Black TEPCO

Tokyo Electric Power Company announced that its midterm earnings for the half-year ending September 2013 turned into the black for the first time these three years. Although the company explained the reason to be the rise of power rates in September 2012, it was not correct. The true reason is because the government has been paying for TEPCO’s compensation for evacuees from the area around exploded First Fukushima Nuclear Power Plant. Black TEPCO is nothing but a black joke.

According to the announcement, TEPCO marked ¥142 billions of current account surplus, while it suffered from ¥166 billions of deficit one year ago. The surplus of sales of electricity to houses were ¥177 billions due to raising the rates. The company also emphasized its efforts to reduce spending for human resources, postponing asset investment and delay of maintenance of devices. Some other power companies got into black as well. Believe or not, it is allowed for an electric power company to add necessary cost on power rates by law in Japan.

What happens when TEPCO turns into black? It will be able to borrow additional money for its survival from the banks, because black in balance is a main condition for additional rending. The company looks hopeful for that next spring. On the other hand, there will be the greater argument for no nukes Japan than ever, because the company can maintain its balance without nuclear power generation. By the way, main reason of anti-nuclear power still remains to be the huge cost of nuclear generation.

Despite billions of the surplus, TEPCO already counted on special deficit of ¥3 trillions for compensation for the sufferers of Fukushima accident. But the deficit was offset by government’s support through the scheme for crisis management. TEPCO is also responsible for cleaning up the contaminated land and dismantling broken nuclear power plant. The cost for those is still not countable. It is one of the biggest mysteries in current Japan that this business enterprise with such an astronomically huge potential deficit still keeps on operating.

Discussion on how the structure of the company should be is ongoing among the lawmakers. Separating good and bad TEPCO, establishing new company only for dismantling the broken plant and bankruptcy are considered as possible options. TEPCO wants to maintain its body for both power supply and dismantling. “TEPCO knows the best about First Fukushima,” told the President, Naomi Hirose. Well, if you guys had known well about it, why did that huge disaster occur? It must not forget that the Independent Investigation Commission of the National Diet concluded the accident to be manmade.