The new entity would also provide insurance against future nuclear disasters, charging annual premiums from Tepco and the other electric companies with nuclear reactors, Japanese business daily Nikkei reported.
These funds might also be used to cover the cost of decommissioning reactors, the report said.
The entity would inject Tepco with government-backed capital, receiving preferred stock in exchange in much the same way as the Deposit Insurance Corp. of Japan helps struggling banks, the Nikkei said.
Tepco would pay for the accident compensation in installments in the form of annual dividends on the preferred shares. The government would decide the size of the dividend payments every year, based on the state of Tepco’s finances, the report said.
The amount would likely be within a range low enough to avoid damaging the company’s credit rating or upsetting Tepco’s ability to provide electricity to the greater Tokyo area, the Nikkei said.
With some 5 trillion yen ($59.7 billion) in corporate bonds outstanding, Tepco might be forced to sharply hike electricity rates if it can’t maintain the credit standing needed to continue raising capital from the market, the Nikkei said. Estimates of compensation range from several hundred billion yen to more than 1 trillion yen.