Unbundling transmission and retail, and moving to a holding-company structure (2020)

Separating, and earning

What the law required was the carve-out of transmission and distribution — not a separate legal entity for retail, and not a move to a holding company. Chubu Electric went beyond the requirement, splitting off Chubu Electric Power Miraiz and turning the parent into a holding company responsible for group management, the Hamaoka plant and new businesses. President Kingo Hayashi's target — half of a consolidated ordinary profit of $2.3B (¥250bn) in the second half of the 2020s to come from outside the electricity business — put a number on the posture of treating electricity as one business among many.

Yet in the first year of separation, the year ended March 2021, Miraiz carried revenue of $22.1B (¥2.36tn) and earned only $355.9M (¥38bn) — less than the $550.7M (¥59bn) earned by Power Grid on under a seventh of the revenue. Making the competitive business a company of its own did not make it immediately capable of earning. Nor is the reach beyond electricity, such as taking control of Nippon Escon, anywhere near the scale required to supply half the profit. Separating legal entities can clarify where responsibility lies; it does not, on this evidence, reach as far as creating earning power itself.