Tokyo Electric Power

[Thriftville]

TEPCO didn't book the victim compensation cost in their quarter report. I'm not sure why. Isn't it good to book all the potential losses at one go? then later write back, if the actual expense is lower. That will look better to the investors

The media has estimated that the compensation will be in US$100b, which I think is overblown. And from the report below, I believe TEPCO will only pay about US$1.5b to 3b to the victims.



* JUNE 22, 2011, 3:17 A.M. ET

Tepco Books Additional Y88B Loss For Payments To Nuclear Accident Evacuees

TOKYO (Dow Jones)--Tokyo Electric Power Co. (9501.TO) on Wednesday revised its earnings results, noting that it has now booked additional losses of Y88 billion to cover compensation to evacuees from areas around the Fukushima Daiichi nuclear complex and Y38 billion for extra provisions to bring the crippled plant under control.

The utility reported in May a net loss of Y1.247 trillion for the 12 months ended March. The loss was the biggest annual loss in Japanese corporate history outside the financial sector.

The revision is considered an important subsequent event and will be reflected in the company's annual financial report due later this month.

Tepco said the additional Y88 billion loss would pay for compensation related to psychological distress suffered by the nuclear disaster evacuees. The company raised the provision for bringing the crippled nuclear plant under control by Y38 billion to Y869.7 billion.

-By Hiroyuki Kachi, Dow Jones Newswires; 813-6269-2789; Hiroyuki.Kachi@dowjones.com

[RBM]

Hello Thriftville - good to hear from you.

My two cents on this ........... I would wager that Tepco eventually have to fork out appreciably more than US$ 3 Billion to the victims because of the Fukushima crisis. I say "victims" in the wider sense of the word. Reason I say this is that Tepco will not only have to compensate the families who were evacuated from the vicinity of the Fukushima plant but also fishermen, farmers, business owners and the like. And when the medical cases/claims come along, as they will, thats when the really large payments will become apparent. I can see homeowners claiming for erosion of their personal property value. The list goes on. And, at the very least, this will be a prolonged drag on Tepco Senior Management time for some considerable time to come.

Additionally there are indirectly related costs related to Tepco's other nuclear plant operations and plans. I strongly suspect Tepco will have to make further material investments in existing nuclear plant elsewhere in their region - not to add additional generation capacity but rather to meet revised minimum (i.e. higher) standards set by Japan's Government. There is no alternative - if Tepco decline to make these "asset investments" they'll have to shutdown the plants. And Tepco will have to shelve or substantially defer plans they had for future nuclear plants (more write-offs?).

I haven't seen an estimate yet of the higher borrowing costs that Tepco will incur as a result of the hard hit to their credit rating. Thats a number I'm looking out for. And I suspect some of Tepco's loan agreements have trigger clauses entitling lenders to withdraw or reduce their level if borrowing if Tepco's credit rating drops below a certain level; I'll be monitoring the stance taken by the lenders, particularly those of the non-Japanese variety.

I realise the foregoing sounds funereal. But, IMHO investing in Tepco right now is for the brave. I'm not brave enough to go in now, preferring other Japanese utilities.

[Thriftville]

Hey RBM, great analysis!!

My two cents on this ........... I would wager that Tepco eventually have to fork out appreciably more than US$ 3 Billion to the victims because of the Fukushima crisis. I say "victims" in the wider sense of the word. Reason I say this is that Tepco will not only have to compensate the families who were evacuated from the vicinity of the Fukushima plant but also fishermen, farmers, business owners and the like. And when the medical cases/claims come along, as they will, thats when the really large payments will become apparent. I can see homeowners claiming for erosion of their personal property value. The list goes on. And, at the very least, this will be a prolonged drag on Tepco Senior Management time for some considerable time to come.

You're right that there could be other claims involved. I might be wrong to predict that the compensation will cap at $3b.

Initially when I estimate the compensation cost, I refer to the recent oil spill disasters, where most victims are being paid one-time. BP paid the fishermen a few months worth of income and make them sign a form that forbid them from further suing for any extras.

For relocation, in the past, when Japan had disaster, usually they will build a small town next to the current town. So TEPCO may have to pay for the housing of these people, which could be very costly.

Additionally there are indirectly related costs related to Tepco's other nuclear plant operations and plans. I strongly suspect Tepco will have to make further material investments in existing nuclear plant elsewhere in their region - not to add additional generation capacity but rather to meet revised minimum (i.e. higher) standards set by Japan's Government. There is no alternative - if Tepco decline to make these "asset investments" they'll have to shutdown the plants. And Tepco will have to shelve or substantially defer plans they had for future nuclear plants (more write-offs?).

