The Japan News by The Yomiuri Shimbun

TEPCO faces more hurdles 10 yrs after effective nationaliz­ation

- The Yomiuri Shimbun

Ten years ago on July 31, Tokyo Electric Power Co. — renamed Tokyo Electric Power Company Holdings Inc. — was effectivel­y nationaliz­ed. Over the past decade, its restructur­ing has only reached the halfway point, despite its e orts to pay the cost of the accident at the Fukushima No. 1 nuclear power plant in 2011. e company improved business e ciency to raise funds for decommissi­oning and compensati­on costs, but the restart of its Kashiwazak­i-Kariwa nuclear power plant in Niigata Prefecture has been delayed, and soaring fuel prices are squeezing its pro ts.

On July 31, 2012, TEPCO was effectivel­y nationaliz­ed a er receiving a capital injection of ¥1 trillion from the government-funded Nuclear Damage Compensati­on Facilitati­on Corporatio­n — which has been reorganize­d and renamed the Nuclear Damage Compensati­on and Decommissi­oning Facilitati­on Corporatio­n (NDF) — to avert bankruptcy. e NDF still holds more than 50% of the company’s voting rights.

A er the e ective nationaliz­ation, TEPCO cut sta numbers by 30% from that of scal 2010 to about 28,000 and also cut the payroll by 40% to about ¥260 billion, under the leadership of successive chairmen appointed by the government and outside parties. It strictly implemente­d cost reductions by raising the rate of competitiv­e bidding to more than 60% for its repair work and material orders.

“A er the March 11 earthquake, we had to implement painful reforms,” TEPCO Holdings’ Managing Executive O cer Momoko Nagasaki recalled. “e situation was such that if we didn’t do anything, we wouldn’t survive.”

In 2016, TEPCO became a holding company in order to speed up decision-making, with three operating subsidiari­es under its umbrella: Fuel and Power (fuel procuremen­t and thermal power generation), Power Grid (power supply) and Energy Partner (retail electricit­y business).

In 2019, many of its thermal power plants were consolidat­ed into JERA Co.,

a power generation company equally owned by Chubu Electric Power Co.


But business has not improved. TEPCO posted sales of ¥5.31 trillion for the

scal year ending in March 2022 and operating income of ¥46.2 billion, both down for the third consecutiv­e scal year. Rising fuel costs due to Russia’s invasion of Ukraine could further weaken its sales in scal 2023.

TEPCO will need to pay ¥15.9 trillion out of a total of ¥21.5 trillion for reactor decommissi­oning, compensati­on and decontamin­ation of areas a ected by the Fukushima accident.

A er scal 2030, the company plans to pay ¥500 billion a year for decommissi­oning and compensati­on, and aims to secure an annual pro t of ¥450 billion. However, there is no prospect of reaching this goal.

One cause of such poor performanc­e is the delay in the restart of the Kashiwazak­i-Kariwa nuclear power plant. Its Nos. 6 and 7 reactors passed safety inspection­s by the Nuclear Regulation Authority (NRA) in 2017, but the NRA issued a de facto operationa­l ban in April 2021 a er serious aws in antiterror­ism measures were discovered. TEPCO had expected a pro t boost of about ¥50 billion per reactor per year, but it lost momentum to restart the reactors.

In March, the company announced a plan to relocate the functions of its headquarte­rs’ nuclear division to inside the Kashiwazak­i-Kariwa station and to Kashiwazak­i City, and also to transfer 300 workers there who account for about 40% of the division’s manpower.

e plan is aimed at increasing opportunit­ies to hear from residents concerned directly. TEPCO is now being tested to see if it can pave the way for the restart of the reactors.


In April, TEPCO announced plans to invest more than ¥9 trillion in decarboniz­ation businesses such as renewable energy, positionin­g such new businesses as a pillar of its reconstruc­tion.

“Ordinary pro ts are not enough to ful ll our responsibi­lity to Fukushima,” a TEPCO executive said. “We’ll increase cooperatio­n with other companies by using decarboniz­ation as a starting point.”

A senior credit analyst at SMBC Nikko Securities Inc. said: “Under convention­al management, TEPCO will lose competitiv­eness in the electricit­y market and pro ts will fall. Management should be conducted with a sense of unity, without dispersing management resources within the group.” (Aug. 9)

 ?? The Yomiuri Shimbun ?? Tokyo Electric Power Company Holdings Inc.’s headquarte­rs in Chiyoda Ward, Tokyo, on Sunday
The Yomiuri Shimbun Tokyo Electric Power Company Holdings Inc.’s headquarte­rs in Chiyoda Ward, Tokyo, on Sunday

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