Tokyo Electric Power

[Thriftville]

Recently, TEPCO has been under a lot of media spotlight... The bonds has been downgraded by S&P to junk status... Share price fall further to 320 yen.

I notice that a few electric companies are affected by this negative sentiment, which makes their share price rather attractive (price drop about 50%), i.e. Chugoku Electric, Chubu Electric Power, etc. These companies are hit by gov policy to shut down their nuclear plant temporarily, but not liable for other compensations that TEPCO faced.

Anyone has knowledge or interest in Jap power companies, please share your views.

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any idea if these funds are speculative in their purchase?

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Contrarian foreign funds buy into Tepco stock: report

(Reuters) - Leading foreign asset management firms, including Fidelity Investments and BlackRock, appear to have added significantly to their holdings of Tokyo Electric Power Co (Tepco) (9501.T) shares after the stock plunged in March, the Nikkei business daily said.

Fidelity's stake in Tepco, the operator of the Fukushima Daiichi nuclear power plant disabled by the March 11 earthquake and tsunami, grew by a factor of 13.5 to 1.83 million shares at the end of that month from just 130,000 shares at the end of December, the paper reported.

Tepco has been hit hard by the nuclear crisis and ratings agency Standard and Poor's cut its credit rating to junk status on Monday.

Fidelity may have seen Tepco as a bargain after the steep sell-off in the early days of the utility's nuclear crisis, the Nikkei said.

BlackRock's U.S. and U.K. arms raised their combined holdings by 19 percent to 13.74 million shares, while Vanguard's stake climbed 5 percent to 8.93 million shares, the daily said.

At this point, with no cap on its compensation liabilities for the nuclear meltdown, Tepco appears unlikely to offer shareholders dividends or other profit returns for a long time to come, the Nikkei said.

Its shares have remained stubbornly low, and, according to a trader at a foreign brokerage, foreign investors have been net sellers for the past month, the paper said.

(Reporting by Aftab Ahmed in Bangalore; Editing by Sriraj Kalluvila)

[RBM]

I spent the last decade+ of my working life dealing with the Japanese utilities - one of the few things I know anything about. So, herewith my two cents worth on the implications of the Tohoku Tsunami/Earthquake on Japanese Utilities ............. apologies for the length of what follows ........ but the aim of this piece is to lift a little of the mystique.

Context:
1. The Japanese utility companies are regional monopolies. In each region there is one electric power generation company and one town gas company. In Tokyo its Tepco and Tokyo Gas, in Osaka/Kyoto its Kansai Electric and Osaka Gas, in Nagoya its Chubu Electric and Toho Gas etc. etc. These utilities have no competition within their own patch so their customers are in all senses truly captive.
2. Much of these companies pricing to their end consumers is based on a pass-thru system with a time lag, effectively a "cost plus" system. All the big players have diverse supply energy sources: nuclear, gas (in the form of liquefied natural gas or LNG), oil, coal, etc.
3. The larger of these Companies are generally very well managed and their higher-paid-help is very well connected to their key stakeholders. The CEO's/President's are often viewed as "Regional Barons". Many of the senior managers are "parachuted in" from MITI.
4. The Japanese Utilities place very high priority on security of supply to their customers and they covet/insist on security-of-supply from their fuel providors - in return they are the most reliable bill-payers on the planet. This makes for long-standing mutually beneficial relationships with their key suppliers.
5. They also all place great importance on their financial strength and financial credentials. Despite (some of them) being more than moderately indebted, a quick review of these companies websites will highlight the strong focus they apply on their credit ratings.
6. ............ and they are big companies - thousands of employees, material market caps etc. "Big" does not apply to their dividend yields however, typically Japanese.

