Tokyo Electric Power Company Holdings Inc., struggling to recover from the 2011 Fukushima nuclear crisis, is mulling halving its 45 domestic branches to streamline its businesses, sources close to the matter said Monday.
Through the consolidation of its power transmission and distribution operations in nine prefectures in eastern and central Japan, Tepco is eyeing the relocation of staff to new areas in order to improve profitability. The new areas include technology development and new strategy planning, the sources said.
The company is not planning to cut its workforce, with the remaining branches taking over the operations of realigned units. Tepco is likely to start gradually consolidating its operations in fiscal 2018.
With the growing use of smart meters which can automatically report monthly electricity usage and eliminate the need to check usage at every home, and drones that can be used for power cable inspections, Tepco expects to promote labor-saving and boost efficiency.
The firm aims to realign and integrate its nuclear, power transmission and distribution businesses with other utilities. Last month the company said it was in talks with its peers but nothing concrete has been announced.
The company hopes to quickly improve profitability through the streamlining as it faces increasing competition in the power sector following the full liberalization of Japan's electricity retail market.
In its business turnaround plan announced this year, the company said it will "streamline its administrative work through the merger of its branches," aiming to cut costs by some 50 billion yen ($440 million) in fiscal 2018 compared with fiscal 2016 by enhancing its power transmission and distribution operations.
On March 11, 2011, a powerful earthquake and subsequent tsunami crippled the seaside Fukushima Daiichi power station operated by Tepco in northeastern Japan, leading to nuclear meltdowns at three of its six reactors due to a loss of cooling water.
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