Tokyo Electric Power Company
, also known as or TEPCO, is a Japanese electric utility holding company servicing Japan's Kantō region, Yamanashi Prefecture, and the eastern portion of Shizuoka Prefecture. This area includes Tokyo. Its headquarters are located in Uchisaiwaicho, Chiyoda, Tokyo, and international branch offices exist in Washington, D.C., and London. It is a founding member of strategic consortiums related to energy innovation and research; such as JINED, INCJ and MAI. In 2007, TEPCO was forced to shut the Kashiwazaki-Kariwa Nuclear Power Plant after the Niigata-Chuetsu-Oki earthquake. That year it posted its first loss in 28  years. Corporate losses continued until the plant reopened in 2009. Following the 2011 Tōhoku earthquake and tsunami, one of its power plants was the site of one of the world's most serious ongoing nuclear disaster, the Fukushima Daiichi nuclear disaster. TEPCO could face ¥ ($) in special losses in the current business year to March 2012, and the Japanese government plans to put TEPCO under effective state control to guarantee compensation payments to the people affected by the accident. The Fukushima disaster displaced 50,000 households in the evacuation zone because of leaks of radioactive materials into the air, soil  and sea. In July 2012, TEPCO received ¥1 trillion from the Japanese government in order to prevent collapse of the company to ensure electricity is still being supplied to Tokyo and its surrounding municipalities, and for the decommissioning of the Fukushima Daiichi Nuclear Power Plant.<ref name="Guardian 09/05/2012"></ref> TEPCO's management subsequently made a proposal to its shareholders for the company to be part-nationalized. The Nuclear Damage Compensation and Decommissioning Facilitation Corporation later became the majority stockholder to oversee damages and decommissioning of the power plant. The total cost of the disaster was estimated at $100bn in  May 2012. History. Japan's electricity sector, nationalized in 1939 in preparation of total war (the Pacific War), were privatized in 1951 on behest of the U.S./Allied occupation forces, creating nine privately owned government-granted monopolies, one in a certain region; this included TEPCO. The business model are modeled after the United States electricity industry, which was mostly regulated and privately owned at the time. In the 1950s, the company's primary goal was to facilitate a rapid recovery from the infrastructure devastation of World War II. After the recovery period, the company had to expand its supply capacity to  catch up with the country's rapid economic growth by developing fossil fuel power plants and a more efficient transmission network. In the 1960s and 1970s, the company faced the challenges of increased environmental pollution and oil shocks. TEPCO began addressing environmental concerns through expansion of its LNG fueled power plant network as well as greater reliance on nuclear power generation. The first nuclear unit at the Fukushima Dai-ichi (Fukushima I) nuclear power plant began operational generation on March 26, 1971. During the 1980s and 1990s, the widespread use of air-conditioners and IT/OA appliances resulted a gap  between day and night electricity demand. In order to reduce surplus generation capacity and increase capacity utilization, TEPCO developed pumped storage hydroelectric power plants and promoted thermal storage units. Recently, TEPCO is expected to play a key role in achieving Japan's targets for reduced carbon dioxide emissions under the Kyoto Protocol. It also faces difficulties related to the trend towards deregulation in Japan's electric industry as well as low power demand growth. In light of these circumstances, TEPCO launched an extensive sales promotion campaign called 'Switch!', promoting all-electric housing in order to both achieve the more efficient  use of its generation capacity as well as erode the market share of gas companies. Major subsidiaries. As Tokyo Electric Power Company Holdings, Inc. is a holding company, there are several major wholly owned subsidiaries. Corporate overview. Community compensation. Tokyo Electric Power could face 2 trillion yen ($23.6 bln) in special losses in the current business year to March 2012 to compensate communities near its crippled Fukushima nuclear plant, according to JP Morgan. Japan plans to put TEPCO under effective state control so it can meet its compensation payments to people affected by radiation from its Fukushima I plant . Tokyo will set aside several trillion yen in public funds that TEPCO can "dip into if it runs short for payouts to people affected". Salary pay cuts. The company workers agreed to a management proposal to cut their pay as a sense of responsibility for the world's worst nuclear disaster. Annual remuneration for board members will be reduced by 50 percent since April 2011, while payment for managers will be cut by 25 percent and workers by 20 percent both