nuclear-news

TEPCO nuclear company near financial disaster, even with government bailout

TEPCO teetering on financial edge, Chiaki Toyoda and Tadaaki Inoue / Yomiuri Shimbun Staff Writers, 11 Aug 11The harsh business environment facing Tokyo Electric Power Co. has been brought to the fore after the utility posted a record quarterly group net loss, logging a 571.7 billion yen deficit for the April-June period due to the crisis at its Fukushima No. 1nuclear power plant.

TEPCO will receive financial support from a new organization to be set up later this month by the government, which will be tasked with securing funds for the utility to pay compensation to people affected by radiation from the crippled plant.

Yet the utility’s business operations will be precarious, with fuel costs and expenses involved in decommissioning the plant’s reactors sure to hang heavy on the company.

The massive loss came as TEPCO allocated 397.7 billion yen for compensation–a figure the utility described as a reasonable estimate–as part of a 503.2 billion yen extraordinary loss in the April-June period…..

Had the creation of the new organization not been confirmed, TEPCO’s net worth might have gone into the red.

Hiroki Shibata, an analyst at ratings agency Standard and Poor’s, said TEPCO’s financial strength has been deteriorating markedly and its profits are likely to continue on a downward trajectory…….

By asking for the new organization’s support, TEPCO will effectively go under public administration, with its management independence greatly restricted.

Also likely to affect the management of TEPCO is the future development of the central government energy policy–which might include the suspension of nuclear power generation for a protracted period–and discussions on separating the businesses of power generation and power transmission…http://www.yomiuri.co.jp/dy/business/T110810005340.htm

August 11, 2011 - Posted by Christina Macpherson | business and costs, Japan