Abstract
Nippon Electric Power Co. Ltd. (Nippon Denryoku) was founded after World War 1 as a subsidiary of Ujigawa Electric Power Co. Ltd. (Ujigawa Denryoku), with the intention that its main business would be the supply of wholesale electricity to Ujigawa.
However, Ujigawa decided to go into partnership with, and to buy electricity from, Great Consolidated Electric Power Co. Ltd. (Daido Denryoku), which had completed electric power transmission facilities to Osaka before Nippon Electric, and so Nippon Electric lost its largest customer. It was forced to seek other purchasers for its electricity to replace Ujigawa and, undertaking a positive sales drive, found customers in Osaka, Hyogo, Kyoto, Aichi and Toyama Prefectures.
As a result of this Nippon Electric was able to break away from its parent company and become independent. The main reasons for its growth were the low price of the electricity it supplied and the rapid expansion of the power supply market in the 1920s caused by the electrification of industry.
However, in the process of becoming independent Nippon Electric practiced unrealistic financial management, letting for example its depreciation reserve become insufficient, and consequently in the Showa depression which followed, the company found itself in a serious crisis.
