An earthquake fault line under Japan Atomic Power Co.'s Tsuruga nuclear plant may be active, a report commissioned by the Nuclear Regulation Authority concluded, raising the likelihood it will be permanently shut.

The Tsuruga atomic station is one of six nuclear plants being investigated for active fault lines as part of a safety overhaul following the Fukushima disaster. Laws in Japan, which experiences about 10 percent of the world's earthquakes, prohibit building reactors on active faults.

While the ruling today in a draft report indicates Japan Atomic -- owned by utilities including Tokyo Electric Power Co. and Kansai Electric Power Co. -- should decommission the plant, the ruling can be appealed. All but two of Japan's 50 reactors are shut for safety checks.

"The crush zone running under the Tsuruga power station is very likely an active fault,?according to the report. The NRA may review the conclusion if the plant operator provides "objective data that deny the possibility that the fault is active" through additional investigation, the report said.

Today's report focused on the Tsuruga No. 2 reactor and was compiled by a team led by Kunihiko Shimazaki, an NRA commissioner, and four other scientists. The team in December ran a two-day on-site survey at the plant about 30 kilometers north of Lake Biwa, which supplies drinking water for the Kansai region

The team made a preliminary assessment last month that the fault was likely active, which Japan Atomic said at the time was "totally unacceptable." The company said it will carry out studies to support its claim that the fault is inactive.

The NRA, which was set up after the Fukushima nuclear disaster, is drawing up new rules on nuclear safety for release in July, which leaves its present legal authority in limbo.

If faults under nuclear power plants are judged active, the NRA doesn't have legal authority to cancel a reactor installation permit or shut down operating reactors before new laws are implemented in July, Gyo Sato, the NRA's spokesman, said by phone today. The regulator can only use administrative guidance to keep reactors idled, Sato said.

Japan Atomic would likely delay a decision to decommission the reactor as long as possible, Hidetoshi Shioda, a Tokyo-based senior energy analyst at SMBC Nikko Securities Inc. said by phone today before the release of the draft. "The issue will remain deadlocked," he said.

Kansai Electric, which owns 18.54 percent of Japan Atomic, may have to pay some of the costs if the 1,160-megawatt Tsuruga No. 2 reactor is decommissioned, President Makoto Yagi said in December. Decommissioning a reactor of that size may cost as much as 56.6 billion yen ($622 million), the Federation of Electric Power Companies, a group of Japan's 10 regional utilities, estimated in 2007.

Japan Atomic supplies electricity produced at Tsuruga and its Tokai Dai-Ni nuclear plants to five utilities including Tokyo Electric and Kansai Electric Power Co., according to the company. Tokyo Electric, currently under the government's control, is the biggest stakeholder in Japan Atomic with 28.23 percent of voting rights.

Tsuruga's No. 2 unit started commercial operation in 1987. The No. 1 unit in Tsuruga was Japan's first commercial reactor when it started up in 1970, according to the company. Both reactors are offline for safety checks.

The NRA draft will be completed after feedback from Japan Atomic and a peer review by scientists who are investigating faults under other plants, Shimazaki said at the meeting today.

The NRA report on reactor No. 2 will raise questions about the safety of the No. 1 unit at the same plant, raising the bar for restarting the reactor, Shioda said.

Japan Atomic's Tokai Dai-Ni atomic plant is unlikely to be restarted because of strong local opposition, Shioda said. The Dai-Ni station lost external power during the March 11 earthquake and tsunami in 2011 that wrecked Tokyo Electric's Dai-Ichi station 110 kilometers north up the coast.

Japan's guidelines for nuclear plants defines active faults as those that may have moved in the past 120,000 to 130,000 years or later, according to the NRA.

That may change as in the NRA's latest draft for safety standards to be introduced in July, earthquake fault activity may be pushed back to 400,000 years ago.

Under that definition, faults under Tokyo Electric's Kashiwazaki Kariwa atomic plant, the world's biggest, could be judged active, Kyodo News reported last week. Restarting Kashiwazaki is key to reviving Tokyo Electric, which was taken over by the government after it was unable to meet liabilities for the Fukushima nuclear accident.

The NRA is also investigating faults under five other nuclear plants including Kansai Electric's Ohi and Mihama plants. Others are owned by Tohoku Electric Power Co., Hokuriku Electric Power Co. and Japan Atomic Energy Agency, according to the regulator.

From early May to July last year, Japan was without nuclear power as all its rectors were offline for safety checks and maintenance.

That may repeat this year as Kansai Electric's No. 3 and No. 4 reactors at its Ohi plant, the only two running in Japan, will be shut for maintenance in September as is required every 13 months for nuclear plants, Takahiro Senoh, the company's spokesman, said by phone today. (Bloomberg)