Changing Tepco from the inside

The government on April 19 picked Mr. Kazuhiko Shimokobe, a bankruptcy lawyer with vast experience in corporate restructuring, as chairman of Tokyo Electric Power Co. He headed the decision-making body of the Nuclear Damage Liability Facilitation Fund, a public entity that injects funds into Tepco to help it pay compensation to victims of the accident at Tepco’s Fukushima No. 1 nuclear power plant.

So far, Mr. Shimokobe has been in a position to make demands on Tepco concerning its management from outside. As chairman of Tepco, he may find himself in a more delicate position.

It is hoped that Mr. Shimokobe will break Tepco’s bureaucratic mind-set and culture, often said to be more strongly embedded in this publicly-traded firm than the government bureaucracy itself, and make Tepco more sensitive to the sentiments of the general population and its customers.

In late December, Tepco President Toshio Nishizawa caused a public furor when he said Tepco had the right to raise electricity fees. It was sheer arrogance on the part of Tepco. Mr. Shimokobe must end Tepco’s tendency to look down on consumers.

As the leading executive at Tepco, he has three major tasks to tackle: ending the Fukushima nuclear crisis in the true sense of the word, making sure the victims of this nuclear fiasco are adequately compensated and stabilizing the electricity supply.

An increasing number of sufferers are complaining about the compensation standards set by Tepco. Mr. Shimokobe needs to pay special attention to their feelings and refrain from just mechanically applying rules when addressing their claims. He must spur the utility to take the individual plights of the sufferers into consideration.

Tepco’s plan to raise electricity fees for businesses from April met strong resistance in the business community because it failed to divulge that current rates will continue until contracts are renewed or because it failed to give convincing reasons for raising fees. As Tepco plans to raise power fees for households in the near future, gaining users’ trust will be a difficult task for Mr. Shimokobe.

Banks are making the restart of the Kashiwazaki-Kariwa nuclear power plant in Niigata Prefecture a precondition for extending loans to Tepco. It would be irresponsible of the government to let Tepco go ahead with the restart in view of the severity of the Fukushima nuclear plant fiasco and in the absence of a long-term government plan to phase out nuclear power.