No aftershock in Tepco year-end loss

30 April 2008

A net loss posted by Tokyo Electric Power Co (Tepco) for fiscal 2007 was slightly less than the company had previously predicted, although its estimate of the financial impact of the shutdown of the Kashiwazaki Kariwa nuclear power plant has been revised upwards.


In figures released at the end of the fiscal year on 30 April, the Japanese utility company noted a net consolidated loss of ¥150.1 billion ($1.4 billion) – reportedly its first loss in 28 years. Tepco previously forecast that it expected net losses to be ¥155 billion ($1.5 billion) for the year.


The losses are primarily the result of the enforced shutdown of Kashiwazaki Kariwa, Tepco's seven-unit nuclear power plant, in the wake of the magnitude 6.8 Niigata-Chuetsu-Oki earthquake in July 2007. All seven of the reactors remained safe during the event, and in February 2008 an IAEA mission concluded that there was no significant damage to those parts of the plant that are critical to safety. Extensive checks of all the units have been carried out and it is expected that all will return to service following repairs, but this could take a long time. In October 2007 Tepco announced its estimate of the financial impact of the earthquake as ¥603.5 billion ($5.8 billion). It has now upped that estimate to ¥615.6 billion ($5.9 billion).


Operating revenues and incomes were both up on the previous year, with increased domestic air-conditioning demand plus a hotter summer and colder winter driving an increase in electricity sales, but Tepco cited an extraordinary loss of ¥269.2 billion ($2.6 billion) resulting from inspection and restoration costs at the stricken nuclear plant. Overall expenses for the year showed a substantial increase, the company said, due to increases in fuel costs and the electricity it has had to buy to make up for the lost power from Kashiwazaki Kariwa.