(Updates with Edano apology in 10th paragraph.)
Sept. 14 (Bloomberg) -- Yukio Edano, Japan’s new trade minister, may take a tougher stance than his predecessors toward power monopolies including Tokyo Electric Power Co., as the government deals with the Fukushima crisis, analysts said.
Edano set the tone for the ministry that oversees Japan’s atomic power industry by repeating remarks he made earlier this year that Tokyo Electric creditors and shareholders should help pay for the costs associated with the Fukushima nuclear disaster, such as compensation claims.
“He may take a harder line with the utilities, banks and shareholders than his predecessors,” said Hirofumi Kawachi, an energy analyst at Mizuho Investors Securities Co. in Tokyo.
Japanese bank shares tumbled in May when Edano was government chief of staff and said that creditors may have to write off some loans made before the March 11 earthquake and tsunami damaged the Fukushima Dai-Ichi plant. The government later set up an organization to support Tepco with 2 trillion yen ($25 billion) of funding.
“The purpose of using tax money to aid Tokyo Electric doesn’t include the protection of creditors and shareholders,” Edano told reporters in Tokyo yesterday. “They should bear costs they would have been liable for if there wasn’t support from the government.”
Edano, 47, was speaking a day after he was appointed to head the Ministry of Economy, Trade and Industry in the new government of Yoshihiko Noda, 54. He replaced Yoshio Hachiro, 63, who resigned just over a week into the job after making inappropriate comments about the Fukushima crisis.
Noda took over from Naoto Kan, 64, two weeks ago to become the country’s third prime minister since the Democratic Party of Japan gained power in 2009. Banri Kaieda, 62, was METI minister between January and August this year.
As chief cabinet secretary in the last government Edano led daily briefings on the earthquake, tsunami and nuclear crisis, the world’s worst since Chernobyl 25 years ago.
The earthquake and tsunami caused the meltdown of three reactors at the Fukushima plant, leading to radiation leakage and the evacuation of almost 160,000 people. Almost 20,000 people are dead or missing after the tsunami.
Edano yesterday apologized to Fukushima prefecture’s governor, Yuhei Sato, for comments made by Hachiro about “towns of death” around the shattered nuclear plant, the Asahi newspaper reported today.
As well as being a key figure in the government’s response to the crisis, Edano will oversee reforms at METI after Kaieda sacked the ministry’s top three energy officials.
The ministry has been criticized for being too close to the nuclear operators in its conflicting role as promoter and regulator of atomic power.
The regulator, the Nuclear and Industrial Safety Agency, will be separated from METI and placed under the Ministry of the Environment, the government said earlier.
The government will also aim to reduce dependence on nuclear power “as much as possible,” Noda said yesterday in his first policy speech since taking office. He reiterated his predecessor’s plan to “revise from scratch” Japan’s Basic Energy Policy and said the government will present a new plan by the middle of next year.
At the briefing yesterday, Edano took aim at cost cutting at Tokyo Electric, also known as Tepco, and other utilities.
“Tepco’s efforts to cut costs probably haven’t been sufficient,” Edano said, adding the same holds for other power companies. They may be asked to reduce costs by the ministry, which has final say over electricity tariffs, Edano said.
Tepco overestimated costs used to calculate electricity prices for its customers for as many as 10 years, Kazuhiko Shimokobe, the chairman of a government committee investigating the utility’s finances, said last week. Shimokobe declined to comment on whether the finding by the committee meant Tepco was overcharging its customers.
Japan’s lower house in July passed a bill allowing for state support to help Tepco compensate those affected by the nuclear disaster. The government named Takehiko Sugiyama, the former president of Hitotsubashi University, to head the body.
“It’s natural for the government to ask banks and shareholders to share the burden,” said Tatsuo Hatta, a professor emeritus of economics at Osaka University. “If they can evade their responsibilities, it raises the risk of moral hazard, which may have a wider impact on the financial industry.”
--Editors: Aaron Sheldrick, Peter Langan
To contact the reporter on this story: Tsuyoshi Inajima in Tokyo at firstname.lastname@example.org
To contact the editor responsible for this story: Teo Chian Wei at email@example.com