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TOKYO, April 2 (Reuters) - Japan's Kyushu Electric Power Co has become the second nuclear generator to seek state support this week as reactors across the country remain idled and industry losses mount three years after the Fukushima nuclear disaster.
Kyushu Electric, a regional monopoly that supplies power in southern Japan, said on Wednesday it was in talks with state-owned Development Bank of Japan for financial backing. On Tuesday, a source said Hokkaido Electric Power Co, which supplies Japan's northernmost island, had asked the same bank for financial assistance.
All of Japan's 48 nuclear reactors have been shut down, pending stringent safety checks, since a massive earthquake and 13-metre-high (43-feet-high) tsunami smashed into the Fukushima nuclear complex in March 2011, triggering a meltdown in the world's worst nuclear crisis since the 1986 Chernobyl disaster.
With no schedule for nuclear restarts, utilities have been forced to burn expensive fossil fuels for power generation. They are set to report a third year of annual losses.
"We are in consultations with the Development Bank of Japan about receiving capital support, but since nothing has been decided I am unable to comment further," said Kyushu spokesman Yuki Hirano.
Kyushu Electric is asking the bank to buy 100 billion yen ($965.5 million) of preferred stock in the company, a source said. The lender is considering the request, which was reported earlier by the Nikkei business newspaper.
If both Kyushu Electric and Hokkaido Electric get the aid, they would join the stricken Fukushima plant's operator, Tokyo Electric Power Co (Tepco), in receiving government bailouts. Other nuclear operators may be forced to turn to the government, the Nikkei said on Tuesday.
In 2012, the government took a controlling stake in Tepco. The company still relies on constant taxpayer handouts to pay compensation to those affected by the nuclear disaster, which forced 160,000 people from their homes.
Shares in Kyushu Electric were down 4.6 percent in mid-morning trade, after falling as much as 6.5 percent, versus a 1.1 percent rise in the benchmark Nikkei 225.
Kyushu Electric has estimated a net loss of 125 billion yen for the year ended March 31.
Japanese banking practices make it difficult for lenders to extend credit, including refinancing existing loans, to companies that post three consecutive years of losses.
Six of nine regional monopolies that operate reactors in Japan have raised prices in the wake of the Fukushima crisis, while one, Chubu Electric Power Co, has a request to lift rates under review. Price increases for residential customers must be approved by the government.
Japan's nuclear regulator has placed two of Kyushu Electric's reactors on a shortlist for a final round of safety checks, leading to speculation these units may be the first to be restarted.
Prime Minister Shinzo Abe is moving to revive nuclear power as a core part of Japan's energy mix, but many of those idled reactors will never be restarted. ($1 = 103.5750 Japanese Yen)
(Reporting by Taiga Uranaka and James Topham; Writing by Aaron Sheldrick; Editing by Mark Bendeich)