Tokyo Electric Power Company Holdings, Incorporated · TSE:9501
Tokyo Electric Power — Investor Presentation (January 2014)
80 slides from Tokyo Electric Power's investor presentation, Jan 15, 2014
Slide 1: New Comprehensive Special Business Plan
New Comprehensive Special Business Plan 15 January 2014
Slide 2: Contents
Contents １ 1. The Aim of Drafting the New Plan ・・・・・・・ P.03 (4) Intensification of initiatives for Fukushima (1) The Existing Comprehensive Special Business Plan Revitalization (2) Changes in the Business Environment Since the <1> Provision of a living environment for early Plan Was Drafted returnee
Slide 3: Contents
Contents 2 5. TEPCO’s Business Operation Plan ・・・・・・ P. 36 (5) Request for Cooperation from Financial Institutions (1) Basic policy on business operations and Shareholders (2) Policies aimed at management rationalization <1> Request for Cooperation from Financial <1> Further steps taken toward manag
Slide 4: Slide 4
Slide 5: 1. The Aim of Drafting the New Plan
3 1. The Aim of Drafting the New Plan (1) The Existing Comprehensive Special Business Plan (2) Changes in the Business Environment Since the Plan Was Drafted (3) Clarification of the Separation of the Roles of the National Government and TEPCO (4) The Framework of the New Comprehensive Special Busin
Slide 6: The Existing Comprehensive Special Business Plan
1. The Aim of Drafting the New Plan (1) The Existing Comprehensive Special Business Plan 4 The Comprehensive Special Business Plan (CSBP) was drafted in April 2012 as a "collection" of initiatives, aimed primarily at financing measures for TEPCO, that included: (1) National Government support; (2)
Slide 7: Changes in the Business Environment Since the Plan Was Drafted
1. The Aim of Drafting the New Plan (2) Changes in the Business Environment Since the Plan Was Drafted 5 The management environment predicated on the CSBP has changed significantly in the course of the 18 months since the plan was drafted, as summarized below, such that a thoroughgoing revision of
Slide 8: Separation of Roles of National Government and TEPCO (1)
1. The Aim of Drafting the New Plan (3) Clarification of the Separation of the Roles of the National Government and TEPCO 6 TEPCO is faced with an enormous financial burden that it cannot handle as a single company, and because the future outlook is still unclear, some issues are becoming evident,
Slide 9: Separation of Roles of National Government and TEPCO (2)
1. The Aim of Drafting the New Plan (3) Clarification of the Separation of the Roles of the National Government and TEPCO 7 [Extract of TEPCO-related items from the cabinet decision (20 December 2013) (2)] Clarifying the separation of the roles of the National Government and TEPCO -- Specific respon
Slide 10: The Framework of the New Comprehensive Special Business Plan (1)
1. The Aim of Drafting the New Plan (4) The Framework of the New Comprehensive Special Business Plan 8 Given such major changes in the business environment and in light of current Government decisions regarding the separation of roles from the National Government, the CSBP was completely revised a
Slide 11: The Framework of the New Plan (2)
1. The Aim of Drafting the New Plan (4) The Framework of the New Comprehensive Special Business Plan 9 2) Achieving both “responsibility and competitiveness" (1) Policies Management Policy towards Restoration (November 2012) New CSBP To fulfill our responsibilities from the accident and succeed in T
Slide 12: The Framework of the New Plan: Governance
1. The Aim of Drafting the New Plan (4) The Framework of the New Comprehensive Special Business Plan 10 4) The nature of governance (1) Policies i) In light of the Fund evaluation outcomes, to gradually transition from direct governance by the National Government or the Fund to governance via the ma
Slide 13: Initiatives (Points) in the New Plan -- 1
1. The Aim of Drafting the New Plan (5) Initiatives (Points) in the New Comprehensive Special Business Plan -- 1 11 "Accountability" initiatives "Competitiveness" initiatives Completion of measures in the Fukushima The creation of an energy business that is a leader in Revitalization Headquarter
Slide 14: Initiatives (Points) in the New Plan -- 2
