Tepco Leads Drop in Utilities After Fukushima Bill

Photographer: Kiyoshi Ota/Bloomberg

Pedestrians walk past the Tokyo Electric Power Co. (Tepco) headquarters, center, in Tokyo. Close

Pedestrians walk past the Tokyo Electric Power Co. (Tepco) headquarters, center, in Tokyo.

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Photographer: Kiyoshi Ota/Bloomberg

Pedestrians walk past the Tokyo Electric Power Co. (Tepco) headquarters, center, in Tokyo.

Tokyo Electric Power Co. (9501) led a plunge in Japanese utility shares after an upper house committee approved a bill to allow more compensation claims against the operator of the crippled Fukushima Dai-Ichi reactor.

Tokyo Electric, known as Tepco, fell 6 percent to close at 612 yen on the Tokyo Stock Exchange, the lowest since May 15. Japan’s upper house committee earlier approved a bill to allow those affected by the March 2011 disaster to seek compensation even after the expiry of a three-year statutory period, a spokesman at the parliament said, confirming a Kyodo News report. The Topix Electric Power & Gas Index declined 2.4 percent, while the Nikkei 225 Stock Average rose 1.2 percent.

Tepco faces more than 11 trillion yen ($108 billion) in estimated costs, including compensation payments, after the quake and tsunami two years ago caused three meltdowns and radiation leaks, forcing about 160,000 people to evacuate. Tepco had paid more than 2.2 trillion yen in compensation by the end of April, it said last month.

Even with today’s decline, the stock has risen almost threefold this year, the best performer among the 82 securities in the MSCI World/Utilities Index. Four other regional power companies from Japan are also among the best-performing utilities on the index this year.

The upper house is due to discuss the bill at a lower house plenary session in Tokyo tomorrow, the spokesman said.

Other Japanese power utilities also fell. Kansai Electric Power Co., the country’s second-biggest power company, fell 0.4 percent, reversing earlier gains of as much as 7.5 percent. Tohoku Electric Power Co. fell 4.5 percent to 1,046 yen. Chugoku Electric Power Co. declined 4.3 percent to 1,338 yen.

Hokkaido Electric Advances

Hokkaido Electric Power Co. (9509) was one of two utilities on the 17-member Topix electric index to advance today. Hokkaido Electric rose 3.2 percent to 1,254 yen, while Shizuoka Gas Co. gained 8 yen, or 1.1 percent, to 715 yen.

Kansai Electric and Hokkaido Electric plan to submit an application to the Nuclear Regulation Authority to restart their reactors as soon as they can after new safety requirements from the country’s nuclear watchdog are put into effect in July, spokesmen at the companies said today.

All but two of Japan’s 50 reactors are offline with no official date set for restart as they are undergoing checks and upgrading equipment to meet the new safety rules. Among the country’s nuclear plant operators, Shikoku Electric Power Co. and Kyushu Electric Power Co. earlier this month said they plan to apply for restarts in July.

Views differ on the timing of restarts that would help the power companies reduce fuel costs after they reported combined losses of 1.6 trillion yen last fiscal year.

Shikoku Electric’s Ikata No. 3 reactor may be restarted in October, the first among the idled units, Hidetoshi Shioda, a Tokyo-based analyst at SMBC Nikko Securities Inc., wrote in April. Japan may gradually restart the idled reactors after January 2014, Hiroyuki Sakaida, an analyst at Goldman Sachs Group Inc., wrote in a report earlier this week.

To contact the reporter on this story: Tsuyoshi Inajima in Tokyo at tinajima@bloomberg.net

To contact the editor responsible for this story: Jason Rogers at jrogers73@bloomberg.net

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