JERA: the venture with Tokyo Electric Power and the full transfer of domestic thermal generation (2019)

Taking scale, letting go of the power plants

What Chubu Electric handed over was more than 80% of its generation — its own power sources, which since the era of regional monopoly had been a utility's very reason for existing. Even so it insisted on the equal footing of a 50-50 venture, and bundled everything from fuel upstream to wholesale into a single company. The aim, it can be argued, was not to plug a deficit but to stand on the buying side of some 35 million tonnes of liquefied natural gas a year, with the bargaining power that implies.

Scale, though, had its price. In the year ended March 2022 the fuel-price spike inflicted a loss of $759.7M (¥83bn) on Chubu Electric Power Miraiz and sank the group to an ordinary loss of $540.2M (¥59bn). When the terms on which it buys electricity deteriorate, a company with no power plants has no means of absorbing the blow itself. And because it is a 50-50 venture, Chubu Electric cannot move JERA on its own authority either; at a 2024 earnings briefing came an explanation that it wanted to reconsider the very form of its shareholding. Five years after integration, the weight of what was given up in order to take scale is still being counted.