Tokyo Electric Power Co. plans to raise nearly 590 billion yen ($7.66 billion) on its own to gain 890 billion yen in government financial assistance to pay compensation for the Fukushima nuclear accident.
Tokyo Electric Power Co. plans to raise nearly 590 billion yen ($7.66 billion) on its own to gain 890 billion yen in government financial assistance to pay compensation for the Fukushima nuclear accident.
Those figures were included in a special business plan compiled by TEPCO and the government's nuclear accident compensation aid organization. The plan, a requirement for the utility in seeking state funds to compensate victims of the disaster at its Fukushima No. 1 nuclear power plant, was submitted to the government on Oct. 28.
The Asahi Shimbun obtained a copy of the plan.
As part of its restructuring efforts for this fiscal year, TEPCO listed sales of assets totaling 348.4 billion yen, cutting 237.4 billion yen in personnel and other costs and reducing the interest rates on corporate pensions to its retirees.
The company plans to introduce a new corporate pension system in fiscal 2012, which begins in April.
Industry minister Yukio Edano, who is in charge of compensation for nuclear damage, is expected make a decision on TEPCO's request in early November.
The latest plan includes "stopgap measures" to allow the company to manage its cash flow for the time being.
TEPCO's planned hike in electricity rates and other measures to deal with its financial difficulties are expected in its comprehensive business program to be submitted next spring.
The current business plan estimates total compensation for victims of the nuclear accident at 1.011 trillion yen.
TEPCO's request for 890 billion yen does not include the 120 billion yen the government is obligated to pay in the insurance system stipulated under the law on compensation for nuclear damage.
The business plan also cited "five promises," such as prompt payouts and user-friendly documents, to improve the company's response to compensation claimants.
The utility came under fire from victims of the nuclear accident for its 160-page brochure explaining the compensation procedure for individuals.
The company said in the plan that it will make the brochure much easier for readers to understand. It will decide on details by the end of November.
TEPCO and the government's nuclear accident compensation aid organization will work out the restructuring plans by the year-end. Senior officials at TEPCO and the organization will oversee if the proposed steps are implemented.
The company also asked the Development Bank of Japan for 300 billion yen in short-term loans.
Other TEPCO measures to raise funds for compensation include continuing with the return of remuneration packages of executive vice presidents or above and reducing the salaries of other directors.
The parent company projects a net loss of 576.3 billion yen for fiscal 2011 due to ballooning fuel costs for its thermal power plants, which have had to generate more electricity since the March 11 earthquake and tsunami crippled the Fukushima nuclear plant.
TEPCO's net assets are expected to be worth 708.8 billion yen at the end of fiscal 2011, a level in which its debts could exceed its assets.
The company will be able to avert such a situation if Edano approves the business plan, but TEPCO would effectively come under state control since it cannot operate without government funding.