1. The Aim of Drafting the New Plan (5) Initiatives (Points) in the New Comprehensive Special Business Plan -- 2 12 (1) Compensation for nuclear power damage TEPCO will provide compensation to every last person, irrespective of the increases in the compensation sum With an organization of around
Slide 15: Initiatives (Points) in the New Plan -- 3
1. The Aim of Drafting the New Plan (5) Initiatives (Points) in the New Comprehensive Special Business Plan -- 3 13 (3) Stable resolution and decommissioning of the damaged reactors and nuclear power safety Comprehensive implementation of both hardware and software solutions as well as measures to
Slide 16: Initiatives (Points) in the New Plan -- 4
1. The Aim of Drafting the New Plan (5) Initiatives (Points) in the New Comprehensive Special Business Plan -- 4 14 (5) Directions in business administration under the HD company system Holds the nuclear power business and group headquarters functions, including decommissioning and the Fukushima R
Slide 17: 2. Acceleration of Fukushima Revitalization
15 2. Acceleration of Fukushima Revitalization (1) Overall national guidelines for Fukushima revitalization (2) TEPCO initiatives for Fukushima revitalization
Slide 18: Overall national guidelines for Fukushima revitalization (1)
2. Acceleration of Fukushima Revitalization (1) Overall national guidelines for Fukushima revitalization 16 Cabinet decisions set out the overall policy for "accelerating the recovery of Fukushima from the nuclear power disaster, spearheaded by the Government" and for dealing with problems such as
Slide 19: Overall national guidelines for Fukushima revitalization (2)
2. Acceleration of Fukushima Revitalization (1) Overall national guidelines for Fukushima revitalization 17 (2) TEPCO initiatives for Fukushima revitalization [Extract of National Government policy from the cabinet decision (20 December 2013) (2)] 2) Completion of initiatives aimed at starting new l
Slide 20: Slide 20
Slide 21: 3. Compensation for nuclear power damage
18 3. Compensation for nuclear power damage (1) Status of nuclear power damage (2) Forecast for required compensation (3) Policy to ensure prompt and appropriate implementation of compensation payouts (“three pledges") (4) Intensification of initiatives for Fukushima Revitalization <1> Provision of
Slide 22: Status of nuclear power damage compensation
3. Compensation for nuclear power damage (1) Status of nuclear power damage 19 Until now, TEPCO has taken steps such as reviewing its systems development and compensation guidelines in response to the supplements to the interim guidelines set out by the Dispute Reconciliation Committee. Now, fur
Slide 23: Forecast for required compensation
3. Compensation for nuclear power damage (2) Forecast for required compensation 20 The 4th supplement to the interim guidelines outlined guidelines for compensation for housing guarantees and for psychological stress associated with prolonged evacuation orders, requiring new measures aimed at prov
Slide 24: Policy for prompt and appropriate compensation payouts
3. Compensation for nuclear power damage (3) Policy to ensure prompt and appropriate implementation of compensation payouts 21 (“three pledges") In accordance with the "five promises", TEPCO will actively accelerate its "sincere and respectful compensation" by taking steps such as making the appli
Slide 25: The "three pledges" on compensation
3. Compensation for nuclear power damage (3) Policy to ensure prompt and appropriate implementation of compensation payouts 22 (“three pledges") As a first step towards the speedy livelihood rehabilitation for accident victims, TEPCO now makes the “three pledges" below, which encompass its current
Slide 26: Provision of a living environment for early returnees
3. Compensation for nuclear power damage (4) Intensification of initiatives for Fukushima Revitalization 23 <1> Provision of a living environment for early returnees Intensive introduction of human and technological resources directed towards early return Provision of an environment conducive to w
Slide 27: Global center for advanced decommissioning technology concept
