(Adds details about debt structure)
TOKYO Aug 12 Tokyo Electric Power Co
may hive off its hydropower and renewable energy operations into
a separate unit, people with knowledge of the matter said, in
another element to a revamp as it tries to recover from the
Fukushima nuclear disaster of 2011.
Tepco, as the utility is called, has drafted successive
recovery plans to restore its finances after the worst nuclear
disaster since Chernobyl in 1986, which led to its takeover by
A plan agreed by the government in January hinges on Tepco
restarting its Kashiwazaki Kariwa nuclear plant to cut fossil
fuel costs, a contentious undertaking staunchly opposed by the
With no units at the Kashiwazaki Kariwa plant likely to be
rebooted soon and with Japan undertaking reforms to fully
liberalise the electricity industry, the company needs to
consider further measures, said one of the sources, who is not
authorized to speak to the media.
The company had already planned to split into three units
under a holding company, covering power generation, electricity
transmission and distribution, and retail sales.
Executives are also working out how to divide Tepco's assets
among the holding company and subsidiaries, said another source.
The holding company is expected to have about 22 percent of
Tepco's assets, including its nuclear facilities, the
transmission company 57 percent, the power generation unit 14
percent and the hydropower renewable energy unit 7 percent, the
person said. The retail subsidiary will hold about 0.1 percent
of Tepco's assets.
The estimated 6.6 trillion yen ($64.5 billion) of debt that
Tepco is expected to have on its books by the end of March 2016
will be divided up in the same way, the person added.
The debt will be guaranteed by each unit's assets.
Projected annual revenues for the power generation section
were put at more than 2 trillion yen, the grid company 1-2
trillion yen and the retail unit at just under 6 trillion yen,
the person said. The hydropower and renewable unit is expected
to have 100 billion yen in annual revenues.
Tepco is aiming for each unit to be profitable on its own,
the person said.
The latest revision to Tepco's reorganization plan is
expected to be completed by the end of the year.
Tepco is considering splitting into various units to be
placed under the holding company, but nothing has been decided,
a company spokesman said by phone.
The March 2011 earthquake and tsunami triggered three
reactor meltdowns at Tepco's Fukushima Daiichi plant north of
In the more than three years since the disaster, the utility
has been plagued by a string of setbacks at the Fukushima
station, including leaks of highly radioactive water last year,
prompting the government to step in with more support.
The disaster led to the shutdown of all of Japan's reactors,
which are being subject to tougher safety standards. Two
reactors in southwestern Japan have received preliminary
approval to restart, but they are unlikely to be activated this
($1 = 102.3200 Japanese yen)
(Reporting by Kentaro Hamada and Taro Fuse; Writing by James
Topham; Editing by Aaron Sheldrick and Muralikumar Anantharaman)