Following the Tohoku Tsunami .........
7. Tepco's share price has obviously been by far the hardest hit, due to the ongoing problems at their Fukushima plant, their PR mismanagement, and the huge uncertainties regarding compensation and other payments that they will eventually have to divvie up. Tepco has gone from a AA credit rating before the Tsunami to only two notches above junk status now, following several downgrades (S&P, long term foreign currency ratings).
8. But all other Japanese Utilities have also witnessed major share price hits and credit rating knocks, even those in the South West of the country, where there was no Tsunami damage. Chubu (Nagoya) is a special case - it has been obliged to shut down a major nuclear facility - Hamaoka - and it has, as a consequence, been hit harder than others. Clearly uncertainty regarding the Government's future perspective on Nuclear Power is weighing heavily on investors minds ............ but even the share prices of Gas reticulators have been hurt badly. While no one disputes the wide ranging and deep harm to the Japanese economy caused by the Tsunami tragedy, I am of the strong view that the credit rating degredations and share price hits have now gone too far. These companies are all paying their invoices, none have defaulted, and some of the gas companies are actually not seeing much in the way of major gas demand reductions. And remember that much of their costs can be eventually passed on to their consumers. The rebuilding exercise in North East Japan, will inevitably see an increased energy need - across Japan - in the medium term.
9. Going forward ........... clearly there will be less nuclear power generated than previously planned. I believe the Japanese will need to import more LNG - upto 10 million tonnes per year more - this at a time when Asian LNG supplies are struggling to keep up with demand - so the Japanese will need to pay more for their energy. Coal plants are already operating at high load factors and increased fuel oil imports go against Kyoto Protocol commitments - Japan, of all countries, must deliver on such "commitments", so it isn't simply a matter of importing more fuel oil and coal - fuels which are more polluting than natural gas.

So what does this mean for someone considering putting the odd dollar down ..........
10. My guess regarding the future of Tepco is no better than anyone elses. Sorry. Will they be nationalised a la JAL? Or will the Japanese Government "help" with compensation payments, determined to see them surivive in private hands. I am worried that we have not yet seen the bottom. I am not looking at Tepco, realising it possibly has the biggest upside - its just too much of a gamble for me.
11. Chubu Electric, Kansai Electric and Tokyo Gas are my favoured bets. Large, well managed companies with growing demand (after things get back on track in the wider economy). They have been hit too hard in the last 3 months, in my view. I fancy Chubu Electric to do well - Toyota City including their local contractors are in Chubu Electric's Nagoya capture area. I am looking at these three utilities myself but am not vested yet............ and I go into this realising I may have to be patient for a return.

[Thriftville]

Thanks a lot RBM for your valuable insights!

There have been rumours about possible nationalization of TEPCO & huge cost of compensation.
1. Nationalization - Banks has loaned about US$20b & the gov has setup a public-private entity to standby US$65b to assist TEPCO. From the gov actions so far, it doesn't seem like gov has plans to nationalize it. Probably TEPCO will suffer dilution by drawing cash from the special entity, when gov convert the preference share to common stock later. But so far, I haven't seen any announcement on how the special entity will do with the preference share.

2. Compensation - 80k people have been affected by the evacuation, TEPCO has paid US$12k per household. That cost about US$320m, assume 3 person per household. There are claims of hundreds of million by the Fishery association, etc. Not too sure how high the total claim going to be, but I believe it is likely to be less than US$3b.
So why the press claims that the compensation is huge? I search the internet and found an article about the possible reason for that -- if the compensation sum is claimed to be unlimited, then gov can openly inject huge amount of funds in the special entity. Instead of using the money for compensation, it could also be used to help TEPCO rebuild its power plants. TEPCO has partnered with Tohoku to complete a nuclear plant by 2017 at Higashodori region.
See link for full article http://globalresearch.ca/index.php?context=va&aid=24749


I also feel that Chubu and other power companies look much safer option compared to TEPCO. Gov is just temporarily closing down some of their plants for safety checks, which doesnt have long term liability like TEPCO.
Please feel free to share your views!

[RBM]

Thank you Thriftville - good input,

A. My concern about the breadth of claims against Tepco is not regarding the issues that have already been identified, such as fishermen and reloacted people, but rather the liabilities and long term issues which have not yet arisen or have been seen (and therefore haven't been quantified) - and I understand the meltdowns that have been experienced can have very long term adverse impacts. In summary, I feel there is a risk "we ain't seen anything yet" as regards the cash-out implications of the Fukushima crisis. I hope I am wrong.

B. Just to be clearer regarding the tail end of the woffle I cobbled together yesterday ......... for the investor, I would recommend a focus on the larger utilities, located south west of Tokyo. And I like Chubu Electric because they are very well managed, with good contingency plans in place and are located in the more vibrant Nagoya/Toyota City area. I believe there is a direct correlation between economic growth and energy growth - in the middle part of the last decade Toho Gas & Chubu Electric's (the two Nagoya utilities) supply growth was the highest overral of the Japanese Utilities. Tokyo Gas and Kansai Electric are the other two I'm eying up.

