Hokkaido Electric Power Company, Incorporated
9509・Prime Market・Electric Power & Gas
Business
Hokkaido Electric Power Co., Inc. was established in 1951 and serves as the holding-type core company of Hokkaido's sole comprehensive electric power group (the Hokuden Group). The group consists of Hokkaido Electric Power (Power Generation & Retail Electricity Business), which handles power generation and retail electricity business; Hokkaido Electric Power Network, which handles the general transmission and distribution business; and 13 group companies handling peripheral services such as construction, telecommunications, and engineering. Its main customers are residential, industrial, and commercial demand users within Hokkaido, and it supplies a retail electricity sales volume of 22,118 million kWh (FY2026 (ending March 2026)). In recent years, the company has been capturing increased electricity demand associated with the location of GX industries in Hokkaido, such as next-generation semiconductor plants and large-scale data centers.
Business Model
The majority of revenue consists of lighting and power charges (¥564,543 million) and inter-regional and third-party sales power charges (¥163,606 million). The transmission and distribution segment has a stable revenue base underpinned by regulated tariffs (wheeling revenue of ¥52,339 million), while the power generation and retail segment has a mechanism to pass fuel price fluctuations through to tariffs via the fuel cost adjustment system. The group adopts a vertically integrated structure in which in-house construction, telecommunications, and engineering companies handle power infrastructure development internally, enhancing cost efficiency.
Company Strengths
Hokkaido Electric Power Network Co., Ltd. exclusively operates the general transmission and distribution business across all of Hokkaido, securing stable revenue (net sales of ¥322,949 million) through regulated tariffs. While legal separation ensures neutrality, the company continues grid development investment (capital expenditure of ¥82,202 million) and holds physical infrastructure that is difficult for competitors to replicate.
Hydroelectric power generation volume for FY2026 (ending March 2026) was 3,646 million kWh, up 21.9% year on year (water inflow ratio of 103.6%). Hydroelectric power is a low-cost power source with zero fuel costs, and when the water inflow ratio is favorable, the resulting fuel cost savings directly contribute to profit. The company continues hydroelectric capital investment of ¥6,723 million, aiming to maintain long-term generation capacity through replacement and other measures.
Thirteen group companies, including Hokuden Kogyo, Hokkai Denko, and Hokkaido Power Engineering, provide power infrastructure construction, maintenance, and information/telecommunications services in-house. The Others segment recorded net sales of ¥175,717 million (external customer sales of ¥37,870 million) and ordinary income of ¥19,057 million, indicating a high profit contribution and a structure with potential for revenue expansion when intra-group demand increases.
ENVALITH's Perspective
Performance Trend
Revenue was ¥855,983 million (down 5.1% year-on-year), marking the second consecutive year of revenue decline. The main cause was a decrease in fuel cost adjustment amounts due to falling fuel prices. Operating profit was ¥73,238 million (down 3.4% year-on-year), a relatively modest decline, but profit attributable to owners of parent fell sharply to ¥43,998 million (down 31.5% year-on-year). The main cause was a steep drop in gains from the sale of nuclear fuel, which plunged to ¥1,206 million from ¥19,549 million recorded in the previous period. As external factors, an expansion of the timing-related gain from the fuel cost adjustment system and an increase in hydroelectric power generation volume supported ordinary income, while rising costs related to the restart of the Tomari Nuclear Power Station, labor costs, prices, and interest rates squeezed profitability. Looking at the five-year trend, the company rebounded sharply from a loss in FY2023 (ending March 2023) (operating loss of ¥22,530 million), peaked in FY2024 (ending March 2024) (operating profit of ¥101,155 million), and has since declined for two consecutive periods. For FY2027 (ending March 2027), the timing effect of the fuel cost adjustment system is expected to reverse into a timing-related loss, leading to a further deterioration with ordinary income projected at ¥30,000 million.
Growth Strategy
Pursuing sustainable growth toward 2035 under the three themes of realizing GX, creating new value, and strengthening management foundations.
Aiming for restart while continuing to respond to the Nuclear Regulation Authority's review. Once restart is realized, significant improvement in earnings is expected through a substantial reduction in fuel costs. In FY2026 (ending March 2026), the capacity utilization rate remained at zero, and restart-related costs continue to weigh on earnings.
A core initiative in power source development toward realizing carbon neutrality. Unit 2 is scheduled to begin operation in FY2031 (ending March 2031), and Unit 3 in FY2034 (ending March 2034). Construction in progress as of FY2026 (ending March 2026) stood at ¥431,887 million, a substantial increase from ¥284,053 million in the previous fiscal year, reflecting full-scale investment.
Development of grid infrastructure to support large-scale adoption of renewable energy and wide-area interregional power transfer. Led primarily by Hokkaido Electric Power Network. The increase in tangible and intangible fixed assets in FY2026 (ending March 2026) was ¥229,317 million, a substantial expansion from ¥164,776 million in the previous fiscal year.
Viewing the increase in electricity demand accompanying the location of next-generation semiconductor plants, large-scale data centers, and similar facilities in Hokkaido as a medium- to long-term growth opportunity, and promoting grid development and enhancement of supply capacity. Total retail and third-party sales volume for FY2027 (ending March 2027) is projected at approximately 35.8 billion kWh (up approximately 5.0% year on year).
The Others segment, including Electrical & Telecommunications Construction Work, civil engineering & construction, and the Telecommunications Business, recorded segment ordinary income of ¥19,057 million in FY2026 (ending March 2026). Promoting earnings diversification by capturing increased intra-group construction demand accompanying continuous cost reduction and expanded grid development investment.
Last updated: July 19, 2026