Tepco slashes loss forecast for year amid asset selloff, cost reductions

AFP-JIJI

Tokyo Electric Power Co. dramatically cut its loss projection Wednesday for the year to March, as it also reported that losses in the first six months more than halved.

The utility said it now expected to lose ¥45 billion this year instead of the ¥160 billion initially forecast, mainly on asset sales and cost cuts.

It also said it lost ¥299.48 billion in the first half of the fiscal year, compared with ¥627.3 billion in the same period of 2011.

Tepco was effectively nationalized after receiving ¥1.0 trillion in taxpayer money to stay afloat earlier this year as it struggled to contain the triple-meltdown crisis at its Fukushima No. 1 plant.

It still faces massive compensation costs and higher power generation expenses, even after the bailout and a hike in prices.

The nuclear plant catastrophe contaminated vast swathes of farmland and forced tens of thousands of people from their homes, and Tepco now faces the extremely dangerous and decades-long task of decommissioning the complex.

In July, the government allowed Tepco to raise household electricity rates in its service area, including Tokyo, by an average of 8.46 percent.

Chubu Electric ties

Kyodo

Chubu Electric Power Co. is aiming to ally with Tokyo Electric Power Co. in nonnuclear thermal power generation, fossil fuel procurement and electricity retail, according to sources.

Chubu Electric’s proposal could lead to the first-ever business alliance between regional electric utilities and help to reduce costs and hold down electricity charges, they said.

Tokyo Gas Co., Osaka Gas Co. and Electric Power Development Co., known as J-Power, have also applied to ally with Tepco.

On Oct. 1, Tepco began accepting applications for alliances as part of its plan to cooperate with other firms in updating nonnuclear thermal power plants and developing new services.

Tepco has been looking for alliance partners as it lacks funds for investment due to the compensation payments it must make as a result of the disaster that started last year at its Fukushima No. 1 nuclear plant.

Tepco’s alliance plan envisages founding a joint special purpose company with a partner to run fossil-fuel thermal power plants and share electricity output, the sources said.

Some oil refiners are also interested in forming alliances with Tepco, they said.