A Japanese town’s agreement to restart the nuclear reactor reflects a reliance on subsidies

The Onagawa Nuclear Power Plant of the Tohoku Electric Power Company was photographed in Onagawa, Miyagi Prefecture, on August 21, 2020 (Mainichi)

TOKYO – The reliance of Japanese local governments on “nuclear plant money” distributed by the national government was recently highlighted when a city granted its approval to restart a reactor at a power plant severely damaged in the Great East Japan Earthquake and Tsunami in March 2011.

The Onagawa Township Government of Miyagi Prefecture in northeastern Japan granted the Tohoku Electric Power Company permission to restart Reactor No. 2 at the Onagawa Nuclear Power Plant on November 11.

Of all the money revolving around Japan’s nuclear industry, the money that has the greatest impact on local governments hosting power plants flows from a triangular set of legislation collectively called the Three Energy Source Development Laws. These subsidies, which are based on the operating performance of a particular nuclear plant, have been distributed under the pretext that they will be used to enhance local services, including building childcare centers, libraries, and other facilities.

Miyagi Governor Yoshihiro Murai, center, Mayor Onagawa Yoshiaki Suda, left, and Hiroshi Kamiama, mayor of Ishinomaki, right, are seen giving approval to reactivate Reactor No. 2 at the Tohoku Electric Power Corporation’s Onagawa Nuclear Power Plant, at a press conference Mainichi / Daisuke Wada, in the northeastern Japanese city of Ishinomaki, Miyagi Prefecture, on November 11, 2020.

However, the Japanese government has taken measures such as changing the name of subsidies and their governing mechanisms after the 2011 disaster, so that local governments can still obtain funds even when the power plant in their jurisdiction has been offline for long periods. At least 115 billion yen (about $ 1.11 billion) has been distributed in aid and aid from the national government to the local hosts of nuclear power plants in this fiscal year alone.

According to Onagawa, it received about 530 million yen (about $ 5.1 million) in subsidies based on the three energy source development laws in fiscal year 2010, the year before the Great East Japan Earthquake. This increased after the disaster, with support reaching more than 1.4 billion yen (about $ 13.5 million) in fiscal year 2017 and 2018. This included payments totaling 1.08 billion yen (about $ 10.4 million) related to two reactors at the plant in service for more than 30 years.

Onagawa’s total spending in fiscal 2019 was 34 billion yen (approximately $ 327.4 million). If the fixed property taxes paid for the nuclear power plant (about 2.7 billion yen, or roughly $ 26 million) are added to the subsidies arising from the three energy source development laws, the money derived from the nuclear plant accounts for more than 10% of the city. Annual revenue.

“We are receiving a lot of help in terms of funding,” a municipality official commented.

Of the money based on the three energy development laws, Onagawa earned about 350 million yen (about $ 3.37 million) more than ever in one support to boost the area around the stations – a category designed to elicit cooperation from the stations’ host communities. In fiscal year 2019, the benefits were allocated to the salaries of seven local Social Welfare Council employees (about 28 million yen, or roughly $ 270,000), and the hospital’s electronic medical record system was updated (about 77 million yen, or about $ 742,000), Renovation of a gymnasium, tennis court and baseball field (about 240 million yen, or nearly $ 2.31 million), among other things.

This support can be used for various purposes under the name of promoting public services. According to municipal project guidelines, although there have been many cases in which local tax revenues accounted for about 10-20% of the expenditures, the costs of refurbishing sports facilities were fully covered by subsidies. Onagawa’s situation is not unique. Local governments hosting nuclear power plants generally rely heavily on heavy subsidies.

The policies of the national government contribute significantly to the increase in subsidies even as nuclear power plants remain closed. The Ministry of Economy, Trade and Industry has revised regulations following the nuclear disaster so that plants are considered “in operation” to a certain extent even when their reactors are off-line. Takeo Kikawa, a professor at Japan International University, suggested that the national government “may have been distributing generous subsidies even when the plants were suspended to make it easier for local governments to agree to restart the reactor.”

According to the Onagawa government, the reforms that allowed local bodies to obtain more funding based on the years the power plant was in service was also a factor behind the increase in subsidies in the city. Central government figures have raised concerns about this specific change in the subsidy system, including that the Economy Ministry is doing so “in their own interests.”

Moreover, the public relations and research subsidies that Onagawa received to cover nuclear power plant tours, informational circulars and other costs, among other purposes, were restored to the same level as before the 2011 disaster (about 10 million yen per year, or roughly $ 96,300) since fiscal year 2015. A senior official at a major electric power company commented, “Overall public relations activities are indispensable for restarting reactors.” It was revealed in the city project evaluation report that the vast majority of contracts to enhance public services and conduct activities related to public relations were negotiated without any competition.

Once Unit No. 2 of the Onagawa Nuclear Plant returns to the Internet, the city is also set to receive subsidies from the nuclear fuel tax, which are collected from the energy company based on the performance of the nuclear plant. Society also reaps more benefits when employees of energy companies, including subcontractors, frequent local restaurants and other companies during their regular inspections.

“This nuclear plant money is a stark example of a government subsidy and aid system,” commented Hideaki Tanaka, professor of tax law at Meiji University. Hence, Onagawa’s approval to restart its local nuclear plant could be seen as inevitable, so host municipalities have become dependent on nuclear money.

(Japanese origin by Yuki Takahashi, Business News section)

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