Tokyo Electric Power Co., the operator of the wrecked Fukushima plant that gave up control to the government, widened its annual net loss forecast after the state ordered it to scale back an electricity rate increase.
The company known as Tepco expects a net loss of 160 billion yen ($2 billion) in the year ending March 2013, compared with a 100 billion yen loss estimate in May, it said today in a statement. Tepco posted a net loss of 288.4 billion yen for the quarter ended June 30 compared with a loss of 572 billion yen a year earlier, it said.
Seven Japanese nuclear utilities, including Kansai Electric Power Co., reported a combined quarterly loss of 268 billion yen as the shutdown of atomic stations after the Fukushima disaster caused by the quake and tsunami last year increased fuel costs to operate oil- and gas-fired plants. Tepco, which serves about 30 million customers in the Tokyo metropolitan area, trimmed a rate increase after the government’s order, hindering a goal to return to profit in the year ending March 2014.
“Tepco may seek raising electricity rates again early next year if it sees no sign that its Kashiwazaki Kariwa nuclear plant can be restarted as planned,” Hirofumi Kawachi, an energy analyst at Mizuho Investors Securities Co., said by phone before the earnings announcement. The utility may have to request a 10 percent rate increase for companies and households to cover fuel costs, Kawachi said.
Tepco shares have plunged 94 percent since the Fukushima disaster on March 11, 2011. The stock fell 2.3 percent to 128 yen today on the Tokyo Stock Exchange. The benchmark Nikkei 225 Stock Average declined 0.6 percent.
The Japanese government provided 1 trillion yen to the utility yesterday in return for more than 50 percent of its voting rights, effectively nationalizing Tepco, after the Fukushima disaster left the company on the brink of bankruptcy. The utility posted a loss of 781.6 billion yen in the last fiscal year.
Fossil fuel costs for Tepco surged as its nuclear plants that were idled before and after the Fukushima disaster remained shut. Trimming the rate increase may lower revenue by about 84 billion yen, the utility said.
The company plans to gradually restart its Kashiwazaki Kariwa nuclear plant, the world’s biggest, after April 2013, according to the utility’s turnaround plan released in May. Tepco estimates that restarting one Kashiwazaki Kariwa reactor will cut its annual costs by about 78 billion yen.