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Tepco pins profit on restarts, rate rise

kyodo, JIJI 

Tokyo Electric Power Co. would amass a pretax profit of around ¥100 billion in the business year through March 2015 if two reactors at its seven-reactor nuclear plant in Niigata Prefecture can resume operations by next July, according to a plan presented to the utility’s creditor banks.

Tepco could post a loss of about ¥80 billion if reactors at the Kashiwazaki-Kariwa plant remain offline through the year to March 2015, but it estimated that the loss would be more than offset if it resorts to a 10 percent electricity rate hike.

The earnings projections, released Thursday, indicate Tepco sees the reactivation of idled reactors, which would help curtail heavy fuel costs for thermal power generation, as a pillar to put its business on a sound footing.

The creditor banks will examine the firm’s earnings projections and restructuring measures to decide whether to accept Tepco’s loan requests.

The utility plans to revise its current business turnaround plan in December as the company is having difficulty sticking to it.

Under the existing business plan, Tepco was expected to reactivate four of the seven reactors at the Kashiwazaki-Kariwa plant during the current fiscal year as part of measures to move into the black.

But Tepco has so far only applied for safety assessments of reactors 6 and 7, and the process has not shown much progress. Nuclear regulators have been wary amid the utility’s poor handling of the crisis at the Fukushima No. 1 plant.

Among several scenarios presented to the banks, Tepco said it expects to post a pretax profit of about ¥200 billion in fiscal 2014 if the two Kashiwazaki-Kariwa reactors are back online by April. But it will post a loss of about ¥15 billion if the restarts are delayed to January 2015.

Tepco wants to secure ¥300 billion in fresh loans from the major creditors as early as next month and refinance ¥200 billion in existing loans.