TEPCO reports 1st profit since Fukushima nuclear disaster

November 01, 2013

THE ASAHI SHIMBUN

Tokyo Electric Power Co. posted its first profit since the Fukushima nuclear crisis started in March 2011, but the utility gave a dreary forecast as disaster-related costs continue to pile up.

TEPCO said Oct. 31 it secured a pretax profit of 141.6 billion yen ($1.44 billion) for the April-September period, a sharp reversal from a loss of 166.2 billion yen a year earlier.

The company’s household electricity rate hike from September 2012 pushed up revenue by 177 billion yen from a year earlier. The utility also cut 55 billion yen in spending by squeezing personnel costs and deferring repair work.

Those measures more than offset the increased fuel costs for thermal power generation to make up for lost capacity at its destroyed or idle nuclear reactors.

Nine of the 10 regional utilities either turned profits or cut losses in the half-year period, although the nation’s 50 nuclear reactors will remain shut down until their safety is confirmed.

But industry executives said reactors must be brought back online as soon as possible to ensure a stable electricity supply.

TEPCO President Naomi Hirose, who is desperately seeking to restart reactors at the Kashiwazaki-Kariwa nuclear plant in Niigata Prefecture, voiced pessimism about the company’s finances for the latter half of the current fiscal year.

“We are bracing for extremely grim earnings,” he said, citing payments due to contractors toward the fiscal-year end in March.

TEPCO says the reactivation of one Kashiwazaki-Kariwa reactor will improve its earnings by more than 100 billion yen.

The utility submitted applications to the Nuclear Regulation Authority for safety screenings for two of the Kashiwazaki-Kariwa nuclear plant’s seven reactors at the end of September.

An NRA screening to confirm whether a reactor complies with new nuclear safety standards that took effect in July is a prerequisite for a restart.

However, even if TEPCO ekes out a single-year profit, the long-term outlook remains bleak as costs for compensation, decontamination and decommissioning pummel the company’s bottom line.

TEPCO has posted an extraordinary loss of about 3 trillion yen for compensation paid to those affected by the disaster at the Fukushima No. 1 nuclear plant. But government assistance has allowed the company to cancel out the deficit with an extraordinary profit of the same amount.

TEPCO has also avoided booking costs for decontamination work in areas around the Fukushima plant that will likely exceed 3 trillion yen. The utility refuses to pay much of the amount as required under law.

Government assistance to TEPCO is expected to reach its limit of 5 trillion yen in the near future.

The government has started talks with the ruling coalition about sharing the burden of the Fukushima decontamination costs.

PUSH CONTINUES FOR REACTOR RESTARTS

Kansai Electric Power Co. posted a pretax profit of 31.5 billion yen for the April-September period, compared with a loss of 171.9 billion yen a year earlier.

Electricity rate hikes from spring increased revenue by 120 billion yen, while costs were slashed by 77 billion yen.

But a senior company official said red ink would have been inevitable if two reactors at the Oi nuclear power plant in Fukui Prefecture had not been operational.

All nuclear reactors in Japan were taken offline by May 2012 following the Fukushima nuclear accident, but the two Oi reactors were able to operate from August 2012 to September this year.

“Only temporary factors allowed us to secure profits,” Kansai Electric President Makoto Yagi said. “We continue to face harsh business conditions.”

Six regional utilities including TEPCO and Kansai Electric have raised electricity rates since the Fukushima nuclear accident. A seventh, Chubu Electric Power Co., applied for a rate hike on Oct. 29.

Hokkaido Electric Power Co. reported a pretax loss of 37.6 billion yen for the six-month period.

“We have been unable to negate the impact of reactors being suspended, and it remains difficult to make profits,” said Katsuhiko Kawai, president of Hokkaido Electric.

Hokkaido Electric, TEPCO, Kansai Electric, Shikoku Electric Power Co. and Kyushu Electric Power Co. have all applied for NRA safety screenings for their reactors.

But the nuclear watchdog appears unable to complete the screening for a single reactor by the end of the year.

According to the NRA, Shikoku Electric and Hokkaido Electric are expected to be the first applicants to submit all documents required for screenings. Even then, the full set of their documents is not expected until late November.

“It is extremely difficult to tell when the screening (for our reactor) will be completed,” Shikoku Electric President Akira Chiba said.

THE ASAHI SHIMBUN
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TEPCO President Naomi Hirose takes questions during a news conference in Tokyo on Oct. 31. (Hikaru Uchida)

TEPCO President Naomi Hirose takes questions during a news conference in Tokyo on Oct. 31. (Hikaru Uchida)

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  • TEPCO President Naomi Hirose takes questions during a news conference in Tokyo on Oct. 31. (Hikaru Uchida)

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