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Press Release (Mar 04,2002)
Business Management Plan for FY2002
Today TEPCO announced its Business Management Plan for FY2002. 
This provides the targets for profits and financial improvements 
in order to reinforce our competitive strength. It also includes 
our plans for efficiency improvements, demand forecasting and power 
supply, aimed at achieving these targets. 
This is a concrete action plan to realize the goals of our management 
vision, which was formulated in March 2001. 
  TEPCO will strive to increase efficiency, seeking to reinforce 
management and competitiveness. In addition, TEPCO will lower 
electricity rates from this coming April, along with efforts to 
provide a wide variety of optional tariffs, and enhance customer 
service in order to meet overall customer satisfaction. In the 
continued pursuit of our mission as an electric utility, TEPCO 
dedicates itself to the promotion of a stable electricity supply, 
the preservation of resources and the environment, and the promotion 
of the optimal energy mix, in which nuclear power will play an 
essential role. 

1. We establish targets for corporate profit and financial 
improvements aimed at realizing the management vision 

TEPCO has set targets for corporate profits and financial 
improvements in order to realize our management vision. Details of 
TEPCO's business objectives (averaged over three years from FY2002 
to FY2004) are as follows: 
· Ordinary Income:  more than ¥300 billion 
· ROA (Return on Assets):  more than 4% 
· ROE (Return on Equity):  more than 9% 
· Free Cash Flow: more than ¥550 billion 
· Interest-bearing Debt: Reduction of more than ¥400 billion 
· Equity ratio: Approx. in the range of 17% ( at the end of FY2004) 

TEPCO will strengthen its management by implementing various 
measures such as the "TEPCO Group Business Management Cycle" to 
exploit the full resources of the group. The concrete business 
objectives (averaged over three years from FY2002 to FY2004) are as 
follows: 
· Consolidated ROA: more than 4% 
· Consolidated Free Cash Flow: more than ¥550 billion 

2. We aim to lower capital investment in FY2002 to less than 800 
billion yen for the first time in 25 years, by accelerating the pace 
of efficiency improvements. 

TEPCO will reduce capital investments by a flexible formulation of 
power system capability, which reflects the further deregulation of 
the electricity market and changes in electricity demand trends. In 
order to do so, we will not follow a precedent, but promote the 
optimization of designs and construction based on the condition of 
local communities or sites, along with the rationalization of design 
specifications, and the introduction and development of new technologies. 
We are committed to reduce our average yearly capital investments to 
less than approx. 740 billion yen for the period between FY2002 and 
FY2004. The target for FY2002 is 797.8 billion yen. It is the first 
time in the 25 years since 1977 that the capital investment plan has 
been lower than 800 billion yen. 
Over the three-year period from FY2002 to FY2004, average yearly 
maintenance costs will be reduced by 50 billion yen down to approx. 
480 billion yen, compared to the plan for FY2001 (approx. 530 billion 
yen from FY2001 to FY2003). While the high level of supply reliability 
is secured, TEPCO will implement maintenance which suits individual 
facilities, lengthen the inspection cycle, prioritize target facilities, 
and improve the efficiency of patrol and inspection procedures. This is 
achieved by data collection and by improving the ability to analyze in 
relation to facility evaluation. 

3. We challenge the four highest priorities for FY2002. 
     
TEPCO will focus on the following four priorities in FY2002, in line 
with the new management vision. 
(1) Ensuring customer satisfaction 
    In order to continue to be chosen by customers, we will lower 
  electricity rates this April, based on the results of efficiency 
  improvements made so far, as well as on the estimated effect of future 
  efficiency improvements. As an energy advisor, TEPCO will extend 
  proposal-based marketing,which has already been implemented for 
  extra-high-voltage customers who are eligible in the current 
    liberalized  electricity market, to high voltage customers. At the 
    same time, we will provide lower voltage customers with a wide 
  variety of optional tariffs and services. 

(2) Increased competitiveness and profitability 
    In order to adapt to growing competition in the energy market, TEPCO 
  will seek further streamlining efforts in such areas as management 
  procedures, procurement, and the construction, operation and 
  maintenance of facilities, in order to increase its competitiveness 
  and enhance the profitability of the group. 

    We regard deregulation of the electricity industry as a major 
  business opportunity to bring in a new source of profits. TEPCO 
  is also developing non-core activities and overseas businesses 
  which we expect to lead to further growth and expansion by 
  exploiting our management resources and the overall capabilities 
  of the group, which we have developed. 

(3) Keeping pace with the community and ensuring public confidence 
    We will pursue our mission as an electric utility in relation to 
  realizing the optimal mix of fuels, stable power supply and energy 
  security achieved by the vertically integrated system of generation, 
  transmission and distribution. At the same time, we will contribute to 
  achieving a better environment by taking autonomous and active 
  measures such as the prevention of global warming and the recycling 
  of industrial waste, in order to conserve resources and the 
  environment. 
     TEPCO strives to achieve further public confidence in nuclear energy, 
  and also to promote renewable energy by installing renewable 
  energy power generation facilities of its own, as well as utilizing 
  the "Green Funds System" and the "Green Power Certification System." 

(4) Promoting continuous change 
    Heading towards customer satisfaction, along with management efficiency, 
  we will reform organizational and management operations, such as the 
  merger of sales offices and field offices, which is scheduled to be 
  implemented from the summer of 2002. This will promote the autonomous 
  management of branch offices for the new era. 
    In addition, we will make further use of IT and further 
  strengthen R&D,leading to better customer satisfaction, 
  environmental preservation and efficiency improvements. 

4. We forecast that the average annual growth in electricity sales and 
 system peak load will beat an historical low by FY2011. 

  With stagnant economic growth, increasing competition with alternative 
 energy sources, and energy conservation, it is estimated that the growth 
 in electricity sales and the system peak load will decline. With maximum 
 marketing efforts, we project an average annual growth of 1.5% in 
 electricity sales (after temperature adjustments) and 1.4% in the system 
 peak load (after temperature and transient factor adjustments) from 
 FY2000 to FY2011. These rates are still lower than the previous ones 
 which TEPCO set at an all-time low level. The forecasts have been 
 reviewed downward for four consecutive years. 
  In these circumstances, TEPCO will develop additional capacity 
 of 15,790 MW over the next decade, pursuing efficient  facility
 construction by taking into account stable power supply,energy
 security and compatibility with the environment.
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