Kai Ryssdal: There are few things less reassuring than an energy company executive trying to be reassuring when he says saying traces of plutonium found on the ground outside a nuclear reactor aren’t at a high enough level to be dangerous to human health.
But that’s where the Tokyo Electric Power Company finds itself today. They’ve found plutonium in ground samples at the plant. They suspect contaminated water is escaping from the damaged reactor and could soon wind up in the ocean. All that is complicating the cleanup and the company’s finances.
Shares of Tepco dropped to the lowest they’ve been in more than 30 years today. And the Japanese government’s now talking bailout. Marketplace’s Alisa Roth has the natural disaster version of ‘too big to fail.’
Alisa Roth: There are only 10 power companies in Japan. And the Tokyo Electric Power Company, or Tepco, accounts for about a third of the country’s electricity market.
Michelle Foss is an energy economist at the University of Texas.
Michelle Foss: Clearly, Tepco and all of the other companies that participate in that industry are vital; they provide the backbone for the country’s economy and its industry.
Which means Japan’s recovery depends on Tepco’s survival. But Tepco is in big financial trouble. Its stock price has dropped almost 60 percent. It has to rebuild its damaged facilities. It has to pay for some of the problems the nuclear disaster has caused. And it has to pay for alternative sources of energy to keep the electricity flowing.
David Weinstein is a professor of the Japanese economy at Columbia. He says the government will have no real alternative except to bail the company out.
David Weinstein: The government is not going to allow Tepco to fail in the sense that it will stop generating electricity.
Tepco has reportedly already asked Japanese banks for billions of dollars in loans. And for the moment, it seems like they’re willing and able to come up with the cash. Weinstein says that may not go on forever, though.
Foss, from the University of Texas, says Tepco and the other Japanese power companies have always worked closely with the government. She says even so, this kind of government takeover is often tricky. And it’s likely whatever changes are implemented at Tepco, the entire industry will have to change, too. The disaster made sure of that from the beginning.
I’m Alisa Roth for Marketplace.
We’re here to help you navigate this changed world and economy.
Our mission at Marketplace is to raise the economic intelligence of the country. It’s a tough task, but it’s never been more important.
In the past year, we’ve seen record unemployment, stimulus bills, and reddit users influencing the stock market. Marketplace helps you understand it all, will fact-based, approachable, and unbiased reporting.
Generous support from listeners and readers is what powers our nonprofit news—and your donation today will help provide this essential service. For just $5/month, you can sustain independent journalism that keeps you and thousands of others informed.