Divestiture of TEPCO for reparation for the Fukushima nuclear accident–A path to vertical unbundling

The Fukushima Daiichi Nuclear Power Station held by Tokyo Electric Power Company (TEPCO) had a serious nuclear accident in March 2011. TEPCOʹs liability for the losses caused by this accident is speculated to reach several trillion yen. For this compensation, TEPCO is supposed to sell its assets, including those for its power business. Their sales are crucial for its solvency. We estimate the fundamental values of TEPCOʹs thermal plants by modeling their plant operation patterns based on spot market prices and fuel costs. Then, we discuss the implication of their divestiture for TEPCOʹs reparations in the context of the regulatory reforms as a radical path to unbundling, which has not yet been achieved due to the strong resistance from the incumbents.