Tepco targets $20 billion in cost cuts over 10 years

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By Yuka Obayashi Japan's Tokyo Electric Power TSE:9501 plans to cut about 3.1 trillion yen ($20 billion) in costs over 10 years through restructuring, while seeking alliances to advance reforms and capture demand from data centres, it said on Monday.The government has approved the utility's revised business plan, which includes raising about 200 billion yen over the next three years by selling assets. Known as Tepco, the operator of the Fukushima Daiichi nuclear power plant that suffered one of the world's worst nuclear disasters in 2011, faces mounting costs for decommissioning, the clean-up operation and compensation. It continues to rely on government funding to cover disaster-related costs."We will soon solicit proposals for alliances to carry out bold reforms that achieve both our responsibility to Fukushima and economic growth," President Tomoaki Kobayakawa told a press conference, adding Tepco would seek partners capable of growing with it.RISING DATA CENTRE DEMAND DRIVES QUEST FOR COLLABORATIONTepco has yet to achieve any major collaborations since it established JERA, its fuel and thermal power joint venture with Chubu Electric Power TSE:9502, in 2015.With rising electricity demand from data centres in Tokyo, however, the utility aims to provide power supply rapidly and capture digital demand by collaborating with firms focused on securing suitable sites, manufacturers and construction companies.The 3.1 trillion yen cost-cutting target comprises 1.4 trillion yen in personnel expenses, 1.3 trillion yen in equipment and 0.4 trillion in power supply.Assets that could be sold include equity stakes and real estate. The Nikkei newspaper reported Tepco could sell shares in electrical equipment company Kandenko TSE:1942, in which it holds a 46% stake. Kobayakawa declined to comment on specific assets.Tepco also forecast a net loss of 641 billion yen for the year ending in March, compared with a year-earlier profit of 161.2 billion yen, citing a one-off loss related to the Fukushima disaster. Tepco shares closed down 3.8%, underperforming the Nikkei index TVC:NI225, which fell 1.8%.REACTOR HALTED AFTER MALFUNCTIONThe utility targets recurring profit of 342 billion yen in fiscal 2034, up from 135 billion yen in fiscal 2024, assuming the No. 6 reactor at the Kashiwazaki-Kariwa nuclear power station restarts in fiscal 2025 and the No. 7 unit in fiscal 2029.I...

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