3. Compensation for nuclear power damage (4) Intensification of initiatives for Fukushima Revitalization 24 <2> Creating an industrial base and employment opportunities Global center for advanced decommissioning technology concept Multiple new industrial facilities and research and development fac
Slide 28: Creating industry and employment through coal-fired power plant
3. Compensation for nuclear power damage (4) Intensification of initiatives for Fukushima Revitalization 25 <2> Creating an industrial base and employment opportunities Creating industry and employment through the construction of the world's most advanced high-efficiency coal-fired power plant In
Slide 29: Enhanced Fukushima Revitalization Headquarters functions
3. Compensation for nuclear power damage (4) Intensification of initiatives for Fukushima Revitalization 26 <3> Enhanced Fukushima Revitalization Headquarters functions Relocation of the Fukushima Revitalization Headquarters to the evacuation zone The Fukushima Revitalization Headquarters will be
Slide 30: Slide 30
Slide 31: 4. Stable resolution and decommissioning of damaged reactors and nuclear power safety
27 4. Stable resolution and decommissioning of the damaged reactors and nuclear power safety (1) Promotion of the safe and steady decommissioning of the Fukushima Daiichi nuclear power station <1> Consideration of the problems of contaminated water and tanks and future measures <2> Responses to requ
Slide 32: Contaminated water and tanks problems and future measures
4. Stable resolution and decommissioning of the damaged reactors and nuclear power safety (1) Promotion of the safe and steady decommissioning of the Fukushima Daiichi nuclear power station 28 <1>Consideration of the problems of contaminated water and tanks and future measures Faced with ongoing p
Slide 33: Emergency Safety Measures for contaminated water
4. Stable resolution and decommissioning of the damaged reactors and nuclear power safety (1) Promotion of the safe and steady decommissioning of the Fukushima Daiichi nuclear power station 29 <1>Consideration of the problems of contaminated water and tanks and future measures To speed up and impr
Slide 34: Additional countermeasures for contaminated water
4. Stable resolution and decommissioning of the damaged reactors and nuclear power safety (1) Promotion of the safe and steady decommissioning of the Fukushima Daiichi nuclear power station 30 <1>Consideration of the problems of contaminated water and tanks and future measures The Nuclear Emergenc
Slide 35: Responses to requests by the National Government
4. Stable resolution and decommissioning of the damaged reactors and nuclear power safety (1) Promotion of the safe and steady decommissioning of the Fukushima Daiichi nuclear power station 31 <2> Responses to requests by the National Government TEPCO takes the Prime Minister's requests very serio
Slide 36: Building an international decommissioning promotion system
4. Stable resolution and decommissioning of the damaged reactors and nuclear power safety (1) Promotion of the safe and steady decommissioning of the Fukushima Daiichi nuclear power station 32 <3> Building an international decommissioning promotion system TEPCO will set up its own decommissioning
Slide 37: Steady decommissioning over the medium- to long-term
4. Stable resolution and decommissioning of the damaged reactors and nuclear power safety (1) Promotion of the safe and steady decommissioning of the Fukushima Daiichi nuclear power station 33 <4> Steady decommissioning over the medium- to long-term TEPCO starts removing fuel rods from the Unit 4
Slide 38: Assuring nuclear power safety (1)
4. Stable resolution and decommissioning of the damaged reactors and nuclear power safety (2) Assuring nuclear power safety 34 In September 2012, TEPCO set up the Nuclear Reform Special Task Force, headed by the TEPCO President, to promote reform under the monitoring and supervision of the Nuclear
Slide 39: Assuring nuclear power safety (2)
4. Stable resolution and decommissioning of the damaged reactors and nuclear power safety (2) Assuring nuclear power safety 35 In terms of software, we are rebuilding the safety culture and upgrading management by objectives, working towards an ideal for each countermeasure that we must continue t
Slide 40: Slide 40
Slide 41: 5. TEPCO's Business Operation Plan
