP party, has refused to say whether he supports the restart but has insisted that the prefecture’s investigations be completed before a decision is made. Tepco shares have lost almost 14 percent since the day before May 9 when he said the nation should rid itself of nuclear power in the long-term and continue the prefecture’s investigation.

Hanazumi has a slight lead over Ikeda, according to the Asahi poll, which didn’t disclose exact percentages.

Japan’s nuclear regulator said last year Kashiwazaki-Kariwa No. 6 and 7 nuclear reactors met post-Fukushima safety standards, clearing the way for their restart. Restarting one unit would boost Tokyo Electric’s profit by roughly 90 billion yen ($818 million) a year. Utilities typically seek governor approval before resuming nuclear operations.

©2018 Bloomberg L.P.

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