Tokyo Electric Power, TODEN or TEPCO is a Japanese electric utility company with headquarters in Chiyoda, Tokyo, Japan.
Image: company website
Its service area is 10.6% of the total area under the Japanese Electric Power Industry but has 34.3% of customers and 31.2% of electricity sales. It has the largest electric utility company in Japan.
Its power generation consists primarily of the following:
• Nuclear reactors in Fukushima and Niigata Perfecture - The Fukushima Daiichi Nuclear Power Plant being one. They are used to supply base load.
• Fossil fuel power plants in Tokyo Bay area. These are used to supply peak load.
Apart from the above, it also purchases electricity from other Japanese power companies.
TEPCO was one of the 9 electric companies established in 1951 marking the end of state-run electricity industry. The primary objective was to supplement the recovery and resurgence of Japan post WW II, which was served well by TEPCO through its energy generation, transmission and distribution system.
Natural forces have proved to be costly for TEPCO. The 2007 earthquake in Japan, forced TEPCO to shut down the Kashiwazaki-Kariwa Nuclear Power Plant, resulting in the first ever loss booking in 28 years. 4 years later, the 2011 earthquake badly damaged the Fukushima Daiichi power plant – owned and operated by TEPCO. This incident resulted in serious socio-political and economic backlashes, with JP Morgan stating that TEPCO can face losses to the tune of $24 billion. Even though TEPCO received $12 billion from the Japanese government, it’s still in the red.
To overcome the weak business scenario for TEPCO, it will transition to a Holding Company system with 3 subsidiaries in April 2016:
• Fuel & Thermal Power Generation Business Co: Based on strategic alliance with Chubu Electric Power Co, this subsidiary will strive to improve the supply chain from upstream to downstream operations.
• General Power Transmission and Distribution Business Company: It will maintain and improve the transmission and distribution network, co-ordination with other electric power business companies and optimize operations.
• Retail Electricity Business Company: It is responsible for the products and services given to Japanese retail customers.