C. While some factories and plants in the Tohoku region were decimated by the Tsunami, I believe that reduction in Japanese Company earnings is only an interrim phenomena and that the long term robustness of the overral Japanese economy will not be impaired - this bodes well for the medium/long term for Japanese Utilities. As regards the short-term, there is the possibility of frustrating black-outs in the coming summer months - the "air conditioning peak" coupled with restricted power supplies - but clearly the situation is already much improved as compared to two months ago.

But there are three clusters of black clouds ..........

D. One potential worry for investors is a mooted Government review of Japan's Energy Policy and this may include addressing the way their utilities are organised. This may kick off soon. But I would consider it unlikely that the regional baronies I referred to would be broken up. I believe the key focus of this review will be on the reality that > 20% of the planets nuclear facilities are located in its most earthquake prone nation. Surely future nuclear plans will be scaled back by Japan's Government. And as I said yesterday, I can only surmise that the Utilities will then go for the alternative of (relatively clean) LNG. Japan is the world's largest LNG importer today, so this is far from a new energy source for them - but Australian & Middle Eastern LNG suppliers will go all out to secure high pricing for their product which is already struggling to keep up with Asian demand.

E. Another potential black cloud out there is the risk the Government will raise taxation levels in order to fund the massive reconstruction efforts, with its consequent adverse impact on domestic demand. My personal view on this is that the Government is weak and unpopular enough to do its darndest to avoid this. And if the current Government is toppled, its successor will also be very wary of raising taxation.

F. Another thing to ponder ............ yes, I see that some Contrarian type funds have aggressively invested into the troubled utilities and reportedly done so big time. These have been well reported in this thread. But this morning, by conincidence, I received in the mail the half-yearly 2011 report of JP Morgan's Japan Investment Trust (UK listed - I am vested in this). I found it striking that JP Morgan's portfolio of investments now does not include a single Japanese Utility. I'm puzzled.

G. Thats enough black clouds. Pre-Tsunami, the Japanese Stock Market was trading on an average PE Ratio of ~ 13. I do not believe there was gross over-valuation here and it is fair to say that this is a lower level than many other markets. There is potential for quite a rebound.

Dommo. Off for my afternoon shuffle.

[Thriftville]

Hey RBM, great info!

A. My concern about the breadth of claims against Tepco is not regarding the issues that have already been identified, such as fishermen and reloacted people, but rather the liabilities and long term issues which have not yet arisen or have been seen (and therefore haven't been quantified) - and I understand the meltdowns that have been experienced can have very long term adverse impacts. In summary, I feel there is a risk "we ain't seen anything yet" as regards the cash-out implications of the Fukushima crisis. I hope I am wrong.

That's a big risk to consider, because if TEPCO is unable to stop the meltdown reactors from leaking further, the cost is likely to spiral upwards. Any idea if the compensation for household, is it one-time payment or recurring until the disaster is over?

D. One potential worry for investors is a mooted Government review of Japan's Energy Policy and this may include addressing the way their utilities are organised. This may kick off soon. But I would consider it unlikely that the regional baronies I referred to would be broken up. I believe the key focus of this review will be on the reality that > 20% of the planets nuclear facilities are located in its most earthquake prone nation. Surely future nuclear plans will be scaled back by Japan's Government. And as I said yesterday, I can only surmise that the Utilities will then go for the alternative of (relatively clean) LNG. Japan is the world's largest LNG importer today, so this is far from a new energy source for them - but Australian & Middle Eastern LNG suppliers will go all out to secure high pricing for their product which is already struggling to keep up with Asian demand.

RBM, any idea if the cost of electricity by LNG is higher than nuclear? Not too sure if Wiki data is correct, LNG cost about the same as nuclear, see link Energy cost
Japan choose to use nuclear despite high risk and environmental cost, is it because they want to rely less on imported energy?
Will the profit of TEPCO be affected if they switch to rely more on LNG? (since they are able to pass the cost to consumers)

E. Another potential black cloud out there is the risk the Government will raise taxation levels in order to fund the massive reconstruction efforts, with its consequent adverse impact on domestic demand. My personal view on this is that the Government is weak and unpopular enough to do its darndest to avoid this. And if the current Government is toppled, its successor will also be very wary of raising taxation.

The drop in demand could be good for TEPCO, as TEPCO doesn't need to burn so much crude & fuel oil (expensive energy) to meet the industrial demand.
In 2008, after the Niigata earthquake, TEPCO is forced to produce electricity despite high oil price (about $150 per barrel). That cost them about US$8b a year. In that financial year, TEPCO net lost US$1.5b & amazingly it's still willing to pay dividend of 30Yen per share. Wonder why don't they conserve some cash?

