Tokyo Electric Power Co. (9501.TO) plans to ask for almost Y700 billion in extra funding from the Nuclear Damage Liability Facilitation Fund by the end of the month to cover compensation for those affected by the Fukushima nuclear disaster, the Nikkei reported in its Wednesday morning edition.

The utility, known as Tepco, concluded that it will have to make larger-than-expected payments to cover land and buildings owned by those forced to flee the meltdowns at its Fukushima Daiichi nuclear power plant. As a result, the overall financial assistance provided to Tepco for compensation would top Y3 trillion, more than triple the forecast made in November 2011.

Tepco intends to seek the funds after the Liberal Democratic Party-led government takes power this week. The request is expected to be approved after the start of the new year. At the same time, the company will revise the projection in its business reconstruction plan, on which the government signed off in May, that put the compensation amount at Y2.54 trillion.

Last month, the utility asked the government for a new financial assistance program to cover the costs of decommissioning the reactors and clean up land and other contaminated properties. The latest request is separate from this program and seeks funds within the Y5 trillion ceiling already set aside by the government.

Tepco initially reckoned compensation expenses at Y1.01 trillion when it drew up an emergency business plan in November 2011, which the government approved. It then asked for about Y690 billion in additional funds the following month and for another Y850 billion last March. Both requests were approved.

Compensation for land and buildings is expected to swing into full gear as early as next month. Payments are likely to expand as the government redraws evacuation zones near nuclear plants. Furthermore, compensation will be also increased to residents that evacuated voluntarily.

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