The Tokyo government approved today a public bailout of 1 trillion yen (approx. $12.5 billion) for Tokyo Electric Power Co. (TEPCO), the utility company responsible for running the Fukushima nuclear plant. This will give the Japanese government a majority holding of the company, and put it under their control for the time being. Part of this negotiation has seen the replacement of previous leaders and management in the company, including the recent promotion of Naomi Hirose to president, and the naming of Kazuhiko Shimokobe as chairman.
Under these new leaders, TEPCO’s three primary goals will be to continue making compensation payments to post-disaster victims, disabling the damaged reactors, and attempting to provide a stable supply of electricity to areas such as Tokyo. Yukio Edano, Minister of Economy and Trade, commented that he hopes with these actions, and those to come, that TEPCO can earn the trust of the public again. The utility company needs to face its criticism and admit its responsibility in the mishandling of the meltdown disaster last March.
The restructuring plans are to take place over the next 10 years. TEPCO will be need to cut costs by 3.3 trillion yen ($41 billion) by the year 2021. This will require a 10% increase in household electricity rates, as well as for corporate customers. The bailout gives the government over 50% of voting rights in the utility, along with options to increase that to more than two-thirds control. This also gives them the ability to implement further reforms in the future, should it become necessary. As TEPCO serves as the only provider of electricity to Tokyo, the government’s investment was crucial to prevent the company from certain collapse.