Embattled Tokyo Electric Power Co. is putting a sales veteran at the helm as the utility grapples with compensation over the Fukushima nuclear accident and sells the public on a 10-percent rate hike.
Managing Director Naomi Hirose will take over from Toshio Nishizawa as president at the end of June, pending shareholder approval, TEPCO decided at an extraordinary board meeting on May 8.
Hirose, 59, has spent much of his career in sales, serving as chief of TEPCO's Kanagawa branch and its marketing and customer relations department.
The selection of Hirose, who has been in charge of compensating victims of the accident at the Fukushima No. 1 nuclear power plant, marks a departure from tradition at TEPCO.
Recent presidents, including Nishizawa and Tsunehisa Katsumata, who is now chairman, hail from the corporate planning department, known for its inward-looking nature.
Nishizawa, for example, came under heavy criticism from customers last year when he described planned rate hikes as falling within the utility’s “rights and obligations.”
The government-backed Nuclear Damage Liability Facilitation Fund said the new president must be drawn from outside the corporate planning department to make a clean break from the current leadership.
Still, Hirose, said to be close to Katsumata, is seen as a compromise for the government and the fund.
Kazuhiko Shimokobe, who chairs the fund’s steering committee and will replace Katsumata as chairman in June, originally considered promoting someone younger than Hirose.
Other senior officials of the fund even listed mid-level managers in their early 50s as potential candidates.
Some young employees called on the fund to implement bold reforms when TEPCO submitted its special comprehensive business plan to rebuild its operations to the government late last month.
Some TEPCO executives, however, were opposed to Nishizawa being replaced, saying the departures of both the president and chairman will hamper the utility’s business. Some creditor banks also demanded keeping Nishizawa as president.
Shimokobe eventually settled on Hirose, considering his experience in leading large TEPCO organizations.
With the shakeup at the top, Hirose will manage TEPCO’s day-to-day operations. Shimokobe, a lawyer by profession, will oversee management.
In addition to compensation for victims of the Fukushima nuclear disaster, Hirose’s key tasks include gaining support from customers for proposed rate hikes.
TEPCO has been raising rates for corporate customers by 17 percent since April. A 10-percent hike is planned for household users from July. Rates need to be raised to cover increased fuel costs for thermal power generation, with all of TEPCO's 13 nuclear reactors offline.
Another challenge facing Hirose is to restart the Kashiwazaki-Kariwa nuclear power plant in Niigata Prefecture as part of efforts to post a net profit in fiscal 2014, one of the goals included in TEPCO’s special comprehensive business plan.
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