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UPDATE1: Utilities hold shareholder meetings amid calls for management reforms.

TOKYO, June 27 Kyodo


Nine Japanese electricity companies held shareholder meetings Wednesday, with Tokyo Electric Power Co. and Kansai Electric Power Co. facing proposals for management reform from local governments in a rare move, as the electricity industry comes under closer scrutiny after the 2011 Fukushima nuclear accident.

Osaka Mayor Toru Hashimoto urged Kansai Electric to seek withdrawal from nuclear power generation and Tokyo Vice Gov. Naoki Inose called on Tokyo Electric to thoroughly implement management restructuring at a time when there is strong public opposition to the former utility's plan to reactivate two of its reactors and the latter utility's plan to raise electricity fees.

While there is little likelihood that the proposals from the Osaka city and Tokyo metropolitan governments will be adopted, the change in stance of the local governments from being silent shareholders to urging reforms is expected to affect the utilities' business outlook.

Other utilities also faced proposals from civic groups and other shareholders to decommission their reactors or abandon plans to construct new reactors amid heightened public concern over the safety of nuclear power after the accident at Tokyo Electric's Fukushima Daiichi nuclear power plant.

At Kansai Electric's shareholder meeting held at a theater in Osaka, Hashimoto urged the utility to abandon nuclear power in the near future, saying, "Now we are at a pivotal moment."

"We want management to seek a new energy supply system," said Hashimoto, who heads the Osaka city government, the largest shareholder in Kansai Electric Power Co. with a roughly 9 percent stake.

The management of the utility clearly opposed the proposal in its notice for the meeting sent to shareholders.

Its shareholder meeting attracted a great deal of attention, drawing a record 3,768 shareholders as of noon, given the planned reactivation of the reactors and a tougher power-saving request to residents and businesses in its service area this summer than in other regions.

On the power-saving request, Kansai Electric President Makoto Yagi said, "We deeply apologize for the serious trouble we would cause."

Tokyo Electric held a shareholder meeting in Tokyo, with Tokyo Vice Gov. Naoki Inose, who opposes the utility's plan to raise household electricity charges, attending as a representative of the Tokyo metropolitan government, the biggest shareholder in the utility with a roughly 2.7 percent stake as of March 31, 2012.

The Tokyo metropolitan government proposed Tokyo Electric promise to make customer service its priority in its articles of incorporation and improve management transparency, but the utility known as TEPCO opposes the idea.

To amend its articles of incorporation, two-thirds or more of the votes of the attending shareholders are required.

Other utilities that held shareholder meetings Wednesday were Hokkaido Electric Power Co., Tohoku Electric Power Co., Chubu Electric Power Co., Hokuriku Electric Power Co., Chugoku Electric Power Co., Shikoku Electric Power Co. and Kyushu Electric Power Co.

In fiscal 2011, which ended March 31, 2012, all nine utilities, excluding Chugoku Electric, whose dependency on nuclear power is relatively small, incurred group net losses, racking up increased fuel costs to boost thermal power generation to make up for the loss of nuclear power in the wake of the Fukushima nuclear accident.

Since the last operating reactor in Hokkaido was deactivated for routine checks in early May, all of the 50 operational commercial reactors have been idled amid heightened public concerns over the safety of nuclear power after the Fukushima nuclear crisis, triggered by the March 2011 massive earthquake and tsunami.

With the government giving the green light to the restart of two reactors at Kansai Electric's Oi nuclear power plant in Fukui on the Sea of Japan coast on June 16, the utility is preparing to put the reactors back online next month to ease power supply constraints.

At a shareholder meeting of Shikoku Electric, whose reactor at the Ikata plant in Ehime Prefecture is expected to be one of the reactors likely to be reactivated next, President Akira Chiba spoke of the need for nuclear power.

Meanwhile, 30 anti-nuclear shareholders proposed Shikoku Electric withdraw from nuclear power generation and promote renewable energy.
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Publication:Japan Energy Scan
Date:Jul 2, 2012
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