since July 2011 and bonuses since June 2011. The company expects to save about 54 billion yen ($659  million) a year from the pay cuts. In July 2012 it was announced that annual salaries of managers will be reduced by at least 30%, with workers pay cut remaining at 20%. On average employees pay would be cut by 23.68%. In addition, the portion of the employee health insurance program that the company covers will be reduced from 60% to 50%, the standard in Japan. Sale of hospital. It was announced in July 2012 that the company would sell the hospital it owns in Shinjuku Ward in Tokyo. The hospital is used exclusively by current and former TEPCO employees  and their families. Its market value is ¥8.6 billion. Power stations and generation capacity. Position in the industry. TEPCO is the largest electric utility in Japan and the 4th largest electric utility in the world after German RWE, French Électricité de France and Germany's E.ON. As TEPCO stands in a leading position in this industry, they have relatively a strong effect for Japanese economics, environment, and energy industry. Management and finance. For the fiscal years ending in 2011, 2012 the company had a pretax loss, in 2013 the deficit was 377.6 billion yen. In the following year 2014  red figures were expected too. Generation. The company's power generation consists of two main networks. Fossil fuel power plants around Tokyo Bay are used for peak load supply and nuclear reactors in Fukushima and Niigata Prefecture provide base load supply. Additionally, hydroelectric plants in the mountainous areas outside the Kanto Plain, despite their relatively small capacity compared to fossil fuel and nuclear generation, remain important in providing peak load supply. The company also purchases electricity from other regional or wholesale electric power companies like Tohoku Electric Power, J-POWER, and Japan Atomic Power Company. Transmission and distribution. The company  has built a radiated and circular grid between power plants and urban/industrial demand areas. Each transmission line is designed to transmit electricity at high-voltage (66-500kV) between power plants and substations. Normally transmission lines are strung between towers, but within the Tokyo metropolitan area high-voltage lines are located underground. From substations, electricity is transmitted via the distribution grid at low-voltage (22-66kV). For high-voltage supply to large buildings and factories, distribution lines are directly connected to customers' electricity systems. In this case, customers must purchase and set up transformers and other equipment to run electric  appliances. For low voltage supply to houses and small shops, distribution lines are first connected to the company's transformers (seen on utility poles and utility boxes), converted to 100/200V, and finally connected to end users. Under normal conditions, TEPCO's transmission and distribution infrastructure is notable as one of the most reliable electricity networks in the world. Blackout frequency and average recovery time compares favorably with other electric companies in Japan as well as within other developed countries. The company instituted its first-ever rolling blackouts following the shutdown of the Fukushima I and II plants which were close  to the epicenter of the March 2011 earthquake. For example, on the morning of Tuesday, March 15, 2011, 700,000 households had no power for three hours. The company had to deal with a 10 million kW gap between demand and production on March 14, 2011. Corporate image. Safety incidents. On August 29, 2002, the government of Japan revealed that TEPCO was guilty of false reporting in routine governmental inspection of its nuclear plants and systematic concealment of plant safety incidents. All seventeen of its boiling-water reactors were shut down for inspection as a result. TEPCO's chairman Hiroshi Araki , President Nobuya Minami, Vice-President Toshiaki Enomoto, as well as the advisers Shō Nasu and Gaishi Hiraiwa stepped-down by September 30, 2002. The utility "eventually admitted to two hundred occasions over more than two decades between 1977 and 2002, involving the submission of false technical data to authorities". Upon taking over leadership responsibilities, TEPCO's new president issued a public commitment that the company would take all the countermeasures necessary to prevent fraud and restore the nation's confidence. By the end of 2005, generation at suspended plants had been restarted, with government approval. In 2007, however, the company  announced to the public that an internal investigation had revealed a large number of unreported incidents. These included an unexpected unit criticality in 1978 and additional systematic false reporting, which had not been uncovered during the 2002 inquiry. Along with scandals at other Japanese electric companies, this failure to ensure corporate compliance resulted in strong public criticism of Japan's electric power industry and the nation's nuclear energy policy. Again, the company made no effort to identify those responsible. 