Japan's TEPCO accepts conditions for state aid

The utility agreed to offer unlimited payouts to those affected and be overseen by a third-party committee set up by the government to evaluate assets and review the company's spending.

TEPCO will be required to promptly and appropriately pay compensation without setting upper limits on the amount and must implement massive cost cuts.

The beleaguered utility submitted a formal request for state aid Tuesday, saying it faced funding problems.

In a statement addressed to trade and industry minister Banri Kaieda, TEPCO President Masataka Shimizu said the company accepted conditions laid out by the government.

TEPCO is expected to book losses of more than $12 billion in the year ended in March due to the crisis at its tsunami-hit nuclear power plant, a report said Wednesday.

The one trillion yen losses include costs to abolish crippled reactors and does not include compensation it will have to pay to people affected by the crisis, the Nikkei business daily said.

The losses will swamp the group net profit of 139.8 billion yen that the firm booked for the nine months to December, the paper said without naming sources. TEPCO has yet to confirm when it will release earnings.

The utility has estimated the cost of decommissioning four reactors at the Fukushima Daiichi Plant at 600 billion yen, the report said, adding that the disposal of fuel rods that can no longer be used would add to the costs.

The company will also write down roughly 480 billion yen in deferred tax assets -- tax money paid in advance that can reduce a subsequent year's income tax -- as it no longer expects to stay in the black in the future, it said.

TEPCO also faces costs to repair thermal power plants.

With nuclear facilities offline, the utility also faces costs to buy natural gas, oil and coal to make up for the lost capacity.

On Tuesday it said it expected surging fossil fuel prices would result in additional costs of one trillion yen for the year started in April.

Outlays for compensation for those affected by the nuclear crisis will be reflected in earnings in line with a financial assistance framework to be drawn up by the government, the Nikkei said.

The cooling systems of the Fukushima plant were crippled by the March 11 tsunami following Japan's biggest recorded earthquake, causing reactors to overheat, triggering explosions and the release of radioactive materials.

One of the world's biggest power companies, TEPCO supplies the Kanto region including Tokyo at the economic heart of Japan and boasts 44.6 million customers -- more than one third of the population.