- The trade and Industry Minister Yukio Edano approved a request for a 1 trillion yen injection
- In the 10-year plan, TEPCO has vowed to turn a profit by March 2014
- All of Japan's nuclear reactors are now offline for the first time in four decades
Reeling from the Fukushima Daiichi nuclear disaster, Tokyo Electric Power Co. (TEPCO) has effectively been nationalized after Tokyo approved a request for a 1 trillion yen ($12.5 billion) injection of capital.
TEPCO supplies power to nearly 30 million people in the Tokyo region and was once valued at more than $150 billion. But the nuclear disaster that followed Japan's historic earthquake and tsunami in March 2011 has left it dependent on government support.
The plan, approved by Trade and Industry Minister Yukio Edano Wednesday, would give the government control of more than 50% of the company, and could increase its hold to two-thirds of the company stock.
"Without the state funds, (TEPCO) cannot provide a stable supply of electricity," Edano told reporters at a news conference.
However, Edano hoped the government would relinquish control within two years if the restructuring plan successfully returns the company to profitability. "It will depend on how well TEPCO carries out restructuring measures," Edano told reporters.
In the 10-year plan, TEPCO has vowed to cut 3.3 trillion yen in costs and turn a profit by March 2014. The company has planned a 10% rate increase for electricity, which the government has yet to approve. The company also hopes to bring back some of its nuclear reactors online.
As of last weekend, all of Japan's nuclear reactors were offline for the first time in four decades as the Tomari Nuclear Power Plant's reactor 3 in Hokkaido was shut down for maintenance. In the wake of the Fukushima Daiichi nuclear disaster, reactors have not been allowed back on, making Japan now the first major economy to see the modern era without nuclear power.
The national government's ruling party, the Democratic Party of Japan, has been urging local communities to allow reactors to return to operation. The party's deputy policy chief, Yoshito Sengoku, bluntly said without nuclear energy the world's third-largest economy would suffer. "We must think ahead to the impact on Japan's economy and people's lives, if all nuclear reactors are stopped. Japan could, in some sense, be committing mass suicide," said the party's deputy policy chief, Yoshito Sengoku.
Japan's biggest business lobby, Keidanren, joined the plea in an April press conference. "We cannot possibly agree to do the kind of energy saving yet again this year, or every year from now on," said Chairman Hiromasa Yonekura, referring to the country's efforts to turn off air conditioners and shift operation of production lines to weekends. "The government must bring the nuclear power stations back into operation."
The tsunami that followed last year's magnitude-9 quake swamped the Fukushima Daiichi plant, knocking out power to cooling systems and leading to meltdowns in its three operating reactors. The resulting release of radioactivity forced residents of several towns near the plant to flee their homes, and a 20-kilometer (12.5-mile) zone around the plant remains closed to the public.