Long seen as “silent” shareholders, local governments are expected to demand bold reforms, such as abolishing nuclear power plants, at the general shareholders’ meetings of electric utilities.
But they may not have enough voting power to force big changes in the industry.
All 10 of Japan’s regional electric power companies, except for Okinawa Electric Power Co., are scheduled to hold their shareholders’ meetings on June 27.
At Kansai Electric Power Co.’s meeting, Osaka Mayor Toru Hashimoto is set to propose “the abolition of all of its nuclear power plants as soon as possible” in company’s articles of incorporation.
The city of Osaka is the largest shareholder of Kansai Electric, with a 9.37-percent stake in terms of voting rights.
Hashimoto was opposed to the central government’s decision to restart two reactors at Kansai Electric’s Oi nuclear plant in Fukui Prefecture, citing skepticism about its safety. However, the mayor eventually backed down.
The reactors are scheduled to go online next month, the first of Japan’s 50 reactors to resume operations after “stress tests” following the accident at the Fukushima No. 1 nuclear power plant in March last year.
Hashimoto said he wants to prompt a review of nuclear power plant operations by attending the shareholders meeting.
“We have held a stake on the premise of no risks involved (in nuclear power plant operations), but I want to call for full discussions,” Hashimoto said. “I wonder if it is sound for a private enterprise to operate nuclear power plants.”
Kansai Electric’s service area includes the nation’s second largest business center. It also serves the major cities of Kobe and Kyoto, which together with Osaka plan to make three proposals at the shareholders’ meeting, including disclosure of remunerations for the utility’s directors.
Kobe holds a 3.06-percent stake in Kansai Electric, while Kyoto controls less than 1 percent in terms of voting rights.
Many local governments gained stakes in utilities when electricity sectors were transferred to those companies before and after World War II.
Naoki Inose, vice governor of the Tokyo metropolitan government, plans to raise four proposals at the shareholders’ meeting of Tokyo Electric Power Co., including the inclusion of “giving top priority to providing customer service” into its articles.
Inose’s move is intended to help improve TEPCO’s cost structure and reduce the size of its planned electricity rate hike to reflect the voices of its customers, such as residents and small and medium-sized enterprises, in the capital.
TEPCO, financially strapped and being placed under state control because of the accident at its Fukushima nuclear plant, is under increasing pressure to change.
“Unless it is not spelled out in the articles, TEPCO’s reform will not proceed,” Inose said.
The metropolitan government has already sent documents seeking support from about 400 companies that each hold at least 100,000 TEPCO shares.
But the demands of Osaka city and the Tokyo metropolitan government will not likely go through. Amending the companies’ articles of incorporation requires approval from at least two-thirds of shareholders present at the meeting.
Still, TEPCO officials were not ignoring Inose’s planned move, which could prompt information disclosure and cost-cutting efforts on the part of the utility.
“What Inose, who is a ‘visible’ shareholder, will say (in the meeting) itself will carry significance,” a TEPCO official said.
Other local governments are shifting their stance toward utilities.
The city of Makinohara in Shizuoka Prefecture is expected to endorse a proposal by some shareholders of Chubu Electric Power Co. to break away from nuclear power generation.
“We cast a blank vote last year, but we want to make explicit our intention,” Makinohara Mayor Shigeki Nishihara said.
Chubu Electric, which serves the Chubu region, including Nagoya and Shizuoka, cannot ignore Makinohara’s words. The utility must win consent from the city to restart the Hamaoka nuclear power plant, which is located 10 kilometers from Makinohara.
Makinohara’s turnaround stems from mounting pressure from Suzuki Motor Corp., which operates its core plant in the city. The automaker opposes the restart and plans to move some functions out of the city because of the risks at the nuclear power plant.
In May last year, then Prime Minister Naoto Kan asked Chubu Electric to halt operations of the Hamaoka plant, citing its vulnerability to a huge quake and tsunami. The plant sits in an area where a powerful earthquake has long been predicted.
Nichinan, a city in Miyazaki Prefecture, is also expected to toughen its stance toward Kyushu Electric Power Co. this year by casting a blank vote to a proposal to suspend the utility’s nuclear power plants.
The city, which owns 56,000 shares of Kyushu Electric, objected to a similar proposal last year.
A Nichinan official said the change in stance was made to take into account various public opinions about nuclear power.
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