February 7, 2016 / 5:13 PM / 3 years ago

Japan's Tepco works hard to pull out from government control

TOKYO (Reuters) - The Japanese government fund may reduce its stake in Tokyo Electric Power Co to below 50 percent in 2017 if the company achieves its goals including its first bond issuance in six years, the company’s president said.

Tokyo Electric Power Co's (TEPCO) President Naomi Hirose speaks during a group interview at the company's headquarters in Tokyo, Japan February 5, 2016. REUTERS/Toru Hanai

Tepco was saved from bankruptcy by the government in 2012 following reactor meltdowns at its Fukushima-Daiichi plant after an earthquake and tsunami in March 2011.

Tepco, owned 50.1 percent by the government fund, will be vetted in March 2017 to see if the targets set by Tokyo have been achieved. Then the government may lower its stake to below 50 percent next year and in stages to zero by early 2030s.

“The process for attaining the goals is progressing smoothly,” Tepco President Naomi Hirose told a group of reporters on Friday. “We are not optimistic but the situation is not disastrous.”

Almost five years after the disaster, Tepco has lowered radiation levels at the plant and increased substantially the areas where workers can walk around with no full-face masks on, he said.

Asked whether Fukushima-Daiichi plant’s decommissioning will complete within 40 years as planned, he said: “That’s a tough question. But once the fuel debris is removed, the risks would fall dramatically.”

The Fukushima disaster had led to the shutdown of all of Japan’s reactors for stringent safety checks, forcing operators to import record amounts of coal and expensive LNG for power generation.

Tepco recently made a step forward in restarting its Kashiwazaki-Kariwa nuclear plant after clearing a key hurdle on quake projections. But its original goal to restart two reactors in 2014 has been indefinitely delayed due to time-consuming safety checks by the regulator.

Tepco posted a record recurring profit in the nine months to December, not relying on nuclear power generation, helped by the significant savings in fuel procurement and a lag of several months for the effect of falling energy prices to be passed on to consumers.

“It is difficult to post sustainable profits without nuclear power,” Hirose said, adding if oil spiked to $50 a barrel it would be worse off financially.

Ahead of the 8.1 trillion yen ($69 billion) retail power sector liberalization from April, Tepco anticipates that its lion’s share will be eroded. But it aims to complement that by entering other monopolies’ turfs, winning overseas power business and entering city gas business in future, he said.

Reporting by Osamu Tsukimori; Editing by Stephen Powell

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