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ECONOMY > Energy

TEPCO to halve branches, reassign thousands

  • December 4, 2017
  • , The Japan News , 8:27 p.m.
  • English Press

The Yomiuri Shimbun


Tokyo Electric Power Company Holdings, Inc. plans to halve its 45 branches through mergers and closures, and transfer several thousand of its about 15,000 branch employees to new business sectors, The Yomiuri Shimbun has learned.


The latest management challenge for TEPCO is how to raise funds for decommissioning its Fukushima No. 1 nuclear power plant, and for compensation following the nuclear accident. The power company also aims to improve its profitability through the large-scale organizational realignment, according to sources.


TEPCO plans to start the merger and closure of branches and the employee transfers as early as fiscal 2018.


Its branches are under the control of TEPCO Power Grid, Inc., the spin-off subsidiary of TEPCO operating its power transmission and distribution business. The branches are located in Tokyo and seven neighboring prefectures, including Kanagawa and Shizuoka prefectures. A total of about 15,000 employees, about half of about 33,000 TEPCO’s employees currently work at the 45 branches.


TEPCO Power Grid’s businesses include electrical work such as the construction of power transmission lines, recovery in the case of power failures, and calculating electricity charges.


It has been said that the company appoints too many employees, and it will transfer people in phases to new business sectors of TEPCO Power Grid, such as new services utilizing the next-generation power meters called “smart meters” and the development of infrastructure such as charging facilities for electric vehicles.


After the Great East Japan Earthquake in 2011, TEPCO announced a business reconstruction plan that year in which it aims to reduce the number of employees by about 7,400 across the whole group, including the power transmission and distribution business, by cutting back on hiring new employees, implementing voluntary retirement and other means. It will not implement measures to cut jobs in addition to this.


Decommissioning and other costs related to the nuclear accident at the Fukushima plant are estimated at about ¥22 trillion. TEPCO is supposed to shoulder about ¥16 trillion of this, which requires it to allocate ¥500 billion each year over the next about 30 years.


However, the competition for customers has been intensifying following the 2016 liberalization of the retail power market. There are also no prospects for the early restart of reactors at the Kashiwazaki-Kariwa nuclear power plant in Niigata Prefecture, which would help reduce the cost of the fuel needed to generate electricity.


In a new business reconstruction plan announced in May this year, TEPCO included organizational streamlining and the strengthening of new businesses utilizing new technologies, among other measures.


TEPCO Power Grid independently aims to increase its profits by more than ¥50 billion in fiscal 2018 from fiscal 2016 and by about ¥150 billion in fiscal 2025 from fiscal 2016. The latest reorganization plan is part of the new business reconstruction plan.

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