2008 shutdown. In 2008, Tokyo Electric, forced to shut the Kashiwazaki-Kariwa Nuclear Power Plant after an earthquake, posted its  first loss in 28 years as oil and gas costs soared. Nuclear accidents. On 11 March 2011 several nuclear reactors in Japan were badly damaged by the 2011 Tōhoku earthquake and tsunami. The Tōkai Nuclear Power Plant lost external electric power, experienced the failure of one of its two cooling pumps, and two of its three emergency power generators. External electric power could only be restored two days after the earthquake. The Japanese government declared an "atomic power emergency" and evacuated thousands of residents living close to TEPCO's Fukushima I plant. Reactors 4, 5 and 6 had been shut  down prior to the earthquake for planned maintenance. The remaining reactors were shut down automatically after the earthquake, but the subsequent tsunami flooded the plant, knocking out emergency generators needed to run pumps which cool and control the reactors. The flooding and earthquake damage prevented assistance being brought from elsewhere. Over the following days there was evidence of partial nuclear meltdowns in reactors 1, 2 and 3; hydrogen explosions destroyed the upper cladding of the building housing reactors 1 and 3; an explosion damaged reactor 2's containment; and severe fires broke out at reactor 4. The Fukushima nuclear disaster  revealed the dangers of building multiple nuclear reactor units close to one another. This proximity triggered the parallel, chain-reaction accidents that led to hydrogen explosions blowing the roofs off reactor buildings and water draining from open-air spent fuel pools—a situation that was potentially more dangerous than the loss of reactor cooling itself. Because of the proximity of the reactors, Plant Director Masao Yoshida "was put in the position of trying to cope simultaneously with core meltdowns at three reactors and exposed fuel pools at three units". The Japanese authorities rated the events at reactors 1, 2 and  3 as a level 5 (Accident With Wider Consequences) on the International Nuclear Event Scale, while the events at reactor 4 were placed at level 3 (Serious Incident). The situation as a whole was rated as level 7 (Major Accident). On 20 March, Japan's chief cabinet secretary Yukio Edano "confirmed for the first time that the nuclear complex — with heavy damage to reactors and buildings and with radioactive contamination throughout — would be closed once the crisis was over." At the same time, questions are being asked, looking back, about whether company management waited too long before pumping seawater into  the plant, a measure that would ruin and has now ruined the reactors; and, looking forward, "whether time is working for or against the workers and soldiers struggling to re-establish cooling at the crippled plant." One report noted that defense minister, Toshimi Kitazawa, on 21 March had committed "military firefighters to spray water around the clock on an overheated storage pool at Reactor No. 3." The report concluded with "a senior nuclear executive who insisted on anonymity but has many contacts in Japan sa[ying that] ... caution ... [as] plant operators have been struggling to reduce workers’ risk ... had increased the  risk of a serious accident. He suggested that Japan's military assume primary responsibility. 'It's the same trade-off you have to make in war, and that is the sacrifice of a few for the safety of many,' he said. 'But a corporation just cannot do that.'" There has been considerable criticism to the way TEPCO handled the crisis. It was reported that seawater was used only after Prime Minister Naoto Kan ordered it following an explosion at one reactor the evening of 12 March, though executives had started considering it that morning. TEPCO didn't begin using  seawater at other reactors until 13 March. Referring to that same early decision-making sequence, "Michael Friedlander, a former senior operator at a Pennsylvania power plant with General Electric reactors similar to the troubled ones in Japan, said the crucial question is whether Japanese officials followed G.E.’s emergency operating procedures." Kuni Yogo, a former atomic energy policy planner in Japan's Science and Technology Agency and Akira Omoto, a former TEPCO executive and a member of the Japanese Atomic Energy Commission both questioned TEPCO's management's decisions in the crisis. Kazuma Yokota, a safety inspector with Japan's  Nuclear and Industrial Safety Agency, or NISA, was at Fukushima I at the time of the earthquake and tsunami and provided details of the early progression of the crisis. The Fukushima disaster displaced 50,000 households in the evacuation zone because of radioactivity releases into the air, soil and sea. In 2012 it was reported that 8.5 tonnes of radioactive