By Aaron Sheldrick and Kentaro Hamada
TOKYO (Reuters) - Japan's nuclear utilities face shareholders this week promising restarts of idled plants as soon as next month after costly safety upgrades, plans that look wildly optimistic given they are yet to secure either regulatory or local approval.
A glaring example is the Hamaoka nuclear plant, once dubbed the world's most dangerous for its location near a major earthquake fault zone. Operator Chubu Electric Power Co's $1.5 billion upgrade is unlikely to convince opponents galvanized by ongoing problems from the Fukushima meltdown.
Chubu says it may apply to reboot reactors before March 2015, but others are much more ambitious as they try to cut back on imports of replacement fuels that have added billions to their costs, with firms saying they expect to restart seven reactors by the end of July.
Tokyo Electric Power Co, the operator of the Fukushima plant, and five other listed nuclear operators laid out the schedules to restart reactors in documents submitted to the government to support applications to raise residential electricity prices.
This is despite signs that Japan's atomic regulator will take a tough stance when its new safety guidelines take effect on July 8, and amid fierce local opposition.
"Out of Japan's 50 nuclear reactors, I think Hamaoka is one of the least likely to stay open in the post-Fukushima context," said Hajime Amano, a member of the local regional assembly where the plant is located.
The incumbent governor of Shizuoka prefecture was re-elected by a landslide in regional elections on June 16 after promising to hold a referendum to decide the fate of Hamaoka.
Chubu spokesman Hiroki Kosaka declined to comment when asked whether the company would abide by a popular vote calling for the closure of the plant. He said the company is striving to upgrade safety equipment as much as possible and is explaining its improvements to local residents.
Upgrades the Nuclear Regulation Authority (NRA) requires in its quest to impose the world's toughest earthquake and tsunami standards will cost the industry an estimated $12 billion, according to Tom O'Sullivan, an independent energy analyst based in Tokyo.
The complexity and cost of safety upgrades was highlighted during a recent tour to show off earthquake and tsunami defenses at the Hamaoka station 190 kilometers (120 miles) southwest of Tokyo.
Chubu has thrown up a 1.6 km (1 mile) curtain of concrete and steel at least 2 meters thick that is being built to a height of 22 meters above sea level. The wall sits on concrete foundations dug into the ground to as deep as 33 meters.
Essential buildings have giant steel doors with thick rubber seals to keep out any water that breaches the wall. The plant's emergency headquarters has giant rubber shock absorbers to protect it from the shaking of an expected earthquake.
But even if the upgrades pass muster with the regulator, Chubu Electric will still need sign off from local residents.
"Utilities cannot be optimistic at all about restarts because their need for restarts is confronted with the NRA's need to show they are tough in order to gain credibility with the public," said Mycle Schneider, an independent nuclear energy analyst based in Paris who frequently visits Japan.
Reactors at four stations are being reassessed after new research suggested they sit above active faults. The NRA signaled it would err on the side of safety when it declared that a 26-year old reactor in Tsuruga, western Japan, sits above a fault.
Any delay to restarts will be costly. The fallout from Fukushima in terms of higher fuel and maintenance costs pushed the utilities into a second annual industrywide loss of $16 billion for the year ending in March, and debt is mounting.
Japan's utilities have a median debt-to-equity ratio of more than 300 percent, more than double the level among U.S. operators, and may need more government support.
"The problem for the banks is that it is very hard to give additional loans to the utilities in the current situation because from a private business perspective they are bankrupt," said Howard Schultz, a senior research fellow at Fujitsu Research Institute.
Some observers are more optimistic and argue the nuclear utilities, which all face their shareholders on June 26 at annual general meetings, have reached a turning point.
"Japan's electric-power sector is marching down the path to normalisation," Penn Bowers, an analyst at CLSA Asia-Pacific Markets wrote in a research note. "This is occurring firstly with tariff revisions to reflect increased fossil-fuel costs."
"With new guidelines for the safety of nuclear reactors to be established over the summer, we expect the second leg of normalisation, restarts, to begin later this year," Bowers said.
But long term the utilities need a more predictable operating environment after the LDP returned to power and said it would overturn the previous government's decision to abandon atomic energy, according to Schneider.
"I do think that utilities badly need an energy planning framework that clarifies what capacity will be available, and thus will be needed, and when," Schneider said.
"Only then will they decide to invest either in new capacity or in efficiency."
(Additional reporting by Risa Maeda; Editing by Michael Urquhart)