April 29, 2022
Tokyo Electric Power Co.’s dismal financial results have compounded the difficulties facing the company in compensating victims of the Fukushima nuclear disaster and covering the cleanup and decommissioning costs.
The parent company, Tokyo Electric Power Co. Holdings Inc., on April 28 announced that net profit for the fiscal year that ended in March plummeted by 96.9 percent over the previous year to 5.6 billion yen ($43 million).
“With fuel prices continuing to surge, the business environment surrounding our company is not a very optimistic one,” Tomoaki Kobayakawa, the company president, said at the news conference to announce the business results.
He said the company would begin work to revise its corporate structure, including reorganizing group companies and heightening cooperative efforts with other companies.
Despite the dwindling profits, TEPCO must still carry out various tasks to clean up the mess made by the 2011 triple meltdown at its Fukushima No. 1 nuclear power plant.
In 2016, the government calculated that the total cost of compensating people displaced by the disaster, decommissioning reactors at the plant and conducting radiation decontamination work would come to a staggering 21.5 trillion yen.
TEPCO is expected to contribute about 16 trillion yen of that total.
About 10 trillion yen has already been spent for compensation and to remove radiation. Much of that total has been paid for by the government on condition that TEPCO reimburses it later.
Under the plan to rebuild TEPCO, the utility must also set aside about 500 billion yen a year to pay for decommissioning work.
But the last time TEPCO was able to reach that monetary goal was in fiscal 2017. For the past three years, it has only managed to set aside about 300 billion yen annually.
The company had also set a goal of 450 billion yen in net profit by 2030.
But as Yoshimitsu Kobayashi, the company chairman, admitted, “If nothing is done, profits will increasingly shrink and we will be unable to fulfill our responsibility regarding Fukushima.”
Retail sales of electric power used to be TEPCO’s strong point. But as of the end of 2021, newly created electric power companies accounted for 30.4 percent of the electricity sold in the area normally covered by TEPCO.
That is the largest ratio of any of the major electric power companies in Japan.
As a result, TEPCO Energy Partner Inc., which handles retail sales, recorded a loss of 66.4 billion yen for the fiscal year that ended in March.
TEPCO has also failed to capitalize on renewable energy, which had been considered a growth sector.
The government in December 2021 picked a group led by trading company Mitsubishi Corp. instead of TEPCO to handle offshore wind power facilities in Chiba and Akita prefectures.
And there is no sign of when TEPCO’s Kashiwazaki-Kariwa nuclear power plant in Niigata Prefecture can resume operations.