Chubu Elec Shares Tumble After Call To Shut Nuclear
Author: Chikako Mogi
Chubu Electric Power Co shares tumbled as much as 14 percent on Monday after Japan's prime minister called for a shutdown of its nuclear plant in central Japan due to worries a large earthquake could trigger another nuclear crisis.
Chubu Electric is seeking a meeting with Prime Minister Naoto Kan and will likely heed Kan's legally non-binding request to close the Hamaoka plant if it can confirm government support for issues that will arise from a shutdown, Japanese media said.
Chubu may hold a board meeting as early as Monday to make a final decision. The board met Saturday to discusss the matter without reaching a decision.
Shares of Chubu, Japan's third-largest utility, were down 12 percent at 1,555 yen as of 0053 GMT, after falling as low as 1,521 yen. Chubu's tumble helped push Tokyo's electric and gas subindex down 2.5 percent.
"This news is triggering uncertainty not just about Chubu Electric but the whole utility sector," said Yoshinori Nagano, a senior strategist at Daiwa Asset Management.
"Investors are concerned that on the back of this news other reactors currently under inspection may not resume operations soon."
The move to shutdown Hamaoka, seen at high risk to forecasts of a powerful earthquake in coming decades, follows pressure on the government to review Japan's nuclear energy policy after a March 11 quake and tsunami crippled another plant, triggering the world's worst nuclear accident in 25 years.
Kan, who has been under fire for his response to the crisis at Tokyo Electric Power Co's (TEPCO) Fukushima Daiichi plant in northeast Japan, said the government would try to prevent the halt of the Hamaoka reactors from causing power supply problems.
Chubu says it can meet peak demand of 25,600 MW even if Hamaoka shuts. Relying on thermal plants to make up shortfalls if Hamaoka closes would push up costs by 700 million yen per day -- or about 256 billion yen a year, double its projected profit of 130 billion yen in the year to March 2012.
An unusually hot summer would raise the risk of Chubu not having enough capacity to meet peak demand, which could cause problems for Toyota Motor Corp and other major manufacturers with factories in the region.
Chubu chairman Toshio Mita, who flew to Qatar to discuss possible procurement of liquefied natural gas, was expected to return to Japan on Monday, the Yomiuri newspaper said.
A Chubu spokesman declined to confirm Mita's schedule, the board meeting and whether a meeting with Kan was being sought.
(Additional reporting by Ayai Tomisawa; Editing by Edmund Klamann and Nathan Layne)