Tepco to sell power outside home turf

In what has been termed a shake-up in Japan’s power market, Tokyo Electric Power Co (Tepco) has announced plans to sell electricity outside its traditional service area.

The plans would see the utility selling power in the central Chubu and western Kansai regions in what analysts have termed a direct response to moves into its territory by rival utilities Kansai Electric Power Co and Chubu Electric Power Co. A Tepco spokesperson told the Reuters news service that the move is part of a strategy to use nationwide sales to help the firm recover from the 2011 Fukushima disaster.

The company is targeting ¥34bn ($327m) in annual sales from outside its home region in three years and ¥170bn in annual sales in 10 years, the spokesperson said.

Tepco’s new strategy comes as Japan’s government takes steps toward breaking up the nation’s regional power monopolies in order to boost competition and lower high post-Fukushima consumer electricity prices. Under the government’s plan, regional grids – now controlled by the local utilities – would be opened to new participants by 2015; residential power prices would be liberalized thereafter; and the big utilities would ultimately be split into generation and transmission companies.

Although it is Japan’s largest utility, Tepco has lost almost 10,000 big customers since last year and its reputation has failed to recover from widespread criticism of its handling of the Fukushima disaster. It was nationalized in 2012 and is still paying out compensation to affected parties.

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