36 5. TEPCO’s Business Operation Plan (1) Basic policy on business operations (2) Policies aimed at management rationalization <1> Further steps taken toward management rationalization <2> Personnel reforms (revamp personnel management system to encourage early retirements, organizational flattening
Slide 42: Basic policy on business operations
5. TEPCO’s Business Operation Plan (1) Basic policy on business operations 37 Based on the principle of seeking to address both its accountability and the maintaining of competitiveness, TEPCO through the TEPCO Group as a whole will work to fulfill its obligations with respect to compensation, dec
Slide 43: Further steps taken toward management rationalization
5. TEPCO’s Business Operation Plan (2) Policies aimed at management rationalization 38 <1> Further steps taken toward management rationalization As a response to the assessment of rates, work to reduce all costs including those for fuel, reconditioning, depreciation expenses, etc. on the order of
Slide 44: Breakdown of cost reductions under New Comprehensive Plan
5. TEPCO’s Business Operation Plan (2) Policies aimed at management rationalization 39 <1> Further steps taken toward management rationalization [Breakdown of cost reductions under New Comprehensive Plan] (¥100 millions) New Comprehensive Plan Comprehensive Plan (FY2013- FY2022) After period adjustm
Slide 45: Procurement reforms and competitive procurement
5. TEPCO’s Business Operation Plan (2) Policies aimed at management rationalization 40 <1> Further steps taken toward management rationalization Push forward with "procurement reforms" using outside parties to investigate each and every major investment and expense and dig deep with cost cutting t
Slide 46: Managerial accounting and cost structure reforms
5. TEPCO’s Business Operation Plan (2) Policies aimed at management rationalization 41 <1> Further steps taken toward management rationalization Introduce managerial accounting as a way of completely rethinking the attitude toward costs in daily business with the goal of cost structure reforms.
Slide 47: Sale of assets and subsidiary and affiliate rationalization
5. TEPCO’s Business Operation Plan (2) Policies aimed at management rationalization 42 <1> Further steps taken toward management rationalization Regarding the sale of assets, the objective set in the Comprehensive Plan to sell during the 3-year period through FY2013 707.4 billion yen worth of real
Slide 48: Personnel reforms (1)
5. TEPCO’s Business Operation Plan (2) Policies aimed at rationalizing management <2> Personnel reforms (revamp personnel 43 management system to encourage early retirement, flattening of organization, and cost reductions) Based on the Comprehensive Plan, etc., cut staff, reduce salaries (30% for
Slide 49: Personnel reforms (2)
5. TEPCO’s Business Operation Plan (2) Policies aimed at rationalizing management <2> Personnel reforms (revamp personnel 44 management system to encourage early retirement, flattening of organization, and cost reductions) Expect to meet the Comprehensive Plan's staff cutting objectives (by 7,400
Slide 50: Personnel reforms: organizational flattening
5. TEPCO’s Business Operation Plan (2) Policies aimed at rationalizing management <2> Personnel reforms (revamp personnel 45 management system to encourage early retirement, flattening of organization, and cost reductions) Flatten out the organization during FY2014 and FY2015 through introduction
Slide 51: Personnel reforms: management system
5. TEPCO’s Business Operation Plan (2) Policies aimed at rationalizing management <2> Personnel reforms (revamp personnel 46 management system to encourage early retirement, flattening of organization, and cost reductions) Improve personnel management system for employees in Fukushima who are hand
Slide 52: Introduction of holding company structure (1)
5. TEPCO’s Business Operation Plan (3) Create revenue base for ongoing revitalization <1> Introduction of holding company structure 47 (advanced implementation of decoupling of generation and transmission of electricity) In order to take end-to-end responsibility for the accident while implementin
Slide 53: Introduction of holding company structure (2)
