The stock slumped as much as 7.5 percent, the largest intraday decline since Feb. 18, 2000, after the Nikkei said the shutdown will be prolonged by checks to ensure the plant will resist future earthquakes. The shares had the second-biggest decline on the Morgan Stanley Capital International World Index.
The tremor, which killed 10 people, has wiped as much as $4.4 billion off the market value at Japan's largest utility. Investors sold the stock on concern the company will have to switch on oil, coal and gas-fired power plants at a time when prices for the fuels are at or near records. Tokyo Electric asked six other generators to make up any supply shortfalls.
``Profit is under extreme pressure, as the additional costs for buying electricity, oil and gas, as well as fixing plants, mount,'' Hirofumi Kawachi, an analyst at Mizuho Investors Securities Co. in Tokyo, said by phone today. ``The shares are expected to drop continuously, and at least until early next week we need to watch them closely.''
Tokyo Electric fell as much as 270 yen to 3,330 yen on the Tokyo Stock Exchange and traded at 3,380 yen at 1:45 p.m., giving the utility a market capitalization of 4.59 trillion yen ($37.6 billion). The decline has wiped as much as 541 billion yen off the company's market value this week. Government-ordered safety checks may delay the restart of the Kashiwazaki-Kariwa nuclear plant for at least a year, the Nikkei reported, without saying where it got the information.
Back-up plan
The utility is reviewing its electricity supply plan to prepare for summer when consumption typically peaks as customers switch on air-conditioners.
``We are drafting a back-up plan to ensure supplies,'' Manabu Takeyama, a spokesman for the utility said by phone.
Tokyo Electric is studying starting up as many as six gas, oil and heavy fuel oil-fired power plants, with total capacity of about 2 million kilowatts, that had been mothballed, Takeyama said. It's also reviewing whether maintenance shutdowns of reactors at the Fukushima Daiichi and Fukushima Daini plants can be shortened or postponed until after the summer season.
The utility's current generating capacity stands at about 58 million kilowatts, compared with forecast demand of about 61 million kilowatts for the summer in Tokyo and surrounding areas. Tokyo Electric's Fukushima Daiichi and Daini stations can generate 9,096 megawatts of power from a total of 10 reactors.
Powerful Earthquake
The Kashiwazaki-Kariwa plant was not designed to withstand an earthquake as powerful as the magnitude 6.8 tremor that struck Niigata prefecture in central Japan on July 16, nor does the facility meet the trade ministry's new earthquake standards put in place last year, Akira Fukushima, deputy director-general for safety examinations at the nuclear and industrial safety agency, told reporters in Tokyo yesterday.
The trade ministry last year updated regulations to make the nation's nuclear power stations more earthquake resistant.
The four operating reactors at Kashiwazaki-Kariwa were shut automatically after the earthquake, and the other three had already been shut for routine maintenance, Tokyo Electric said on its Web site. The plant is 9 kilometers (5.6 miles) from the epicenter of the quake, Yasuhisa Shiozaki, the government's chief cabinet secretary, said on July 17.
Reports by Japan's weather bureau suggest ``a fault line runs under the plant grounds,'' Fukushima said.
Government Criticism
The trade ministry and Kashiwazaki town authorities ordered Tokyo Electric to keep the seven reactors idled pending safety checks. The government criticized the company for being slow to disclose the radioactive leaks.
The quake caused contaminated water from Tokyo Electric's plant to escape into the sea and radioactive material to leak from one of its ventilation systems.
Tokyo Electric is investigating 12 more cases of possible radioactive leaks, Tsutomu Uetsuhara, general manager at the utility's nuclear department, said yesterday.
Japan has 55 reactors that generate about one-third of the country's power, making the nation the third-largest nuclear producer in the world. Tokyo Electric operates 17 reactors.
The biggest decliner on the Morgan Stanley Capital International World Index was Japanese staffing company Goodwill Group Inc., which dropped 10 percent at 1:21 p.m. Tokyo time.
Via: Bloomberg
by Megumi Yamanaka and Yuji Okada
