Tokyo Electric Power Co (Tepco) , owner of the stricken Fukushima Daiichi nuclear plant, submitted a turnaround plan to the Japanese government on Friday as it battles to recover from last year’s devastating earthquake and tsunami.
Tepco, which provides power to about 45 million people in the Tokyo region, is saddled with trillions of yen (tens of billions of dollars) in compensation and clean-up costs after last year’s disaster which triggered radiation leaks at the Fukushima plant.
“I want Tokyo Electric - the management, the employees on site and all everyone else - to take to heart that without reform there will absolutely be no recovery of public trust,” said Kazuhiko Shimokobe, a key member at the government-backed bailout body who was recently named as the next Tepco chairman.
Shimokobe, who spoke to reporters after meeting with Tepco management, declined to comment on the details of the plan, saying he will explain it once approval has been received from the Trade Minister Yukio Edano, who holds the energy portfolio.
Sources have said the plan is likely to say the government will take a majority stake in Tepco in exchange for about 1 trillion yen ($12.4 billion) in taxpayers’ money.
Under the plan, submitted a month later than planned due to a delay in finding the new chairman, Tepco will aim to restart nuclear reactors at its Kashiwazaki Kariwa plant in the business year starting April 2013 and raise household electricity rates by 10 percent, sources have told Reuters.
Such measures are considered key steps to make the utility profitable again.
Implementing the measures however may be difficult because local governments including the host of the Kashiwazaki Kariwa plant are voicing concerns over reactor safety after the Fukushima disaster. Tepco also needs to win government approval to raise household power rates.
“I recognize that the hurdle is very high,” Shimokobe said. “But given Tepco’s financial situation and in order to fulfill its key responsibility to provide stable supplies of electricity, at some point we will have to work on a rate hike.”
For Tepco to stay afloat, Edano must approve the plan by May 14, the deadline for the utility to announce its earnings results for the financial year ended March 31.