F. Another thing to ponder ............ yes, I see that some Contrarian type funds have aggressively invested into the troubled utilities and reportedly done so big time. These have been well reported in this thread. But this morning, by conincidence, I received in the mail the half-yearly 2011 report of JP Morgan's Japan Investment Trust (UK listed - I am vested in this). I found it striking that JP Morgan's portfolio of investments now does not include a single Japanese Utility. I'm puzzled.

My guess is that JP has certain criteria set for this group of companies in the fund. Probably one of the criteria is that the company's credit rating cannot be junk. TEPCO is now junk, so gotta sell at all cost

Hope to hear your views!

[RBM]

Hello Thriftville - sorry to take so long to revert on this subject - I have been on my travels this past week.

Taking your points in turn.........

1. Tepco's Liabilities. The way I see it is that that there are currently no financial limits on Tepco's liabilities. Tepco has been perceived as misinforming the public so, in my personal opinion, I can not envisage that they have seen the back of material compensation payments. And the reality is Tepco have not fixed the problems at Fukushima yet - this could take much longer to sort out than Tepco has previously indicated, with further discharges of radioactive water to the sea etc. This will only increase Tepco's liability levels. However, my sense of the recent mood in Japan is that the Government will support Tepco and is leaning against nationalisation; recent Government Statements and news, which prompted a ~ 25% increase in Tepco's share price, indicates I am not alone in this view.

2. LNG vs. Nuclear. Undoubtedly the ongoing Fukushima crisis will directly and indirectly raise Japanese demand for Liquefied Natural Gas (LNG). Considering both the near term and the long term implications on LNG and nuclear demand in Japan ........
2.a. Near Term. The shutdown of Chubu Electric's 3.5 gigawatt Hamaoka nuclear power plant further increases Japan's near-term LNG supply needs. I have seen one respected consultant report this week which outlines estimates of incremental LNG demand rising by between 3 million tons to 7-9 million tons for the 12 months ending next March 2012. And there are clear signals power companies are no longer "sharing" excess power with each other - something that traditionally they have done. Hamaoka's closing was already a downer for Tepco - Chubu Electric Power Company will no longer send supply to Tepco's region. And, for example, Kansai Electric and Hokkaido Electric are no longer able to share their excess electricity, constrained by their own nuclear power plant maintenance activities and already-slim power reserve margins. So more LNG imports into Japan are needed in the near term - LNG which must be "diverted" from other markets - at a cost. Large scale diversions have yet to be seen but it is inevitable that this will happen - if not now then for sure during Japan's winter - again, this will be at a cost. And more LNG from the world's largest supplier, Qatar, will find its way to Japan over the coming months. So, getting to your specific question - we are already witnessing a marked increase in near term LNG price levels.
2.b. Longer Term. As stated in my earlier message - there is going to be a Government review of Japan's Energy Policy and I believe the key focus of such review will be on the reality that > 20% of the planets nuclear facilities are located in its most earthquake prone nation, i.e. Japan. I predict Japan's Government has no political choice but to materially scale back their future nuclear power plant plans. So, getting to your specific question - for LNG sales over the longer term this can only result in higher LNG prices, in a market which is already favouring LNG suppliers rather than buyers because of tight supplies.
2.c. The great majority of LNG sold into Japan is on multi-decade-long arrangements, with LNG prices linked to the oil price. The marker usually used is the so-called Japan Crude Cocktail price, basically the average price of Japan's daily crude imports. Google "Bloomberg Japan Crude Cocktail" - and you will see it quoted. Again, getting to your specific question - at high oil prices, electricity generated from LNG is more expensive than electricity gnerated from nuclear, at low oil prices its the other way round. Where is the cross-over point? I believe we are above it today, with prevailing oil prices at ~ US$ 100/bbl. An additional factor is the nature of nuclear power plant investments - huge up-front capital is required. So the question of which is the most cost effective also hinges on your discount rate. And please bear in mind that, as regards the implications for Japanese utilities, in most cases the cost of LNG can, after not-to-long-a-time, be passed onto the consumer - so I disagree with some commentators who state that a shift to LNG will in the longer term hit Japanese Utility profits - in the very near term yes, but not in terms of profit levels longer than about a year out - it will be neutral. LNG does not have the negative cache that nuclear does, so I believe the migration from nuclear to LNG as a fuel source is a good thing for Japan's utilities and their shareholders.
2.d. Fuel imports. Japan has to import practically all the fossil fuels it needs to power its economy - less than 1% is domestically produced. Please remember that uranium and the like also needs importing but shipments are no where near as often. And yes, Japan certainly pursues fuel diversification - both in terms of fuel type and the geographic source of the fuel.

