Utilities hold shareholder meetings amid calls for management reforms.
(EDS: TO BE LED)
Nine Japanese electricity companies held shareholders meetings Wednesday, with Tokyo- and Osaka-based utilities facing proposals for management reform from local governments in a rare move as the electricity industry becomes subject to closer scrutiny after the 2011 Fukushima nuclear accident.
The Osaka city government, the largest shareholder in Kansai Electric Power Co. with about a 9 percent stake, has proposed that the utility abandon nuclear power. The management of the utility, which is preparing to restart two of its idled reactors next month, has clearly opposed the proposal.
How other shareholders of Kansai Electric will react to the proposal is one of the focal points of the meeting at a theater hall in Osaka. Osaka Mayor Toru Hashimoto attended the meeting.
In Tokyo, Tokyo Electric Power Co. held a shareholders meeting at a gymnasium, 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 2.66 percent stake as of March 31, 2012.
The Tokyo metropolitan government has proposed Tokyo Electric promise to set customer satisfaction as its top priority and raise management transparency in its articles of incorporation, 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.
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 that held shareholders 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 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 nuclear crisis at Tokyo Electric's Fukushima Daiichi plant, crippled by the March 2011 massive earthquake and tsunami.
With the government giving the green light to reactivate 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.
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|Publication:||Japan Energy Scan|
|Date:||Jul 2, 2012|
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