Reactor restart plan of Japan's Kyushu Electric Power is inadequate: Moody's

The company needs to step up more.

Moody's Japan K.K. says that Kyushu Electric Power Co., Inc.'s plan to restart two nuclear reactors at its Sendai plant in the next few months will not be enough to return the company to profitability.

According to a release from Moody's, while the ratings agency would consider such action as a positive first step, to achieve stable operating profits, Kyushu Electric Power will need in fact to restart a total of four reactors or raise its tariffs again.

Moody's conclusions were contained in its just-released "Kyushu Electric Power: Frequently Asked Questions".

Here's more from Moody's:

Accordingly, Moody's will not change Kyushu's rating outlook to stable from negative until it demonstrates its ability to generate a sustainable profit.

Moreover, Moody's concludes that if Kyushu cannot ultimately restart its four nuclear reactors or raise its rates further, it will likely downgrade its rating.

Moody's sees reactor restarts as the most viable path back to profitability because the regulators are unlikely to approve a large second tariff hike even though the nuclear-powered utility's rates are low when compared to its peers.

Kyushu Electric Power Co., Inc., headquartered in Fukuoka, Japan, is one of the ten major electric utilities in Japan.