Industry ministry, consumer agency split on TEPCO wage level

June 29, 2012

By KANAME OHIRA/ Staff Writer

An industry ministry committee appears willing to accept the reduced wage level offered by Tokyo Electric Power Co., but a Consumer Affairs Agency panel is seeking deeper cuts in pay to reflect public sentiment.

The government is set to bail out the embattled operator of the crippled Fukushima No. 1 nuclear power plant, and the two groups are now discussing whether the TEPCO’s plan to raise household electricity rates is appropriate in light of the wages paid to its workers.

The CAA panel presented a set of "checkpoints" to a June 28 meeting of the Ministry of Economy, Trade and Industry's expert committee on reviewing electricity rates.

One of the "checkpoints" asked: "Has (TEPCO) cut its annual per-capita wages by at least around 30 percent?"

Before the disaster at the Fukushima nuclear plant last year, the average annual income of TEPCO’s employees was 7.07 million yen ($89,000). A 30-percent reduction would bring that level under 5 million yen and well below the 5.56-million-yen average that TEPCO presented when it filed its request to increase household electricity rates.

The CAA panel has also called into question bonus payments to TEPCO employees. Japan Airlines Co. and Resona Bank, which were also bailed out with government funds, withheld bonuses three or four straight times. TEPCO plans to pass on the bonuses only for this summer.

However, under the industry ministry's standard, TEPCO’s average annual wage level should be compared with the average for all companies with 1,000 or more employees, which is 5.43 million yen. The ministry’s expert committee plans to give its basic approval to the TEPCO average of 5.56 million yen.

The expert committee also said electricity rates should be reviewed according to rules, and exceptions should not be made simply because the utility is being bailed out with public funds.

But representatives of consumer groups, who were invited to present their opinions to the expert committee, opposed TEPCO’s rate increases.

"It was TEPCO that should have gone," said a representative of the Tokyo Consumers' Co-operative Union. "TEPCO's rate hikes could end up causing street-corner laundries to go instead. I can't tolerate that."

Public opinions gathered by the industry ministry were also presented to the expert committee, with most of the views addressing the issue of TEPCO's personnel expenses. Many complained that the wage and bonus levels were too high.

However, Junji Annen, chairman of the committee, plans to move on to the next topic of whether to include costs related to nuclear power generation in the calculation of electricity rates.

"The question of personnel expenses has been settled," Annen, a professor of law at the Chuo Law School, said.

The expert committee plans to draw up a report to industry minister Yukio Edano in early July.

But Edano must obtain the consent of a "council of Cabinet ministers on commodity price issues" before he gives the green light to the electricity rate hikes. Edano and consumer affairs minister Jin Matsubara share the right to convene the council.

Matsubara has said he will respect the opinions of the CAA panel and the Cabinet Office's Consumer Commission. He is not expected to agree to convene the council of Cabinet ministers unless the questions raised by consumers are properly addressed.

By KANAME OHIRA/ Staff Writer
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TEPCO headquarters in Tokyo (Asahi Shimbun file photo)

TEPCO headquarters in Tokyo (Asahi Shimbun file photo)

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  • TEPCO headquarters in Tokyo (Asahi Shimbun file photo)

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