Now that the government of this blessed land has taken a majority stake in the technically bankrupt Tokyo Electric Power Company (TEPCO), phased in the replacement of the chairman and the president (E) and seen to a housecleaning of the board of directors. (E)
Many questions arise from the government's takeover as the main shareholder and appointer of executives and board members. What intrigues me is what will happen when the government and the new board members, particularly the outside board members, go through the books at TEPCO? Specifically, what are they going to find -- and once they find what they find, what are they going to do about what they find -- when they go through the accounts on how electricity costs are compiled?
From my understanding of the research done by Dr. Paul Scalise (and if Dr. Daniel Aldrich, if your research has identical findings, I apologize in advance for the sin of omission), a stunningly large fraction of the cost of TEPCO electricity cannot be explained by labor, capital or fuel costs. Indeed, if memory serves, the largest fraction of the costs of electricity is listed as simply "Other" -- and the amount listed in this category has remained unchanged, even as the costs of the various other inputs has either declined over time or has fluctuated in line with world energy prices.
What is this "Other"? To this point none of the electric power companies has been very upfront about the contents of this grab bag accounting entity. A certain fraction of this amount has always been assumed to have been payoffs to local communities, farming and fishing cooperatives and other business organizations with their facilities in the vicinity of power plants. Just how much of this other can be accounted for in this way is something the government can now, in theory find out, along with the rest of what has been lumped in to the category of "Other."
Of course, does the government want to know? Does it cut the subsidies to the local parasitic claimants, many of whom no longer can live and work in the vicinity of Fukushima Dai'ichi anyway, in order to lessen or forestall the rate hikes TEPCO has announced (E)? Do they keep them in place, as a sort of disaster recovery fund-by-default? Do they open up the accounts for public debate, or try to bury the truth in order to hide the complicity of regulators and politicians in the payouts? Or what if the government and the new board members find even more damaging reasons for the classing of certain costs as "Other"?
If the government owns TEPCO it not only owns company's problems but its secrets too.
What lies in between the covers of its account books?
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