Can TEPCO Holdings’ operating companies be called “attractive assets”? What the report cards of its three sibling subsidiaries reveal about the reality behind “Good TEPCO”

TEPCO was reorganized into a holding company structure in 2016 and transitioned to Tokyo Electric Power Company Holdings (TEPCO HD). Its subsidiaries include EP, which handles electricity sales, PG, which manages the transmission and distribution network, and Tokyo Electric Power Company Fuel & Power, an intermediate holding company for JERA, a joint venture with Chubu Electric Power. In 2020, the renewable energy business was transferred to RP, completing the current structure.

While an alliance proposal has emerged to establish an intermediate holding company between the HD and its subsidiaries, questions remain as to whether the three companies have sufficient earnings power to stabilize TEPCO HD's finances. There are also expectations of a future IPO for JERA, making the question of whether these subsidiaries can be positioned as attractive assets a key focus.

Since the full deregulation of electricity sales, market conditions have increased the investment burden through inflation and data-center construction. The issue of new nuclear construction is also weighing on the industry, and attention is focused on how the current status of the three companies will affect the valuation of the HD's assets.

The feature will examine the true condition of TEPCO HD's three subsidiaries through their “report cards.” Alongside the surge in data-center demand, RP's potential to become a major earnings contributor and the challenges facing EP and PG are expected to emerge.