The Japan gov has made TEPCO to enhance the anti-tsunami system for Kashiwazaki nuclear plant, after the Niigata earthquake in 2007. That caused a huge delay in the restart of the nuclear plants. Until now, only 4 is running. The other 3 are still under upgrade.

TEPCO has booked this cost in their quarter report. It is estimated to cost about US$2b to upgrade and repair the existing plants.

I haven't seen an estimate yet of the higher borrowing costs that Tepco will incur as a result of the hard hit to their credit rating. Thats a number I'm looking out for. And I suspect some of Tepco's loan agreements have trigger clauses entitling lenders to withdraw or reduce their level if borrowing if Tepco's credit rating drops below a certain level; I'll be monitoring the stance taken by the lenders, particularly those of the non-Japanese variety.

I think that's main reason the share price collapse. The gov has hinted the banks to waive the US$20b loan given after the quake. That $20b was meant for TEPCO to renew its expiring bonds.

I'm not so worried about credit rating, because the parliament has approved US$60b fund to the public-private entity for TEPCO to draw money. And since most of TEPCO's potential losses are progressive payment, they should have enough money to tide over the disaster now.
(Excluding the losses, TEPCO is able to generate about US$2b of cash yearly)

I realise the foregoing sounds funereal. But, IMHO investing in Tepco right now is for the brave. I'm not brave enough to go in now, preferring other Japanese utilities.

Yeah, I was considering Chubu Electric the other day. Too bad didn't got the time to read their annual reports. Now it's price already up by 30%, not really worth to take a stake.

[Thriftville]

Tuesday, June 28, 2011
Tepco Shareholders Reject Nuclear Power Pullout

TOKYO (NQN)--Shareholders in Tokyo Electric Power Co. (9501) on Tuesday rejected a proposal submitted by 402 of their number that would have required the company to withdraw from the nuclear power business.

Shareholders instead approved two company proposals, including one on its new leadership, at the utility's annual shareholders' meeting in Tokyo.

The meeting began at 10 a.m. and ended at 4:09 p.m., lasting more than six hours, topping the previous record of 3 hours, 42 minutes set in 1999.

A total of 9,302 people were in attendance at 3:30 p.m., far more than last year's 3,342, the previous record.

Some shareholders expressed unhappiness about the meeting, saying officials refused to answer questions. Dissidents submitted a motion to dismiss Chairman Tsunehisa Katsumata as chair of the meeting, but it was voted down.

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Wednesday, June 29, 2011
Tepco To Pay Compensation By Slashing Assets, Costs: President

TOKYO (Nikkei)--Tokyo Electric Power Co. (9501) will fund the compensation to victims of the accident at its Fukushima Daiichi nuclear plant through far-reaching asset sales and cost cuts, President Toshio Nishizawa told The Nikkei in an interview.

Nishizawa, who took the helm Tuesday, said Tepco intends to position plants fueled by liquefied natural gas as its main source of electricity in its upcoming long-term power supply plan. To provide a stable supply of electricity, it will aim to diversify resources, with a focus on LNG, he said. Nishizawa said nuclear power will make up a smaller percentage of total output as a result of the accident.

Tepco plans to bring facilities onstream ahead of schedule, including LNG-fired equipment with an output capacity of 500,000kw that was slated to begin operations at its Kawasaki facility in February 2013. And it hopes to participate in an Australian project to secure roughly 20% of its annual LNG needs, according to Nishizawa.

"We have a strong determination" to resolve the nuclear crisis, the most pressing issue, he said.

Tepco had been trying to expand its nuclear power business abroad before the accident. But it is "no longer thinking about that except in Vietnam, where there has already been an agreement between governments," Nishizawa said, indicating that Tepco will not pursue nuclear projects in the U.S., Malaysia and elsewhere.

(The Nikkei June 29 morning edition)

[Thriftville]

Link
Japan Has 17,580 Megawatts of Nuclear Capacity Online:
By Yuji Okada - Jun 30, 2011 1:46 PM GMT+0800

Japan, the world’s third-biggest nuclear power generator, had 19 reactors with a capacity of 17,580 megawatts, or 36 percent of the total, online today, according to data compiled by Bloomberg News.