5. TEPCO’s Business Operation Plan (3) Create revenue base for ongoing revitalization <1> Introduction of holding company structure 48 (advanced implementation of decoupling of generation and transmission of electricity) With the holding company at the core, be resolute in taking end-to-end respon
Slide 54: Strategic investments and competitive business operations (1)
5. TEPCO’s Business Operation Plan (3) Create revenue base for ongoing revitalization 49 <2> Make strategic investments and engage in competitive business operations TEPCO will need, on an ongoing basis, to fulfill its obligations in terms of compensation, decommissioning, assisting with reconstru
Slide 55: Strategic investments: reallocation of investment
5. TEPCO’s Business Operation Plan (3) Create revenue base for ongoing revitalization 50 <2> Make strategic investments and engage in competitive business operations The financial resources generated through investment reductions are expected to contribute to improving TEPCO's competitiveness and
Slide 56: Strategic investments: boosting corporate value
5. TEPCO’s Business Operation Plan (3) Create revenue base for ongoing revitalization 51 <2> Make strategic investments and engage in competitive business operations In order to curb public burden, even more in-depth measures are needed to boost corporate value. In an environment of deregulation
Slide 57: Growth Strategy of the Fuel & Power Company (1)
5. TEPCO's Business Operation Plan (3) Building a Revenue Base for Sustained Reconstruction 52 <3>Growth Strategy of the Fuel & Power Company (FPC) The key mission of the FPC is to strategically reduce fuel procurement costs, which account for 90% of the power generation costs With the leadershi
Slide 58: Growth Strategy of the Fuel & Power Company (2)
5. TEPCO's Business Operation Plan (3) Building a Revenue Base for Sustained Reconstruction 53 <3>Growth Strategy of the Fuel & Power Company (FPC) The company will increase its LNG procurement volume to 35 to 40 million tons per annum by comprehensive business alliance. In addition to receiving 1
Slide 59: Growth Strategy of the Fuel & Power Company (3)
5. TEPCO's Business Operation Plan (3) Building a Revenue Base for Sustained Reconstruction 54 <3>Growth Strategy of the Fuel & Power Company (FPC) In the short term, the company will (i) achieve permanent cost reductions, and (ii) pursue a steadfast development of new power stations now being bui
Slide 60: Growth Strategy of the Fuel & Power Company (4)
5. TEPCO's Business Operation Plan (3) Building a Revenue Base for Sustained Reconstruction 55 <3>Growth Strategy of the Fuel & Power Company (FPC) The company will extensively enhance its optimization and trading operations so as to develop systems that expand its capacity to respond to fluctuati
Slide 61: Power Grid Company Neutrality and Investment Strategy (1)
5. TEPCO's Business Operation Plan (3) Building a Revenue Base for Sustained Reconstruction 56 <4> Power Grid Company Neutrality and Investment Strategy Working on a premise of stable supply and the assurance of safety and product quality, the company will continue to generate the resources needed
Slide 62: Power Grid Company Neutrality and Investment Strategy (2)
5. TEPCO's Business Operation Plan (3) Building a Revenue Base for Sustained Reconstruction 57 <4> Power Grid Company Neutrality and Investment Strategy Through initiatives such as helping to establish the Organization for Nationwide Coordination of Transmission Operators (FY2015), the company wil
Slide 63: Power Grid Company Neutrality and Investment Strategy (3)
5. TEPCO's Business Operation Plan (3) Building a Revenue Base for Sustained Reconstruction 58 <4> Power Grid Company Neutrality and Investment Strategy Beginning with initiatives such as using inter-regional tie lines, the company will lead the way in the transition to a framework that efficientl
Slide 64: Power Grid Company: smart meter installation
5. TEPCO's Business Operation Plan (3) Building a Revenue Base for Sustained Reconstruction 59 <4> Power Grid Company Neutrality and Investment Strategy The smart meter installation program has been moved up 3 years, with meters to be installed throughout the entire TEPCO customer area by FY2020.
