Tepco announces restructuring

Tokyo Electric Power Company (Tepco) has announced a restructuring of the company which will see its nuclear and decommissioning operations remaining under a new holding company, while its non-nuclear businesses will be spun off into three subsidiaries.

Tepco announced yesterday that, as from 1 April 2016, the company would be structured under a holding company to be known as Tokyo Electric Power Company Holdings. Meanwhile, its fuel and thermal generation operations will be placed in a subsidiary called Tepco Fuel and Power Incorporated; its power transmission and distribution business will become Tepco Power Grid Incorporated; and, its electricity retail operations become Tepco Energy Partner Incorporated.

The company said that its nuclear-related operations will remain within the holding company. "The holding company takes responsibility for compensation, decommissioning and revitalization related to the Fukushima nuclear accident", Tepco said.

"Based on this business management system, Tepco Group will establish a sustainable revenue base for corporate revival and fulfil its responsibilities for the Fukushima nuclear accident as it generates resources for Fukushima's revitalization."

Tepco

Tepco said Japan's electricity market "is entering a period of dramatic change". Full liberalization of the electricity retail market is scheduled for April 2016 and the country's power companies are legally required to separate their electricity transmission and distribution operations from their retail business by 2020.

"The changes in Tepco's company structure anticipate these changes and prepare it to succeed in the new, competitive environment, while serving its customers with a stable supply of electricity and full retention of its responsibilities not only for Fukushima but also for safety and reliability throughout its business," the company said.

It added, "Based on this business management system, Tepco Group will establish a sustainable revenue base for corporate revival and fulfil its responsibilities for the Fukushima nuclear accident as it generates resources for Fukushima's revitalization."

Tepco is Japan's largest power company, supplying energy to the greater Kanto area, including the country's two biggest cities, Tokyo and Yokohama. It has 34,000 employees and 29 million customers. As well as the damaged Fukushima Daiichi plant, Tepco also owns the Fukushima Daini and Kashiwazaki-Kariwa nuclear power plants.

In May 2012, the Japanese government approved amendments to Tepco's ten-year special business plan which effectively puts it under state control. Under the amendments, the government provided Tepco with ¥1 trillion ($8 billion) in state funds in return for a 51% stake in the company.

In 2014, Tepco was reorganised into two main sections: a power generation business and a separate division dedicated to decommissioning the Fukushima Daiichi site.

An objective of the Japanese government is to reduce its involvement in Tepco's overall operation and liberate the power generation business for a profitable future separate from the decommissioning task. The government would like to sell its shares in a restructured Tepco and gain what value it can to support the clean-up operation.

Researched and written
by World Nuclear News