The following is a table of 54 nuclear plants operated by Japanese power companies.

UNIT LOCATION
MW STATUS OPERATION START REACTOR
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----------------------------------------------------------------
Hokkaido Electric Power Co.
Tomari, Hokkaido
No. 1 579 Shutdown 1989 June PWR
No. 2 579 Running 1991 April PWR
No. 3 912 Running 2009 Dec. PWR

Tohoku Electric Power Co.
Onagawa, Miyagi
No. 1 524 Shutdown 1984 June BWR
No. 2 825 Shutdown 1995 July BWR
No. 3 825 Shutdown 2002 Jan. BWR
Higashidori, Aomori
No. 1 1,100 Shutdown 2005 Dec. BWR

Tokyo Electric Power Co.
Fukushima Dai-Ichi, Fukushima
No. 1 460 Shutdown 1971 March BWR
No. 2 784 Shutdown 1974 July BWR
No. 3 784 Shutdown 1976 March BWR
No. 4 784 Shutdown 1978 Oct. BWR
No. 5 784 Shutdown 1978 April BWR
No. 6 1,100 Shutdown 1979 Oct. BWR
Fukushima Dai-Ni, Fukushima
No. 1 1,100 Shutdown 1982 April BWR
No. 2 1,100 Shutdown 1984 Feb. BWR
No. 3 1,100 Shutdown 1985 June BWR
No. 4 1,100 Shutdown 1987 Aug. BWR
Kashiwazaki Kariwa, Niigata
No. 1 1,100 Running 1985 Sept. BWR
No. 2 1,100 Shutdown 1990 Sept. BWR
No. 3 1,100 Shutdown 1993 Aug. BWR
No. 4 1,100 Shutdown 1994 Aug. BWR
No. 5 1,100 Running 1990 April BWR
No. 6 1,356 Running 1996 Nov. BWR
No. 7 1,356 Running 1997 July BWR

Chubu Electric Power Co.
Hamaoka, Shizuoka
No. 3 1,100 Shutdown 1987 Aug. BWR
No. 4 1,137 Shutdown 1993 Sept. BWR
No. 5 1,380 Shutdown 2005 Jan. BWR

Hokuriku Electric Power Co.
Shika, Ishikawa
No. 1 540 Shutdown 1993 July BWR
No. 2 1,206 Shutdown 2006 March BWR

Kansai Electric Power Co.
Mihama, Fukui
No. 1 340 Shutdown 1970 Nov. PWR
No. 2 500 Running 1972 July PWR
No. 3 826 Shutdown 1976 Dec. PWR
Ohi, Fukui
No. 1 1,175 Running 1979 March PWR
No. 2 1,175 Running 1979 Dec. PWR
No. 3 1,180 Shutdown 1991 Dec. PWR
No. 4 1,180 Running 1993 Feb. PWR
Takahama, Fukui
No. 1 826 Shutdown 1974 Nov. PWR
No. 2 826 Running 1975 Nov. PWR
No. 3 870 Running 1985 Jan. PWR
No. 4 870 Running 1985 June PWR

Chugoku Electric Power Co.
Shimane, Shimane
No. 1 460 Shutdown 1974 March BWR
No. 2 820 Running 1989 Feb. BWR

Shikoku Electric Power Co.
Ikata, Ehime
No. 1 566 Running 1977 Sept. PWR
No. 2 566 Running 1982 March PWR
No. 3 890 Shutd
own 1994 Dec PWR

Kyushu Electric Power Co.
Genkai, Saga
No. 1 559 Running 1975 Oct. PWR
No. 2 559 Shutdown 1980 March PWR
No. 3 1,180 Shutdown 1994 March PWR
No. 4 1,180 Running 1999 July PWR
Sendai, Kagoshima
No. 1 890 Shutdown 1984 July PWR
No. 2 890 Running 1985 Nov. PWR

Japan Atomic Power Co.
Tsuruga, Fukui
No. 1 357 Shutdown 1970 March BWR
No. 2 1,160 Shutdown 1987 Feb. PWR
Tokai Dai-Ni, Ibaraki
No. 1 1,100 Shutdown 1978 Nov. BWR
-----------------------------------------------------------

[RBM]

Below is an article taken from today's Financial Times - I have provided the link as well. If correct, this is indicative of how the wider nuclear power issue will likely become a political football in Japan.

