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TEPCO to woo Tokyo area

May 23, 2014

TEPCO to supply electricity outside Tokyo area




Tokyo Electric Power Co. said May 22 that it plans to sell electricity outside the Tokyo metro area beginning this fall.

TEPCO Customer Service Corp., a subsidiary of the operator of the embattled Fukushima No. 1 nuclear power plant, told the industry ministry that TEPCO will provide electricity on a country-wide basis starting as early as October.

The utility plans to raise sales outside the Tokyo area to 34 billion yen ($334 million) by fiscal 2016, and to 170 billion yen by fiscal 2023.

By selling power in areas it has not serviced before, as well as collaborating with other utilities, TEPCO plans to cover losses related to the Fukushima nuclear crisis and the shutdown of reactors.

TEPCO will try to woo Tokyo-based companies to make bulk purchases of electricity to be used at their branches, plants and shops across the nation by offering them lower prices than other major power producers.

The utility will organize a sales promotion base in the western Kansai region or the Chubu region next year.

To supply power to regions outside the area it now serves, TEPCO will procure electricity from outside sources that include factories with in-house generators.

TEPCO’s decision came as Chubu Electric Power Co. and Kansai Electric Power Co. began selling electricity in the Tokyo metropolitan area.

The power company is also making efforts to cut costs for thermal power generation by forming tie-ups with other utilities.

With all of the nation’s nuclear reactors currently offline, increasing fuel costs have been weighing on the finances of power companies.

“First, we will reduce expenses in the thermal power division,” Fumio Sudo, who became the chairman of TEPCO in April, has said.

TEPCO currently estimates that it can cut costs to the tune of 650 billion yen a year if it collaborates with other power or gas suppliers in various fields ranging from fuel procurement to installation and operations of power plants.

TEPCO is currently in talks with Chubu Electric Power, Tokyo Gas Co. and Osaka Gas Co. in efforts to establish a joint venture. TEPCO is expected to discuss the details of possible collaborations with those firms as early as the end of the month, and will decide which company to work with to set up the joint venture by the end of this fiscal year.

(This article was written by Mari Fujisaki and Ryo Inoue.)


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