Tepco faces $10 billion loss
Tepco's losses have been put at ¥781.6 billion ($9.8 billion) for financial year 2012. About half of this stems from the cost of compensation and cleanup; the other half is from the higher cost of generation in Japan's shaken power market.
Tepco's losses have been put at ¥781.6 billion ($9.8 billion) for financial year 2012. About half of this stems from the cost of compensation and cleanup; the other half is from the higher cost of generation in Japan's shaken power market.
Decreases in Japanese electricity use over the year as a result of consumer efforts to conserve power and also a decline in national production activities in the wake of the March 2011 earthquake and tsunami led to an 8.6% decrease in electricity sales for the company. Despite an increase in the unit price of electricity, this resulted in a fall of 0.9% in electricity revenues for the company at a time when ordinary expenses shot up by 13.2% over 2010 figures to ¥5802 billion ($72.7 billion). The company's ordinary loss for the financial year from 1 April 2011 to 31 March 2012 was ¥400.4 billion ($5.0 billion), with net losses of ¥781.6 billion ($9.8 billion) when the huge extra expenses of the Fukushima accident are taken into account.
Cost cutting exercises, such as cutting earnings and bonuses and reducing repair expenses by cutting procurement expenditure, had failed to offset the increase in fuel costs needed to replace output from idled nuclear power plants over the past financial year. Although it expects its fuel costs to continue to increase, Tepco says it expects net losses to be in the region of ¥100 billion ($1.25 billion) for the 2012 financial year reflecting a gradual economic recovery.
Tepco supplies around one-third of Japan's electricity, and prior to March 2011 nuclear accounted for nearly 27% of the company's installed capacity. However, all of Japan's nuclear reactors, including Tepco's seven units at Kashiwazaki Kariwa, are now off line for the completion of the first phase of stress tests following the tsunami that wrecked Tepco's Fukushima Daiichi plant. Tepco is struggling to meet massive compensation and clean-up costs following the Fukushima accident, and the Japanese government recently approved measures to provide some ¥1 trillion ($12.5 billion) in state funds to the company as part of a long-term special business plan to cover these claims.
Researched and written
by World Nuclear News
