Tokyo Electric Power Co.’s incoming chairman, Fumio Sudo, said the utility should look to the business models of Japan’s internationally competitive industries, such as the auto and steelmaking sectors, and break away from the virtual regional monopoly it has long enjoyed.
Tokyo Electric Power Co.’s incoming chairman, Fumio Sudo, said the utility should look to the business models of Japan’s internationally competitive industries, such as the auto and steelmaking sectors, and break away from the virtual regional monopoly it has long enjoyed.
Sudo told The Asahi Shimbun on Feb. 25 that the operator of the crippled Fukushima nuclear plant should increase its earnings by investing overseas and return those profits to the public instead of focusing on the shrinking domestic market.
He also said the utility should streamline its operations before considering additional rate hikes.
Sudo, who is an adviser to steelmaker JFE Holdings Inc. and has served as an outside TEPCO board member since June 2012, will become chairman in April, three years after the Great East Japan Earthquake and tsunami triggered the crisis at the utility's Fukushima No. 1 nuclear power plant.
He played a leading part toward the end of last year in compiling TEPCO’s new rehabilitation plan, which promises to cut costs by 4.8 trillion yen ($47 billion) in 10 years and assumes that operations at the Kashiwazaki-Kariwa nuclear power plant in Niigata Prefecture will resume this summer.
Excerpts of the interview follow:
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TEPCO has been sensitive only to competition among electric power companies in Japan. Demand in the domestic market will shrink as the number of newborns declines and the use of "smart meters" (energy-saving electricity usage indicators) spreads. We have to invest overseas and return those profits to Japanese citizens.
Another problem is that our ability to purchase fuel (such as natural gas at lower prices) has fallen short compared to South Korean power utilities. The prices TEPCO has been buying fuel at have averaged more than 10 percent higher than those paid by South Korean power producers. We plan to form a comprehensive tie-up with other companies in the area of fuel procurement. I hope that plan will be realized by the end of this fiscal year.
We should never contemplate rate increases until we make every effort possible until there are no other choices. It is common sense in the auto and steel industries.
(This article is based on an interview by Mari Fujisaki and Takashi Ebuchi.)