Tokyo Electric Power Company Holdings, Inc. has put together a new restructuring plan. These plans are drawn up approximately every three years to devise how to pay for indemnification, decommissioning, decontamination and other measures following the accident at the Fukushima No. 1 nuclear power plant.
The latest plan was supposed to be compiled last spring, but it was delayed for more than a year due to a series of incidents of misconduct.
The business environment for TEPCO has become increasingly severe due to the misconduct as well as intensifying competition in electricity sales. To increase profitability and to steadily move forward with its response to the accident at the nuclear power plant, the company should first do its utmost to restore trust.
The framework under which TEPCO bears about 16 trillion yen of the 22 trillion yen cost of dealing with the aftermath of the accident has not been changed from the previous plan, and from fiscal 2030 on, the company aims to have a yearly profit of 450 billion yen after paying 500 billion yen annually in decommissioning and other costs.
TEPCO has a responsibility to steadily implement the plan to ensure the recovery of Fukushima, but it must be said that the road ahead is arduous.
In the latest business plan, TEPCO presumes that the restart of the Kashiwazaki-Kariwa nuclear power plant in Niigata Prefecture, which is essential for improving profits, will take place in fiscal 2022 at the earliest. This is a delay from the previous plan and is based on the key premise that safety measures will be thoroughly implemented and that TEPCO will gain the understanding of the local community.
TEPCO estimates in the plan that the restart of the Kashiwazaki-Kariwa plant will boost profits by about 50 billion yen per year per reactor. However, a series of insufficient antiterrorism measures have been uncovered this year, such as an employee using another person's ID card to enter the central control room.
Because the Nuclear Regulation Authority has issued an order prohibiting the transport of nuclear fuel at the plant, an early restart of the nuclear plant is not in sight.
The plan states that TEPCO will undertake drastic reform of its organization and corporate culture in order to regain trust. In addition to reviewing personnel assignments, the company will seek guidance from experts in corporate governance to identify weak points in the organization. The company must come up with concrete measures as soon as possible.
With the liberalization of electricity retailing, new electric power companies now hold an about 30% market share in TEPCO's service areas. It is important for TEPCO to increase its ability to generate profits through new businesses.
The plan includes a policy for decarbonization, or efforts to not emit greenhouse gases, by investing a maximum of 3 trillion yen in renewable energy and power grids by fiscal 2030 to make decarbonization-related business a source of revenue.
TEPCO set a goal of securing 100 billion yen in annual profits by fiscal 2030 from renewable energy-related projects such as offshore wind power and overseas hydroelectric projects.
However, there are still technical issues to be solved in expanding offshore wind power, and curbing costs will not be easy. TEPCO lacks expertise in overseas business operations. It is necessary for the power company to strengthen cooperation with companies in other industries and abroad.
-- The original Japanese article appeared in The Yomiuri Shimbun on Aug. 10, 2021.
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