“TEPCO, the utility that serves 29 million households and businesses in the Tokyo metropolitan area, and that owns the Fukushima nuclear power plant where three melted-down reactors are contaminating air, soil, groundwater, and seawater, an outfit famous for its lackadaisical handling of the fiasco and the parsimoniousness with which it doles out information – the most despised and ridiculed company in Japan reported earnings today. It was a doozie. Instead of sending it into bankruptcy court to make bondholders and stockholders pay their share, the government has bailed it (and them) out lock, stock, and barrel. And it’s still on taxpayer-funded life support. So it was good news that revenues jumped 11.8% to ¥3.2 trillion during the fiscal first half ending September 30 – blistering hot growth for a utility with 49,000 employees in a slow-or-no-growth market! But that was about it with the good news. It wasn’t even good news. It was based exclusively on electricity rate hikes that regulators had approved to compensate the company for the costs of running fossil-fuel power plants instead of its nuclear power plants, which remain shut down. It then inflicted those higher rates on already struggling businesses and squeezed consumers. Sign of a booming Abenomics economy? Nope. Electricity sales volume fell by 1.7% in the first half. Among the reasons, ominously: a “decrease in production activities.” Commercial use fell 1.7% and industrial use 0.5% from the already depressed levels last year. Among large-scale industrial customers, electricity sales to ferrous metals companies suffered the most, down 6.7%, followed by sales to machinery producers, down 3.8%. Net profit for the first half soared to ¥616.2 billion ($6.2 billion), up from a steep loss last year. But the rate hikes alone, big as they’ve been, couldn’t accomplish that. So cost cuts? TEPCO is certainly trying to cut costs in dealing with the Fukushima fiasco, mostly by cutting corners. Efforts that produce curious results. A few days ago, for example, when it didn’t put enough pumps in place to deal with the rains from the typhoon, water contaminated with highly radioactive and toxic Strontium-90 leaked once again into the ocean. Despite all these valiant efforts at cutting corners, its “ordinary expenses” rose 1.2%...”
Posted on: Sun, 03 Nov 2013 19:41:30 +0000