Company history

On 1 May 1951 the occupation’s Electric Utility Reorganization Order broke Japan’s wartime power monopoly into nine regional utilities, all created on the same day. Hokkaido Electric Power took over the assets of the Sapporo branch of Nippon Hassoden and of Hokkaido Haiden, receiving a regulated monopoly over the whole of Hokkaido on the same institutional terms as Tokyo Electric or Kansai Electric.

On one term, though, it was alone. Where the eight mainland utilities were wired to their neighbours and could lend and borrow power across a shared grid, Hokkaido was separated by the Tsugaru Strait with almost no transmission link to Honshu. Until the 600 MW Hokkaido–Honshu interconnector came into service in 1979, the island was in practice a self-contained system: every swing in demand and every plant failure had to be absorbed within the company’s own generating fleet. That single condition shaped nearly every investment decision that followed.

It listed in Sapporo in August 1951, on the First Section of the Tokyo Stock Exchange in February 1953, and in Osaka in 1962. Generation began hydro-led, but Hokkaido was one of Japan’s great coalfields, and stations were built close to the Sorachi and Kushiro pits. While Tokyo and Kansai began turning towards nuclear power in the early 1960s, Hokkaido Electric met the postwar demand boom on coal and water.

The company’s first oil-fired station, Tomakomai No. 1, started up in November 1973 — one month after the first oil crisis quadrupled the crude price. A planned sequel of some 6,000 MW of oil-fired capacity in the Tomato-East industrial zone was abandoned and rebuilt as a 950 MW coal project. Tomatoh-Atsuma No. 1 came online in October 1980 and was extended unit by unit; from No. 2 onward the design assumed imported coal, beginning a shift away from the domestic pits. Coal would define the company’s cost structure for the next several decades.

Coal was not purely an economic choice. As president Yotsuyanagi Takashige put it, fuel was not something the company could procure on commercial logic alone — being the anchor customer of a coal-producing region was a role assigned to it by the state and the prefecture, and one it accepted. The 1974 Niikappu pumped-storage station added the flexibility an isolated grid needs.

The third pillar took far longer. Planning for a nuclear station in Hokkaido had begun in 1968, and eleven years passed before the December 1979 construction licence for Tomari No. 1 — the obstacle was less local opposition in general than one specific element of the plan, a scheme to truck fuel and waste along a dedicated road from Iwanai port. Moving the site to coastal Tomari village in 1978 removed that road, and the fishery cooperatives that had refused shifted to conditional consent. Compensation was agreed in September 1981; main construction began in 1985.

Tomari No. 1 (579 MW) entered commercial operation on 22 June 1989 — the first nuclear plant in Japan to do so after the Chernobyl accident of April 1986, and it began under a petition of some 800,000 signatures against it submitted to the governor. Local consent had been won by changing the plan; prefecture-wide opinion could not be moved the same way. No. 2 followed in 1991 and No. 3 (912 MW) in December 2009, giving 2,070 MW in all and taking nuclear to roughly 40% of supply. Coal, hydro and nuclear now stood as three pillars, with oil in reserve.

Coal expanded in parallel: Tomatoh-Atsuma reached 1,650 MW with No. 4 in 2009 and generated around 40% of the company’s output, its fuel-price risk passed through to tariffs by long-term import contracts and the fuel-cost adjustment mechanism. Almost all of this capacity sat in the central Hokkaido region — efficient to operate, and geographically concentrated in a way nobody yet counted as a risk.

Earnings under rate-of-return regulation were steady but thin against shocks. Ordinary profit reached ¥57.2 billion in the year to March 2007, then fell to ¥33.0 billion, and in the year to March 2009 the post-Lehman recession and high crude prices produced the first loss in the company’s history. Hokkaido has less heavy industry than the mainland regions, so a fall in industrial demand cannot be offset by households — another consequence of a small, closed system. Around the core utility, the group built out affiliates in telecoms (HOTnet, founded 1989, wholly owned from 2006), construction and property.

After Fukushima the Tomari units went offline. No. 3 briefly restarted in August 2011 — the first commercial reactor to resume anywhere in Japan after the accident — but stopped for inspection in May 2012, and all three have been idle ever since. For a company drawing about 40% of its supply from nuclear, running replacement thermal plants flat out added fuel costs on the order of ¥100 billion a year. Ordinary losses ran four years in succession, peaking at $1.3B (¥128bn) in the year to March 2013 and totalling ¥242.5 billion; equity fell below 10% of assets. Tariffs were raised 7.73% in 2013 and a further 15.33% in 2014 without closing the gap. The restart application filed under the new safety standards has been held up for more than a decade over seismic and volcanic assessment, and as of 2025 no Tomari unit has restarted.

Then the concentration risk arrived. At 3:07 on 6 September 2018 a magnitude 6.7 earthquake struck near Tomatoh-Atsuma; three units tripped and about 40% of the island’s supply vanished at once. Eighteen minutes later all of Hokkaido — some 2.95 million households — went dark, Japan’s first system-wide blackout. Because the lost 1,650 MW station was larger than the 600 MW interconnector, no amount of mainland support could have filled the hole. The grid was restarted from hydro stations with black-start capability, reaching roughly 99% within two days and full restoration on 4 October.

The response was structural. The Ishikariwan-Shinko station, the company’s first LNG plant, began operating in February 2019, dispersing both fuel and geography. In April 2020 the transmission and distribution business was split off as Hokkaido Electric Power Network under the national unbundling requirement. And in March 2025, under president Saito Susumu — a career thermal-power engineer who had run Tomatoh-Atsuma — the company announced a plan to invest $17.0B (¥2.55tn) over the eleven years to fiscal 2035: safety works at Tomari, two more LNG units at Ishikariwan-Shinko, and over 3,000 MW of new renewables. The reason is demand. Rapidus’s advanced semiconductor fab at Chitose, due to reach volume production in 2027, alone needs roughly 600 MW — a tenth or more of the island’s consumption — and with data centres, Hokkaido demand is projected to run level with supply by the mid-2030s. A company created to keep an isolated island supplied now has to match generation to industrial siting, still without a working nuclear plant.