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TEPCO: More problems ahead

August 17, 2012

Tokyo aims to end power sale to TEPCO in March 2013



TOKYO (Kyodo) -- The Tokyo Metropolitan Government has asked Tokyo Electric Power Co. to terminate in March next year their contract under which the government sells electricity it generates through its power facilities to the utility, sources close to the matter said Friday.

The Tokyo government wants instead to arrange a competitive tender so that it can sell its power to the highest bidder and invigorate the electricity market by allowing new entrants into the electricity business.

Tokyo says it sold electricity produced by its three hydropower plants to TEPCO for around 1 billion yen in fiscal 2011.

In April, Gov. Shintaro Ishihara said that he wanted to change the current system so that Tokyo could sell power to firms other than TEPCO.

Tokyo intends to submit a draft plan to make that happen to the local assembly in September, the sources said.

The current power sale contract between Tokyo and TEPCO is valid until 2019 but Tokyo maintains that it would not have to pay any compensation to the utility even if it cancels the contract.

TEPCO has admitted that the Tokyo government has requested to end the contract but the utility does not intend to do so before the contract's expiration date.


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