Tokyo Electric Power Co. managing director Toshio Nishizawa, who will be promoted to company president late next month, said May 20 that he is determined to end the crisis at the Fukushima No. 1 nuclear power plant quickly and efficiently.
Tokyo Electric Power Co. managing director Toshio Nishizawa, who will be promoted to company president late next month, said May 20 that he is determined to end the crisis at the Fukushima No. 1 nuclear power plant quickly and efficiently.
"Since our firm was founded, the current crisis is unprecedented. I will do my best to settle the accidents, make compensation in a fair and quick manner, stabilize the supply of electricity and streamline the company's operations drastically," Nishizawa, 60, said at a news conference held at the utility's head office in Tokyo.
Nishizawa, who will officially replace current TEPCO president Masataka Shimizu, 66, at an annual shareholders' meeting to be held June 28, worked in the planning division of TEPCO for many years.
Now in charge of both the planning division and the public relations division, Nishizawa is also serving as head of the TEPCO secretariat at the headquarters set up by the government and the utility to solve the nuclear crisis at the Fukushima No. 1 plant.
"Nishizawa will tackle the issues patiently and with strong conviction," said Shimizu, who will resign as president to take responsibility for the accidents at the Fukushima plant.
Settlement of the nuclear crisis and the compensation issues will require a great deal of time, therefore, patience is now regarded as a necessary qualification for the president.
Nishizawa is familiar with high-ranking government officials, including Banri Kaieda, economic minister, and Goshi Hosono, special adviser to Prime Minister Naoto Kan.
"I thought the next (TEPCO) president should be Nishizawa." said an executive with government's Agency for Natural Resources and Energy.
Within the company, Nishizawa had been regarded as a strong candidate for president early on. "He has a firm grasp of our company," said a TEPCO official. "He also has leadership."
Nishizawa has also served as the head of the planning division of the Federation of Electric Power Companies of Japan, giving him many connections in the electric power industry.
Tsunehisa Katsumata will remain as company chairman for the time being although he has decided to resign in the near future. Four of the six vice presidents will also remain in their posts.
So although the TEPCO management reshuffle was announced May 20, it was not a total house cleaning.
"We minimized the reshuffle because our company has to resolve the accidents, make compensation and secure the supply of electricity," Shimizu said.
Also resigning is Sakae Muto, a vice president in charge of nuclear power, however. Shimizu will continue to serve as an adviser without pay.
Another vice president, Makio Fujiwara, will assume the post of auditor. Managing director Zengo Aizawa, in charge of environmental issues and thermal power generation, will be promoted to a vice president.
In the financial statement for fiscal 2010 that ended in March, TEPCO posted an extraordinary loss of 1.0776 trillion yen ($13.5 billion) to deal with the accident at the Fukushima plant and equipment damaged by the March 11 Great East Japan Earthquake. The utility will not pay a year-end dividend for fiscal year 2010.
TEPCO did not reveal prospects for business performance for fiscal 2011 because the amount of compensation and the increase in operating costs are unclear. However, it is certain that the utility will end up in the red.
TEPCO is not expected to pay a midterm dividend or a year-end dividend for fiscal 2011.
Starting in fiscal 2011, TEPCO will have to pay compensation, which is expected to amount to several trillions of yen.
The utility will also have heavy financial obligations, such as fuel costs for thermal power generation, which are likely to increase following suspension of operations at the Fukushima plant, and decommissioning costs for reactors there.
The amount of these obligations cannot be currently calculated, however, it is certain they will serve as drag on TEPCO management for a long time.
Following a request from the prime minister, TEPCO increased assets, such as shares and real estate, that it will sell off. The sales are expected to bring in at least 600 billion yen.
The utility will cut 500 billion yen in expenditures in fiscal 2011 mainly by cutting personnel and other costs.
However, even if TEPCO implements these measures, there is a possibility that TEPCO will be forced to raise electricity rates because of the high costs of compensation payments and increase in fuel costs.
"I will implement large-scale streamlining," Nishizawa said. "As for the (possible rise in) electricity charges, now is not the time to talk about it."