Monday, February 13, 2012
TOKYO (Dow Jones)–Japanese trade and industry minister Yukio Edano on Monday approved the release of Y690 billion in additional financial aid to Tokyo Electric Power Co. (9501) to help it meet massive compensation claims from people affected by the Fukushima Daiichi nuclear disaster.
The approval was made on condition that Tepco will meet several requirements, said Edano, including a review of the planned rate hike for corporate users, set to take effect in April, and ceding to the government “sufficient” control over the company’s management.
“I have no plan to approve a request from Tepco for a capital infusion unless the company agrees to allow sufficient voting rights that would be in line with the amount of government investment in the company,” Edano said in a meeting with Tepco president Toshio Nishizawa.
Edano demanded that Nishizawa promise to revise the planned 17% rate hike for corporate users once the government completes a review of electricity rates later this year.
Edano also said he wants “more aggressive cost-cutting by Tepco and accelerated asset sales.”
Nishizawa promised to redouble cost-cutting efforts and introduce a more flexible rate plan, but stopped short of making any commitment regarding the size of government ownership in Tepco in the event of capital injection.
The latest aid commitment brings the total amount of financial aid to the utility to Y1.58 trillion, including Y890 billion in assistance approved in November. The aid will be provided separately from an expected capital injection of Y1 trillion to help the company deal with other costs, such as those for decommissioning the Fukushima Daiichi plant and building new thermal power plants.
The additional aid was decided after compensation eligibility was expanded in December to include 1.5 million people who voluntarily evacuated their homes in Fukushima Prefecture, in addition to 110,000 forced to leave under mandatory evacuation orders.
The aid will allow Tepco to maintain a sufficient capital cushion and report April-December earnings results later Monday.