Tepco reports profit for first time since ’11


Tokyo Electric Power Co. moved into the black in fiscal 2013 thanks to drastic cost-cutting efforts taken in response to the Fukushima nuclear disaster.

Tepco is restructuring after effectively being put under state control after the March 2011 quake and tsunami triggered core meltdowns at its Fukushima No. 1 power plant. The resulting cleanup, waste management, fuel, compensation and litigation costs are bleeding the utility dry.

On Wednesday, Tepco reported a group net profit of ¥438.65 billion in fiscal 2013 ended March 31, compared with a loss of ¥685.29 billion the previous year. It also posted a group pretax profit of ¥101.42 billion against a loss of ¥326.96 billion in fiscal 2012.

But Tepco’s struggle to get back on track is likely to continue for the foreseeable future as prospects on restarting its gigantic Kashiwazaki-Kariwa nuclear plant in Niigata Prefecture — the world’s largest — remain unclear. The power station is a key element in the utility’s turnaround plan.

Tepco is betting on getting restart clearance by July, according to a revamped turnaround plan approved by the government in January. If clearance doesn’t come, Tepco will be reluctant to resort to another rate hike.

Meanwhile, group sales in fiscal 2013 climbed 11 percent from the previous year to ¥6.63 trillion, supported by rate hikes in 2012 to cope with surging fuel costs for its reversion to thermal power generation to offset the idling of its reactors.

Tepco did not release an earnings outlook for the current fiscal year due to the continuing uncertainty over the Kashiwazaki-Kariwa plant.

All of the nation’s 16 commercial nuclear power plants are offline because their reactors are required to clear new safety requirements introduced after the Fukushima meltdowns. Tepco filed for a state safety assessment of reactors 6 and 7 at Kashiwazaki-Kariwa last September.

Fiscal 2013 saw six out of 10 major utilities post group pretax losses as they continued to face heavy fuel costs for thermal power generation amid the prolonged shutdown of most of their nuclear reactors, according to earnings reports released through Wednesday.

Underscoring their tough situation, Hokkaido Electric Power Co. and Kyushu Electric Power Co. said Wednesday that they plan to bolster their financial standing by having a government-affiliated bank purchase shares that do not carry voting rights.

The combined pretax losses of the six utilities reached about ¥436 billion. Five of them, including Hokkaido and Kyushu, were allowed by the government to raise electricity rates last year, but the move was not enough to offset the rise in fuel costs.

The latest results indicate that utilities may resort to electricity rate hikes again as the prospects for ongoing state safety assessments of many nuclear reactors remain unclear.