The enormous cost of building new nuclear

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For example, if the commission rate of electric power company A at a certain time is 5%, and the electricity bill is 10,000 yen per month, 500 yen of that is the profit of the electric power company. The total amount of fees collected from customers is the same as the total cost including profit. The construction cost of nuclear power plants is much higher than other energy sources. If two new nuclear power plants are built at a cost of 300 billion yen, 5% of 600 billion yen = 30 billion yen in profits can be obtained. Since the huge cost directly translates into huge profits, investments are recovered without fail, and financial institutions lend without limit. Since it is easy to raise funds by issuing corporate bonds, financial institutions have particularly valued electric power bonds. It is no wonder that the construction of nuclear power plants accelerated under the Liberal Democratic Party administration. The number of tribal politicians employed by electric power companies also swelled, and a huge syndicate promoting nuclear power was completed by politicians, government officials, business people, academics, and the media.

The normalization of high costs due to the construction of new nuclear remove background image power plants and high remuneration rates have pushed up electricity prices to 1.5 to 2 times those of major developed countries, and electric power companies are making huge profits. Most people are unaware of the price difference between domestic and overseas.

However, the momentum stalled in the 1990s due to the debate over the liberalization of the electricity market and the issue of price differences between domestic and foreign powers and developed countries. Price hikes exceeded their limits, fuel costs soared, and power companies, which were forced to counter the movement toward liberalization, shifted from a high-cost approach to a cost-cutting approach. The commission rate, which had fallen to the 5% range at the time, was subsequently forced to fall to the 4% to 3% range.

So what did the power companies do? They started to stop the decline in real profits by increasing the operating rate of existing nuclear power plants, which they had invested huge amounts of money in, and "recovering" the costs. It was also in 1995 that the "yardstick method," which reflects base costs in the assessment of rate setting and allows excess profits for the realization of low costs, and the "fuel cost adjustment system," which hedges against rising crude oil prices, were established.