(Corrects Hirose’s age in sixth paragraph. This story was first published on May 8.)
May 8 (Bloomberg) -- Tokyo Electric Power Co. wants to raise electricity rates for households by about 10 percent to cover increased fuel costs under a business plan given to the government, Trade and Industry Minister Yukio Edano said.
The request is still being considered, Edano told reporters today in Tokyo. The Nikkei newspaper in an unattributed report today said Tepco will officially ask for approval to raise rates by 10.28 percent.
Tepco’s business plan, submitted on April 27, seeks a 1 trillion yen ($12.5 billion) bailout following last year’s earthquake and tsunami that wrecked its Fukushima Dai-Ichi nuclear station. Beside the rate increase, Tepco is petitioning to restart nuclear reactors in its Kashiwazaki Kariwa plant on the other side of the country from Fukushima.
“The increase in electricity rates and the restart of the Kashiwazaki Kariwa plant are key to restoring Tepco’s profitability,” Takashi Aoki, a Tokyo-based fund manager at Mizuho Asset Management Co., said by phone. “It’s still unclear” whether the utility can execute the plan, he said.
Shares in Tepco rose 3.4 percent, the most since April 6, to close at 184 yen on the Tokyo Stock Exchange today. The stock has plunged more than 90 percent since the day before the March 11 disaster caused reactor fuel meltdowns at the Fukushima station.
In another step toward replacing executives tainted by the disaster, Tepco will promote Managing Director Naomi Hirose, 59, to replace President Toshio Nishizawa, Tepco Chairman-elect Kazuhiko Shimokobe told reporters in Tokyo.
“I personally like Tepco. It is unbearable for me to abandon the company as it is,” Hirose told reporters, when asked why he accepted the job.
Hirose, who spent time in sales at Tepco unlike most of his predecessors, said the company had tended to tell customers what was best for them and that won’t work anymore.
“Our customers won’t accept such an attitude,” Hirose said. “I would like to help reform the company.”
Hirose may not last long in the job, Mizuho’s Aoki said.
“He may be only a sacrificial pawn who will be replaced with someone else later as it’s still at a stage where someone has to take the chestnuts out of the fire,” Aoki said.
The utility aims for a profit of 105 billion yen ($1.3 billion) in the year ending March 2014, based on a rate increase and the restart of Kashiwazaki Kariwa, the Nikkei reported, citing the business plan. Tepco’s net loss for the year ended March may be about 710 billion yen, the paper said.
Tepco expects to post a loss of 695 billion yen in the fiscal year ended March 31, compared with a November estimate of 600 billion yen, it said in a statement Feb. 13.
The company plans to release its earnings and a list of new directors on May 14, Shimokobe said today.
“I want to make a decision as soon as possible” on whether to approve the business plan, Edano told reporters today. The plan will be made public after Edano’s approval, Shimokobe said April 27.
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