Tokyo Electric Power Co. and a state-backed bailout fund handed the government Friday a 10-year restructuring plan to stave off insolvency amid the massive costs it faces stemming from the Fukushima No. 1 nuclear plant crisis.
Tepco’s comprehensive special business plan, if approved by industry minister Yukio Edano, would pave the way for the injection of ¥1 trillion in public funds into the nation’s biggest utility as early as July, when it is also planning to hike household electric rates by some 10 percent.
Kazuhiko Shimokobe, a lawyer and a key figure in the Nuclear Damage Liability Facilitation Fund, will become the next Tepco chairman and create a team under his control to oversee the reform process and address problems that may occur due to the sectionalism that has apparently plagued Tepco, sources said Thursday.
The team will include Tepco employees and outside experts.
Under the business plan, Tokyo Electric will cut more than ¥3 trillion in costs through fiscal 2020, while seeking to improve its earnings by raising electricity rates for households from July and restarting reactors at its Kashiwazaki-Kariwa power plant in Niigata Prefecture starting in fiscal 2013.
By such steps, Tepco hopes to swing into the black in the business year through March 2014.
The restructuring document was initially to have been submitted last month but was delayed because the government had difficulty in choosing the successor of current Tepco Chairman Tsunehisa Katsumata.
In addition to trillions of yen in compensation payments for the Fukushima meltdown crisis, the once blue-chip utility faces a heavy financial burden amid increasing fuel costs for thermal power to make up for the shutdown of its other reactors for stress tests ordered in light of the crisis. Tepco’s Niigata reactor s have yet to be given a clean, stress-test bill of health an no idled reactors nationwide have gotten a clear OK to restart.
Tepco also faces massive costs to cover the decades-long decomissioning of four reactors at the Fukushima plant, including three that experienced meltdowns following the March 11, 2011 megaquake and monster tsunami.
Tepco requested the injection of ¥1 trillion in public funds to the Nuclear Damage Liability Facilitation Fund in late March. Tepco President Toshio Nishizawa told reporters at that time that the utility may fall into negative net worth without the taxpayer money.
In return for the aid, the government plans to acquire over 50 percent of Tepco, which would enable the state to choose board members, and if necessary boost its stake to more than two-thirds.