water had leaked from Fukushima Daiichi No.4. In June 2012 TEPCO revealed, that in 2006 and 2008 TEPCO-employees made two studies in which the effect of tsunami-waves higher than the "official" expected height of 5.7 meters was studied on  the performance of the reactors. This was done after the large Indian Ocean tsunami in 2004. The conclusion from the simulation in 2006 was, that a 13.5 meter wave would cause a complete loss of all power and would make it impossible to inject water into reactor No.5. The costs to protect the plant for such an event was estimated to be about 25 million dollars. In 2008 the effect of a 10 meter high tsunami was calculated. TEPCO failed in both cases to take advantage of this knowledge, and nothing was done to prevent such an event to happen , because the study sessions were conducted only as a training for junior employees, and the company did not really expect such large tsunamis. TEPCO subsequently signed a partnership with French company Areva to treat the contaminated water. In 2016 three former TEPCO executives, chairman Tsunehisa Katsumata and two vice presidents, were indicted for negligence resulting in death and injury. All were acquitted by the Tokyo District Court on Sept. 19, 2019. Company future. On 30 March 2011, the president of TEPCO, Masataka Shimizu, was hospitalized with symptoms of dizziness and high blood pressure in the wake of an increasingly serious  outlook for the Fukushima plant and increasing levels of radiation from the stricken plant, as well as media reports of TEPCO's imminent nationalization or bankruptcy triggered by the situation at the Fukushima plant. On July 31, 2012, TEPCO was substantially nationalized by receiving a capital injection of 1 trillion yen (US$12.5bn) from the Nuclear Damage Liability Facilitation Fund (currently Nuclear Damage Compensation and Decommissioning Facilitation Corporation), a government-backed support body. The Fund holds the majority (50.11%) of voting rights with an option to raise that figure to 88.69% by converting preferred stocks into common stocks. This Japan 's biggest utility had received by the end of February 2016 at least 5.7609 trillion yen in state support since the tsunami. The total cost of the disaster was estimated at $100bn in May 2012. In April all Japanese nuclear reactors were closed. Power plants. Nuclear. In March 2008, Tokyo Electric announced that the start of operation of four new nuclear power reactors would be postponed by one year due to the incorporation of new earthquake resistance assessments. Units 7 and 8 of the Fukushima Daiichi plant would now enter commercial operation in October 2014 and October 2015, respectively . However, following the nuclear crisis of 2011, these plans have been cancelled. According to TEPCO's official regulatory paper, starting operation of Higashidori is expressed as 'Not yet determined'. Hydro. TEPCO has a total of 160 hydroelectric stations with a total capacity of 8,520 MW. The largest pumped-storage plants are: Electric vehicle batteries and recharging. Under the lead of an organization affiliated with the Ministry of Economy, Trade and Industry, the Tokyo Electric Power Company is working out next-gen car battery norms. It has developed a specification for high-voltage DC automotive fast charging using a JARI Level  3 DC connector, and formed the CHΛdeMO (stands for Charge and Move) association with Japanese automakers Mitsubishi, Nissan and Subaru to promote it. The city of Tokyo: second largest shareholder. On 11 April 2012 TEPCO announced that Tokyo had temporarily become the largest shareholder of the firm with 9.37 percent voting rights, after former largest share holders Dai-ichi Life Nippon Life Insurance Co. and Nippon Life Insurance Co. had sold their 3.42 and 3.29 percent stakes in the company. The two life insurance companies had lost their interest in TEPCO after the shares had lost almost all their value  at the stock market. At the next shareholders meeting of TEPCO in June 2012, Tokyo hoped to put a halt to TEPCO's plans raising the price of electricity. This position was changed by later ownership changes. TEPCO to cancel nuclear promotion abroad. Early June 2012 TEPCO announced that it would cancel all export of nuclear expertise abroad, because it needed to focus on the stabilisation of the damaged reactors in Fukushima. All participation in a program to supply and run two nuclear reactors at a plant in Vietnam would be cancelled. This project undertaken by International Nuclear Energy Development , a public company set up in 2010 by heavy machinery producers and power companies, including TEPCO, aims to promote Japanese nuclear expertise and exports. According to Naomi Hirose, director of TEPCO, "Our atomic power engineers still need to do a lot more to stabilise and decommission the reactors" at the crippled Fukushima Daiichi plant, and: "It is impossible" to abandon the domestic task and promote exports.