It is also telling that a partial nationalisation and fragmentation of Tepco is hinted at - but the focus of such nationalisation would appear to be Tepco's "toxic" nuclear arm. Personally speaking, I doubt a nationalisation of Tepco, even a partial one, will occur, so long as Tepco avoids any further crises.

As Thriftville has mentioned in an earlier message in this thread, what the referenced PM contendor is suggesting poses an inherent threat to companies such as Toshiba, Hitachi and MHI, who have made significant domestic and overseas earnings in decades gone by from their nuclear expertise.

++++++++++++++++++++
Use this link - http://www.ft.com/cms/s/0/caa106b6-a581-...z1R7kQdihA

Japan PM contender says ditch nuclear

By Mure Dickie and Tom O’Sullivan in Tokyo

A leading contender to replace Naoto Kan as Japan’s prime minister has called for the country to phase out nuclear power over the next two decades. Seiji Maehara, one of the most popular figures in the ruling Democratic party, told the Financial Times in an interview that construction of new nuclear reactors should “basically be stopped” following the crisis at the tsunami-crippled Fukushima Daiichi atomic plant.

Mr Maehara’s comments – seen as a strong candidate to succeed Mr Kan – will fuel expectations that the nuclear crisis will prompt sweeping changes in Japan’s energy policy. The Mainichi newspaper reported that Yoshito Sengoku, chief cabinet secretary, was backing a confidential plan to separate the electricity generation and distribution arms of Tokyo Electric Power, Fukushima’s operator, and nationalise its nuclear assets.

The nuclear crisis that erupted after Japan was hit by a magnitude 9 earthquake and tsunami in March has fuelled anti-nuclear sentiment around the world. The German parliament on Thursday voted to close all of the country’s nuclear power plants by 2022. A Japanese retreat from atomic power would have far-reaching implications for domestic utilities and companies such as Toshiba, Hitachi and Mitsubishi Heavy Industries, which are seeking to sell nuclear technology overseas. “There is a need for a revolutionary shift in how electricity is generated and used,” said Mr Maehara, who served as transport minister and as foreign minister before stepping down from the cabinet in March over a minor funding scandal.

While Mr Kan has pledged to make renewable energy and conservation pillars of national energy policy alongside fossil fuels and nuclear power, he has been vague about the prospects for new reactors planned or under construction.

Opinion polls suggest a majority of voters support a gradual reduction in the use of atomic energy. Mr Maehara said Japan should aim to phase out nuclear power completely. “That is what is going to happen and ... what should happen, but given that we depend on nuclear power for 30 per cent of electricity generation, we can’t get rid of it right away,” he said. “While increasing the safety of nuclear power, we need to use preferential policies to reduce our dependence on it over 10 or 20 years.”

Mr Maehara’s relative popularity and status as a former leader of the DPJ mean his call for a nuclear phase-out could put the issue at the centre of any party election to replace Mr Kan. The DPJ and the former ruling Liberal Democratic party, the biggest opposition group, remain officially pro-nuclear despite the Fukushima Daiichi crisis, but both parties have long contained members who are against the use of atomic energy on safety or environmental grounds. Speculation has been growing in recent weeks that the scale of the crisis will make nuclear policy a key battleground.

Mr Maehara's status as a possible successor to Mr Kan has been boosted by recent opinion polls. One survey by the Nikkei Shimbun suggested one-fifth of voters thought him the most suitable person to become DPJ leader and thus premier. However, Mr Maehara said he was being "extremely cautious" about the possibility of replacing Mr Kan given his recent resignation over revelations that he received Y250,000 ($3,100) in political donations from a long-time Korean resident.Japanese politicians are barred from taking funds from foreigners. Mr Maehara has said he was unaware of the donations, and the scandal is seen by analysts as a relatively minor affair.

Mr Maehara told the FT he had made an "accounting mistake". He said staying in office might have complicated passage of important legislation, including a bill allowing continued financial support for US military bases in Japan.

The former transport minister also took aim at a troubled “fast-breeder" atomic power station, which he said was “very expensive". The Monju prototype fast-breeder reactor in western Fukui Prefecture, was shut down in 1995 following a coolant leak. The 280MW plant, which burns plutonium refined from the spent fuel of conventional reactors, was restarted last year but soon suffered a new setback when a 3.3 tonne piece of equipment fell into its reactor, taking months to remove."In my opinion we should abandon it," Mr Maehara said.

