Japanese utility faces down protest to press ahead with atomic restarts
By JACOB ADELMAN AND EMI URABE | Bloomberg News | Published: June 26, 2014
TOKYO — Tokyo Electric Power Co. pledged to restart reactors at the world's largest atomic plant, rejecting a bid by anti-nuclear shareholders to scrap the units over safety concerns after the 2011 Fukushima disaster.
The company's annual general meeting voted down motions advanced by Greenpeace and other activist groups holding Tokyo Electric shares to decommission the reactors and to revise the company's recovery plan to exclude nuclear power.
The vote comes as Tokyo Electric, or Tepco, pursues a turnaround strategy that hinges on cutting fossil fuel costs by resuming two units at the Kashiwazaki-Kariwa nuclear plant in northwest Japan. Nuclear restarts anywhere in Japan are opposed by 59 percent of those who responded to a poll in March by the Asahi newspaper.
Tepco's board had recommended shareholders reject the measures, arguing the reactors provide an important source of baseload power without which the company can't meet customers' needs.
"We want shareholders to stand on our side, not the irresponsible company's side," Greenpeace campaigner Hisayo Takada said at a rally before the meeting, where activists held banners reading "No nuclear restarts!" and Tepco staff blocked entry to protesters in white-hooded protective coveralls and face masks.
The proposals were among 10 motions advanced by the consortium of anti-nuclear groups calling itself the Nuclear Phaseout Tepco Shareholder's Movement. Others included the appointment of nuclear opponents to Tepco's board, a halt to the construction of two reactors at the Higashidori plant in northern Japan and the improvement of working conditions at nuclear stations. All were rejected.
Tepco won support from the government and its biggest lenders in January for its plan to recover financially from the Fukushima disaster, which assumes the restart of the Kashiwazaki-Kariwa units in Niigata prefecture.
Banks, insurance companies and investment firms own more than 70 percent of Tepco's shares, according to data compiled by Bloomberg. Those majority shareholders would be expected to resist any effort to keep Tepco's nuclear plants shut, since many have also lent the company money under the expectation of a restart, Tom O'Sullivan, the founder of Tokyo-based energy consultant Mathyos, said before the vote.
"There's no way those guys are going to be voting for that," he said. "The bank support is predicated on them restarting Kashiwazaki."
Japan spent 27.4 trillion yen ($269 billion) on fossil fuels in 2013, up 50 percent from 18.1 trillion yen the year before the Fukushima disaster, according to Trade Ministry data.
About 160,000 people were forced to evacuate because of radiation fallout after the Fukushima accident, leaving Tepco with billions of dollars in compensation and cleanup costs that brought it to the brink of insolvency.
Tepco returned to operating profit last fiscal year, following two years of losses, after raising electricity rates and putting off maintenance at some of its plants.
All of Japan's 48 operable commercial reactors are idled for safety assessments after the accident at the Fukushima plant. Tepco applied for safety checks required for the two restarts at the Kashiwazaki-Kariwa plant in September.
Japan's Nuclear Regulation Authority said its inspections at the two units would be delayed due to the lack of qualified personnel, the Sankei newspaper reported this month.
The Kashiwazaki-Kariwa reactors are among seven units that will never be restarted due to local opposition and safety fears, Raymond James & Associates said in a June 19 research note. The governor of Niigata prefecture, who has a say in whether the units can resume, has criticized Tepco's safety record.
The only reactors likely to start this year are the two units at Kyushu Electric Power Co.'s Sendai plant in southern Japan, according to Raymond James. The NRA said in March that it would prioritize those units for safety checks.
The consortium of anti-nuclear groups at Thursday's meeting possessed more than the 300 shares needed to propose motions, according to Tepco's meeting announcement.
Greenpeace holds the minimum number of shares to vote on proposals, spokeswoman Ai Kashiwagi said. That minimum is 100, Tepco spokeswoman Mayumi Yoshida said. Tepco had an average of 1.6 billion shares of common stock outstanding during the year ended March 31, according to its annual report.
The only item approved was the appointment of Tepco's 11 directors. Tepco said 2,150 shareholders attended the meeting, which lasted for 3 hours and 23 minutes, at the Tokyo International Forum. Last year's meeting saw 2,090 attendees.