3. Conserving cash. Way I look at this is ............ why sit on chunks of cash when I can borrow at sub 1% levels from Japanese Banks who can not afford to see my Company go down and with whom I have a very long term relationship? And not too long after the Kashiwazaki power plant shutdown, which was indeed very costly to Tepco, they could be practically assured that their cash incomes would significantly rise.

4. JP Morgan Investment Trust. I can see why some investment funds and unit trusts would want to avoid Tepco at the moment. But the last time I looked, Kansai Electric and Osaka Gas, for example, were AA- or equivalent credit ratings - better credit ratings than some of their other holdings.

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P.S. Just read this on the BBC website regarding Tepco's continued problems ..........

++++++++++++++++
Japan nuclear: Radiation halts water clean-up The radioactive water will be temporarily stored in special tanks when it is removed from the site.

Operators of Japan's Fukushima nuclear plant have suspended an operation to clean contaminated water hours after it began due to a rapid rise in radiation. Some 110,000 tonnes of water have built up during efforts to cool reactors hit by the 11 March earthquake and tsunami. The contaminated water, enough to fill 40 Olympic-sized swimming pools, has been at risk of spilling into the sea.

A spokesman for the plant operators said engineers were trying to find the cause of the jump in radiation levels. "The level of radiation at a machine to absorb caesium has risen faster than our initial projections," a spokesman for the Tokyo Electric Power Company (Tepco) said.

Earlier this week, officials had warned that the growing pools of radioactive water at the Fukushima Daiichi plant were in danger of spilling into the sea within a week.
+++++++++++++++

[Thriftville]

Hey RBM, no worries... thanks for your valuable time to explain on my queries! Your knowledge in this industry is superb!

1. Tepco's Liabilities. The way I see it is that that there are currently no financial limits on Tepco's liabilities. Tepco has been perceived as misinforming the public so, in my personal opinion, I can not envisage that they have seen the back of material compensation payments. And the reality is Tepco have not fixed the problems at Fukushima yet - this could take much longer to sort out than Tepco has previously indicated, with further discharges of radioactive water to the sea etc. This will only increase Tepco's liability levels. However, my sense of the recent mood in Japan is that the Government will support Tepco and is leaning against nationalisation; recent Government Statements and news, which prompted a ~ 25% increase in Tepco's share price, indicates I am not alone in this view.

Yeah, the disaster is likely to take quite a long time to resolve. And TEPCO is unable to shoulder the full cost of the incident without gov support.

The gov has approved the fund TEPCO via the public-private entity, with funding of about US$60b. Then, setup an insurance scheme so that each power company will contribute into a nuclear disaster fund, to help anyone who got hit by nuclear disaster in future. These schemes boost market confidence and pump up the share price.

The analysts have been predicting that gov will eventually take a stake in TEPCO, via conversion of common stock. That caused great panic. However, from gov actions so far, I see otherwise. (1) Jap banks loaned US$20b to TEPCO months ago. (2) Gov use public-private entity to fund TEPCO. When TEPCO takes money from the entity, preference share will be issued to gov. The interest rate on pref share is variable, based on the financial condition of TEPCO. If TEPCO is losing money, the interest rate could be zero. If gov has intention to take a stake in TEPCO, would it be easier if they do it directly, without the need to setup this public-private entity?

LNG vs. Nuclear.

Thanks for the explanation. Now I see the links!

2.b. Longer Term. As stated in my earlier message - there is going to be a Government review of Japan's Energy Policy and I believe the key focus of such review will be on the reality that > 20% of the planets nuclear facilities are located in its most earthquake prone nation, i.e. Japan. I predict Japan's Government has no political choice but to materially scale back their future nuclear power plant plans. So, getting to your specific question - for LNG sales over the longer term this can only result in higher LNG prices, in a market which is already favouring LNG suppliers rather than buyers because of tight supplies.

I'm quite surprised when Germany announced plans to shut down all nuclear power plant. On the contrary, China is ramping it up. Would Jap lose out in terms of cost efficiency in long run, if they rely too much on fossils (which has wider price swings)?

LNG will no doubt be in better demand in future, but Japan still needs to stick to the Kyoto protocol on carbon emission. Would it leave them with no choice, but to fall back on nuclear?

