Japan's industry ministry calls on Tepco to seek partnerships
Consortium recommended to handle spiraling costs in Fukushima
TOKYO -- A panel of experts within Japan's industry ministry on Tuesday made a proposal urging Tokyo Electric Power Co. Holdings to pursue partnerships and consolidation with peers on nuclear power and grid operations.
Tepco will begin soliciting partners as early as the start of 2017.
The proposal was released at a meeting by the Ministry of Economy, Trade and Industry's panel on reform of Tepco and issues related to the crippled Fukushima Daiichi nuclear power plant. The panel was established in October.
Total costs of dealing with the 2011 Fukushima nuclear disaster are projected to reach 21.5 trillion yen ($182 billion), double the original estimate of 11 trillion yen, according to the ministry's recent calculations. Tepco, which is effectively owned by the government, will shoulder 15.9 trillion yen of that cost.
The proposal aims to increase the utility's revenues in an effort to avoid passing ballooning costs to the public as much as possible. It focused on bolstering the company's revenue base while also enlisting cooperation from other companies, including major electric companies.
"The efforts to streamline management and increase revenue will serve to establish a stronger electric industry," Economy, Trade and Industry Minister Hiroshige Seko said at the meeting.
Regarding the nuclear power as well as electricity transmission and distribution businesses that Tepco operates, the proposal said the company should "aim to reorganize and integrate [them] by establishing a consortium as early as possible."
Tepco plans to form a power grid consortium in the early 2020s. The utility will seek partners and hold negotiations with them in a similar manner to when it set up a 50-50 thermal power joint venture, known as Jera, with Chubu Electric Power.
Tepco will include the proposal in its turnaround plan to be formulated by next spring.