Japan to Examine Separation of Tepco Power Plants, Distribution
The head of the oversight committee for Tokyo Electric Power Co. said a possible separation of the utility’s electricity distribution and generation units will be part of the probe into the company’s structure and assets.
The committee will “thoroughly examine systems that regulators haven’t touched for a long time” including separation of Tepco’s distribution and generation operations, Kazuhiko Shimokobe, the chairman of the panel investigating the utility’s finances, told reporters in Tokyo today.
Japan’s government set up the committee to assist in compensation plans for those affected by the nuclear accident at Tokyo Electric’s Fukushima Dai-Ichi nuclear plant. The utility known as Tepco plans to raise more than 600 billion yen ($7.7 billion) through asset sales, one of the conditions for receiving government support, for compensation payments.
Tepco may face as much as 11 trillion yen ($141 billion) in claims, according to Bank of America Corp.’s Merrill Lynch unit.
It was also announced at the press conference that Deloitte Touche Tohmatsu LLC, Boston Consulting Group Inc. and Nishimura & Asahi were chosen by Japan’s government to carry out due diligence on Tepco’s assets.
The advisers will provide interim reports by late August and final reports by mid-September, The oversight committee will provide its own report by the end of September, Shimokobe said.
In investigating the utility’s management and finance, the committee will focus on five areas: identifying assets, costs, electricity pricing, the electricity wholesale market, and assessing Tepco’s long term structure, it said in a statement.
To contact the reporters on this story: Tsuyoshi Inajima in Tokyo at tinajima@bloomberg.net; Yuji Okada in Tokyo at yokada6@bloomberg.net
To contact the editor responsible for this story: Peter Langan at plangan@bloomberg.net
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