Furthermore, Japan benefits by promoting nuclear plants as they can make money by exporting the nuclear tech to the developing countries.

[RBM]

Thanks Thriftville,

1. I'm leaning towards the view that Japan's Government will not take a direct major share in Tepco let alone nationalise them - I don't believe the Government, which is unpopular enough, wants to bear the brunt of sustained criticism. By not taking over Tepco and by not taking a direct major share they keep their distance.

2. Nuclear Plants have prolonged lead times - take many years to get up and running and huge upfront capital outlays. And I wonder if Japanese banks will so readily finance nuclear plant construction going forward - I have my doubts. It takes no where near so long to build LNG Regasification Terminals. If Japan want's to meet its Kyoto Protocol "obligations" they need to focus on reducing coal and fuel oil in their energy mix, rather than LNG. Natural gas (from LNG) is the cleanest fossil fuel known to man.

3. As the world's developed economies (e.g. Germany, Italy) increasingly shun nuclear, I am not sure there is much value to be given to exporting nuclear expertise.

As an aside ............ a smaller Japanese Utility that I am running my eye over is Shizouka Gas Co. Ltd - a gas reticulation company, which supplies the cities of Fuji and Shizuoka. Smaller than Osaka Gas, Kansai Electric and Chubu Electric - the three I have mentioned before - but it has recently seen strong year-on-year demand growth. Something like 60% of the gas they sell is to gas fired power plants and to strong industrial companies - in the Shizuoka area these companies are predominantly gas rather than fuel oil or coal powered. Sizuoka Gas' larger shareholders include other bigger utilities and several Japanese banks; foreigners hold about 9% of shares. This morning the stock was trading at ~ ¥ 438 - one year ago it was ~ 40% higher and following the wake of the Tsunami it went down to ~ ¥ 360 but quickly came off that low. For a more detailed review than I can give, you may find the following web article interesting ..........

http://seekingalpha.com/article/260540-w...e-best-buy

Hope this helps. Off for a walk/shuffle.

[RBM]

Further to my post of yesterday ....... rom the BBC this morning. I think it is fair to say that Tepco stock is no longer for widows and orphans ........

++++++++++++++++++++++++++++++++++++++++++++++++++++++++
Moody's cuts Tepco credit rating, further cuts possible

Moody's Investor Service sharply cut Tokyo Electric Power's (Tepco) credit rating to junk status, as the operator of Japan's troubled nuclear power plant continues to struggle financially.

Moody's said it lowered Tepco's key rating four levels to B1 from Baa3. The ratings agency said the reasons were rising costs and compensation fees related to the nuclear disaster. Japan's government has proposed a support plan for Tepco, but faces opposition in Parliament.

"The latest downgrade reflects further escalation of costs and damages from the continuing Fukushima nuclear plant disaster and increased concern that government support measures may not completely protect creditors from losses," Moody's said in a statement. The ratings agency also downgraded Tepco's senior secured rating to Ba2 from Baa2 and said it had put the company on review for possible further downgrade.

In May, Standard and Poors also lowered Tepco's long-term rating. A lower rating from credit ratings agencies makes it more expensive to borrow for companies.

Tepco faces huge compensation costs to individuals and businesses. Thousands of people remain evacuated from the area surrounding the Fukushima power plant. The company reported a huge net loss of 1.25tn yen ($15.3bn; £9.4bn) in the year to the end of March. It was the largest loss in Japan's corporate history, excluding the financial sector.

[Thriftville]

Thanks RBM for the recommendation on Shizouka Gas! I'll keep it in my watchlist for any opportunity to buy.

Regarding TEPCO's credit rating, I think it will impact the share price, as more funds may consider selling it. Apart from that, TEPCO has already secured about US$80b from banks & gov to fund the power plant reconstruction, repair, victim compensation, alternate fuel (use crude oil to generate power), decommissioning and clean up cost. So probably the rating wouldn't affect its fund raising attempt in the near term?

In the recent quarter, TEPCO announced lost of US$15b. From the figures, it may look intimidating. But I think the media has overblown the issue.
Reason being, Fukushima nuclear plant is already 30 years old. Sooner or later, they have to be decommissioned (dismantle and make it safe for public). The cost of decom is about US$1b per plant over the span of 10 years. So, the total cost of 4 plants adds up to about $4b.

Besides, TEPCO has put a high provision for cleanup, repair and other cost, which have no immediate impact on cash flow.