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Japan's nuclear love affair turns sour

Prime Minister Naoto Kan is steering the country away from nuclear power, but how far is he prepared to go?

While deaths from radiation exposure have so far been avoided, the human cost of the crisis is weighing heavy on TEPCO and the government. About 80,000 people living within a 12-mile radius have been forced to evacuate their homes and have yet to be given an indication of when they can return permanently.

Farmers and fishermen who have seen their businesses ruined say TEPCO and the government are not doing enough to help them.

For its role at the center of the crisis, TEPCO has encountered widespread opprobrium and now faces a compensation bill that could run into tens of billions of dollars.

On Friday, the government approved a compensation plan that involves the issuance of special-purpose bonds by the state, annual premiums from TEPCO and contributions by other electric utilities that operate nuclear plants.

Controversially, the government's top spokesman, Yukio Edano, called on TEPCO's lenders to waive debts to give the utility a fighting chance of meeting its compensation targets.

In return the utility, which has seen its market value plummet 77 percent since the disaster, has accepted there will be no upper limit on damages. It must also cut costs and open its management up to greater scrutiny.

The compensation plan may have secured TEPCO's survival as a listed company, the future of Japan's energy policy rests on a continuation of the power frugality of recent weeks as well as more diverse energy sources.

The key, say observers, lies in promoting clever energy use, not just in diversifying energy sources. They point to the recent success of energy-saving measures by businesses and households in Tokyo — moves as simple as switching off escalators and revolving doors — which have enabled utilities to lower the peak-time cut in power usage this summer from up to 25 percent to 15 percent below normal demand.

The months ahead, when most of the country is blanketed in stultifying humidity and air conditioners are left on to work their magic, should prove whether or not Japan is up to the job.