Slide 65: Growth Strategy of Customer Service Companies (Retailers) (1)
5. TEPCO’s Business Operation Plan (3) Development of a Revenue Base toward Sustainable Revitalization 60 <5> Growth Strategy of Customer Service Companies (Retailers) TEPCO will aim to become a futuristic infrastructure company that proposes the most efficient energy use for each customer and pro
Slide 66: Growth Strategy of Customer Service Companies (Retailers) (2)
5. TEPCO’s Business Operation Plan (3) Development of a Revenue Base toward Sustainable Revitalization 61 <5> Growth Strategy of Customer Service Companies (Retailers) An environment will be created where customers can feel secure about using energy, by aiming to minimize energy cost as a whole (e
Slide 67: Growth Strategy of Customer Service Companies: Electricity Housekeeping Book
5. TEPCO’s Business Operation Plan (3) Development of a Revenue Base toward Sustainable Revitalization 62 <5> Growth Strategy of Customer Service Companies (Retailers) The “Electricity Housekeeping Book”* will be enhanced to offer knowledge about optimal rate plan selections and the benefits of en
Slide 68: Measures for Clarification of Management Responsibility
5. TEPCO’s Business Operation Plan (4) Measures for Clarification of Management Responsibility 63 TEPCO switched its management framework to a committee governance structure in June 2012. The Board of Directors, composed of a majority of external members, engage in the formulation of new managemen
Slide 69: Request for Cooperation from Financial Institutions
5. TEPCO’s Business Operation Plan (5) Request for Cooperation from Financial Institutions and Shareholders 64 <1> Request for Cooperation from Financial Institutions with an Eye to Fund Procurement after Liberalization Taking into consideration the government’s role in nuclear decommissioning, de
Slide 70: Request for Cooperation from Shareholders
5. TEPCO’s Business Operation Plan (5) Request for Cooperation from Financial Institutions and Shareholders 65 <2> Request for Cooperation from Shareholders Shareholders are asked to respond to the following cooperation requests toward minimization of public burden and achievement of the goals of
Slide 71: Ensuring Steady Execution of the Special Business Plan
5. TEPCO’s Business Operation Plan (6) Ensuring Steady Execution of the Special Business Plan 66 Until certain progress is verified in the “management evaluation concerning responsibility and competition,” the Fund will directly support the promotion of management reform from within TEPCO through
Slide 72: Slide 72
Slide 73: 6. Items relating to the assessment of assets and income and expenditure situation
67 6. Items relating to the assessment of assets and income and expenditure situation (1) Supply-demand & income-expenditure projections <1> Supply-demand projections <2> Income-expenditure projections (2) Assessment of investment and income-expenditure conditions
Slide 74: Supply-demand projections: power sold
6. Items relating to the assessment of assets and income and expenditure situation 68 (1) Supply-demand & income-expenditure projections <1> Supply-demand projections As a result of intensifying competition due to the broad deregulation as of FY2016 and the construction of new power sources for ne
Slide 75: Supply-demand projections: power supply development
6. Items relating to the assessment of assets and income and expenditure situation 69 (1) Supply-demand & income-expenditure projections <1> Supply-demand projections TEPCO will maintain the power supply and demand balance through measures including 2.6 million kW power supply tenders. Depending
Slide 76: Income-expenditure projections
6. Items relating to the assessment of assets and income and expenditure situation 70 (1) Supply-demand & income-expenditure projections <2>Income-expenditure projections As a result of emergency cost cutting, an operating profit of 99.7 billion yen will be returned in the period to March of 2014.
Slide 77: Income-expenditure projections excluding Kashiwazaki-Kariwa Units 2, 3 and 4
6. Items relating to the assessment of assets and income and expenditure situation 71 (1) Supply-demand & income-expenditure projections <2>Income-expenditure projections / (2) Assessment of investment and income-expenditure conditions [Excluding Kashiwazaki-Kariwa nuclear power station Units 2, 3 a
Slide 78: Income-expenditure projections including Kashiwazaki-Kariwa Units 2, 3 and 4
6. Items relating to the assessment of assets and income and expenditure situation 72 (1) Supply-demand & income-expenditure projections <2> Income-expenditure projections / (2) Assessment of investment and income-expenditure conditions [Including Kashiwazaki-Kariwa nuclear power station Units 2, 3
Slide 79: 7. Financial Aid Details / 8. Financial Status of the Fund
73 7. Financial Aid Details (1) Amounts & Details of Financial Aid Supplied to TEPCO (2) Items relating to funding the cost of government bonds to be provided and other financial aid 8. Financial Status of the Fund
Slide 80: Amounts & Details of Financial Aid Supplied to TEPCO
7. Financial Aid Details 8. Financial Status of the Fund 74 [Amounts & Details of Financial Aid Supplied to TEPCO] The Fund will provide funding totaling 4,788,844 million yen, comprising the 4,908,844 million yen in compensation measures estimated for compensation payouts, minus the 120 billion y
Tokyo Electric Power Company Holdings — Investor Presentation (January 2014) on 6ix