TEPCO to sell electricity across Japan under new brand name to boost profits
Tokyo Electric Power Co. (TEPCO), the operator of the crippled Fukushima No. 1 Nuclear Power Plant, plans to create a new brand name under which the utility will sell electricity in regions outside its own service area across the country as part of efforts to boost its earnings, it has been learned.
In its Comprehensive Special Business Plan, TEPCO regarded a project to retail electricity in service areas of other utility firms as a pillar of its measures to boost its earnings. TEPCO made the decision apparently because the beleaguered utility thought that clients could accept the service more easily if it were provided under a brand name other than TEPCO, whose image was badly tarnished by the 2011 nuclear crisis. TEPCO will organize an in-house structure and start the new business operation after deciding a new brand name in fiscal 2014.
In its new reorganization plan, TEPCO stated about its project to retail electricity across the country, "We will secure a certain share nationwide." At the outset, TEPCO will purchase electricity from factories and other facilities equipped with in-house power generators outside its service area to secure sufficient power supply before starting activities to sell electricity under a new brand name to large-lot users such as corporate enterprises by the end of fiscal 2014.
The utility will also consider building new thermal power stations outside its service area. It will make sales proposals for households, including a plan for households to buy power at lower prices if they purchase gas and electricity in one package. One of the main reasons why TEPCO is rushing to enter into the business of selling electricity throughout the country is that unless it boosts its earnings by increasing the number of its clients, it will not be able to secure enough funds to cover the costs of dealing with the Fukushima nuclear accident, nor will it be able to rebuild itself.
Nonetheless, as long as TEPCO maintains utility rates that are the second highest among major power companies in the country, it is not very competitive and will struggle to be accepted by clients. Efforts to realize the plan to sell electricity throughout the country is likely to be affected by whether TEPCO's Kashiwazaki-Kariwa Nuclear Power Plant in Niigata Prefecture will be reactivated as operation of the facility will help vastly reduce the utility's costs to generate power.
January 09, 2014(Mainichi Japan)