Wednesday, May 9, 2012

Government to (Effectively) Take Over TEPCO in July

It looks like it will be Yukio Edano, Minister of Economy, Trade and Industry, who will run the show. He is the same one who, as Chief Cabinet Secretary, was a very popular and reassuring figure in the early days of the nuclear crisis last year with his remarks that the radiation "have no immediate effect on health".

It is not "nationalization" but "effective" one. I'm yet to find the precise definition of "effective nationalization" in Japan, but if it is the same as "effective nationalization" of AIG in the US, it has to do with the percentage of shares that the government will control - enough to run the company but not enough to combine the balance sheet.

A short article from Sankei Shinbun (5/9/2012) has some telling bits of information:

東電、7月にも国有化 政府が総合計画認定
TEPCO to be nationalized in July, as the national government approves the overall business plan

枝野幸男経済産業相は9日、東京電力の実質国有化を柱とする総合特別事業計画を認定した。対象期間は2021年度までの10年間とし、3兆3650億円超の経費を減らす一方、家庭向け電気料金の10%値上げと柏崎刈羽原発(新潟県)の13年度の再稼働を明示した。政府は7月にも公的資金1兆円を資本注入し、議決権割合の過半を握ることで東電を実質国有化。社外取締役を増やして経営への監視を強める。

Yukio Edano, Minister of Economy, Trade and Industry, approved the overall special business plan on May 9. The plan centers around the effective nationalization of TEPCO. The period that the business plan covers is 10 years until the fiscal 2021. The plan calls for 3.365 trillion yen reduction of expenses, 10% raise in utility fees for the household, and restart of Kashiwazaki-Kariwa Nuclear Power Plant (in Niigata Prefecture) in the fiscal 2013. The national government will do the capital injection of 1 trillion yen using public money, and hold the majority of voting right, effectively nationalizing TEPCO. It will also increase the number of outside directors to tightly monitor the management of the company.

 燃料・火力部門、送配電部門、小売部門を社内分社化し、さらに持ち株会社制へ移行する方向性も示した。政府は東電を舞台に電力改革やエネルギー政策の見直しを具体化させていく。

The current divisions, such as Fuel and Thermal, Power Transmission System, and Retails, will be set up as separate branches within the company, with an eye on turning them into holding companies. Using TEPCO as a platform, the national government will put into effect its electric power reforms and energy policy revisions.


A power grab by a government who is even less transparent than TEPCO when it comes to disclosing the information about the nuclear accident or the radiation contamination.

Needless to say, there is no plan B if Kashiwazaki-Kariwa doesn't restart. The cut of 3 trillion yen over 10 years doesn't seem much at all, when the cost to decommission is estimated to be tens of trillions of yen.

The 107-page business plan, which says hardly anything of note, is with the 140-page supplement which says more. The compensation to the victims of the nuclear disaster is calculated by a Tokyo University professor with macro economics in mind (whatever that means), and the plan hinges on the assumption that the government/TEPCO can cut back on the compensation to people who will be returning to their homes in the areas with less than 20 millisieverts per year annual radiation (external only) exposure.

So much for the new president of TEPCO pledging to do his best to compensate the victims.

For now the business plan and its attachments are in Japanese only. TEPCO promises it will post them in English as soon as they become available, here.

6 comments:

ToB said...

They say that people show their true colours under bad circumstances. Unfortunately the same goes for governments. If this mess had happened in another country, some things might have been done differently; but I do not think that any other government in the world would be much better in being truthful and forthcoming. You can see this in the relative silence of Canadian and American authorities with regard to Fukushima fallout. Their first instinct is to sweep it under the rug. This nightmare is a lesson for all people about how authorities think (and should not). And meanwhile, you can bet countries and corporations around the world are looking at the media treatment of Fukushima and taking notes. It is a lesson for them on how much they can get away with, while the world says almost nothing. Thank heavens we have the Internet now or we would be utterly in the dark.

netudiant said...

TEPCO has been under the control of the Japanese government since the accident. The firm was bankrupted by the costs. However, it is convenient for the government to keep the TEPCO entity alive, to maintain plausible deniability when things go wrong.
It is interesting that the restart of the
Kashiwazaki-Kariwa facility is highlighted. Japan can afford to import the fossil fuel it needs, but the price is high, too high apparently for the Japanese government.
Logically, one would expect the Noda administration to reach out to some senior figure in the 'nuclear village' to build a new concensus, 'safe nuclear power' for Japan, rather than as before, 'profitable nuclear power' for TEPCO and its peers.
Whether that is a feasible goal remains to be seen.

Anonymous said...

As with most actions by this government, this move to remove TEPCO from decision making is long overdue. Although my confidence in the DPJ-led government is low, my confidence in TEPCO's ability and willingness to clean up and stabilize SFP4 is zero. So, this move is an improvement.

However to get compensation, litigation will be needed. I don't see the government making anyone whole for their losses (if they are even possible to calculate). People must use the courts, if for no other reason than to make the government and TEPCO accountable. It will take a long time to get too little money, but they cannot be allowed to ignore the true amount of damage and suffering they have caused.

As for restarting the nuclear power plants, that would be incredibly irresponsible, and I hope the public will force the authorities to swear off nuclear power before that happens. However, recall that it took two nuclear bombs to end WWII (which Japan leaders knew they would lose after they lost Iwo Jima). Perhaps it will take two or more Fukushimas to end nuclear power in Japan.

Anonymous said...

That is what happens when things go wrong. The nuclear industry disappears and the people are left to clean up.

It's a bailout for TEPCO funded by tax payers.

arevamirpal::laprimavera said...

@netudiant, "plausible deniability" - exactly. Good to see you back.

People like Nakasone and Shoriki (owner of Yomiuri) saw those two atomic bombs and they wanted them so badly themselves. So they got the nuke plants in, right after the Bikini Atoll incident and huge anti-nuke popular movement. I don't know if anything deters those who want it from getting it, couple of Fukushimas or not.

I don't have any confidence in this particular government, much less than in TEPCO. This so-called business plan was nominally submitted by TEPCO but was effectively written by the government and bureaucrats. Restart of Kashiwazaki-Kariwa is what the government wants, and that's what they will do no matter what. TEPCO's new president speaks literally the same language as the elite career bureaucrats.

Anonymous said...

Japan is a country divorced from reality with a bunch of deluded nut jobs with their useless degrees from oh so wonderful Tokyo University so the chances of those nuke plants staying shutdown are nil...

This time next year Japan will be embracing nuclear again, the media will also do a good job of whipping people into line.. easily done anyway as the Japanese are so susceptible to brainwashing..

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