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[Thriftville]

July 4, 2011, 9:54 p.m. EDT
Tepco to pay extra compensation to evacuees

By Hiroyuki Kachi

TOKYO (MarketWatch) -- Tokyo Electric Power Co. (9501.TO) said Tuesday that it will pay estimated additional compensation of up to Y48 billion, or Y100,000-Y300,000 per nuclear accident evacuee.

The compensation was the second round of compensation payments to nuclear accident evacuees. The company, also known as Tepco, said it will disclose the impact of the extra compensation on its earnings as soon as details become clear.

In terms of compensation payments, Tepco has already provided about 50,000 households within a 30-kilometer radius of the stricken plant with payments of up to Y1 million each, which would cost the company a total of around Y50 billion.

The utility reported in May a net loss of Y1.247 trillion for the 12 months ended March. The loss was the biggest annual loss in Japanese corporate history outside the financial sector.

[Thriftville]

Good news for TEPCO, as the reopen of coal power plant will reduce the dependence on expensive fuel like crude.

Tokyo Electric restarts third unit at quake-hit plant

TOKYO, July 12 | Mon Jul 11, 2011 11:18pm EDT

TOKYO, July 12 (Reuters) - Tokyo Electric Power Co said it resumed generating electricity from the oil-fired 600 megawatt No.2 unit at its Hirono plant in northern Japan on Monday evening for the first time since the facility was rocked by a magnitude 9.0 earthquake on March 11.

The unit is the third of five units to be restarted after the quake, after the restart of the No.1 and No.5 units. The company plans to resume full output from the 3,800-MW plant by restarting the remaining two units by the end of July. (Reporting by Osamu Tsukimori; Editing by Chris Gallagher)

[Thriftville]

Great teamwork!

Thursday, July 14, 2011
Utilities OK With Sharing Nuke Compensation Burden

TOKYO (Nikkei)--Power utilities are ready to help pay compensation to those affected by Tokyo Electric Power Co.'s (9501) nuclear emergency, the head of an industry group said Wednesday.

The shared burden "would be part of a mutual structure of support to prepare for possible accidents in the future," Makoto Yagi, chairman of the Federation of Electric Power Companies of Japan, told a lower house special committee on rebuilding from the March 11 disaster.

"It will help facilitate compensation and lead to a stable power supply, so we understand (the shared burden) to be reasonable," he said, indicating the industry's willingness to cooperate.

The committee invited Yagi, who is also president of Kansai Electric Power Co. (9503), to the hearing as part of discussions on nuclear compensation legislation that began in earnest Monday.

The opposition Liberal Democratic Party and New Komeito are pressing to keep funds contributed by utilities other than Tepco out of compensation related to that firm's tsunami-hit Fukushima Daiichi nuclear power plant. They also want funds for other future crises to be managed separately from the money for Tepco's compensation.

But Yagi told the committee that the utilities would not make special requests to have their contributions kept separate.

Managing the funds separately for compensation and other purposes "would not be desirable," he said.

Power companies appear to be concerned that if the legislation stalls and the outlook for Tepco's operations grows uncertain, the environment for corporate bond issuances could deteriorate.

[karlmarx]

more good news for tepco shareholders.

TEPCO shares close up 15.9% in Tokyo trade - AFP

On Thursday 21 July 2011, 15:02

Shares in Tokyo Electric Power Co. jumped 15.9 percent in Tokyo Thursday on reports of political progress over the utility's compensation for victims of the nuclear crisis caused by the March 11 quake.

TEPCO shares closed up 81 yen at 590 yen after the Nikkei business daily said ruling and opposition parties had agreed the government will provisionally pay more than half of the compensation costs.

The ruling Democratic Party of Japan accepted a proposal from the main opposition Liberal Democratic Party and its partner New Komeito, it said.

The ruling party was initially reluctant to accept the proposal, but agreed to compromise to secure other concessions from the opposition bloc, which controls the upper house, according to reports.

TEPCO's surge compared with the moderate rise of the Nikkei index, which edged up just 0.04 percent, or 4.49 points, to 10,010.39.

The Topix index of all first section shares at the Tokyo Stock Exchange fell 0.06 percent, or 0.55 points, to 860.11.

TEPCO was also lifted by bullish sentiments towards the firm's plan to bring its stricken Fukushima Daiichi reactors to a cold shutdown by January, market participants said.

Heavy short-covering also supported the shares, they added.

But the company's future remained very much in doubt, analysts said, adding that its shares stay firmly in the realm of day-to-day speculators.