Tepco promises rate cuts next year

Tokyo Electric Power Co. will reduce electricity rates early next year as a result of the utility’s progress in streamlining management, Tepco President Hiroshi Araki told a news conference May 9.

As to a specific date for the reduction, Araki said the utility would decide on the timing after the outlook for its business results for this year became known. Tepco is believed to have decided on the rate cut ahead of a Ministry of International Trade and Industry announcement of an action program outlining ways to lower electricity charges as part of the measures to improve domestic industry’s high cost structure.

As to MITI’s call for a 20 percent reduction in the rate, Araki said the utility would strive to achieve the goal but noted it would be rather difficult to accomplish. In Fukuoka, Kyushu Electric Power Co. announced May 9 that it also will cut charges early next year.

The scale of reduction will be determined as early as this fall after the company’s estimate of revenues and outlays for fiscal 1998 is examined, company officials said. The cut will likely take effect in spring, though the precise timing, as with the scale, will be set this fall, the officials said.

The company will implement the cut by saving money from planned curbs in capital investment and cuts in various costs, the officials said. It will instead increase electricity purchases from nonpower companies. Kyushu Electric’s last rate reduction was carried out in January 1996. The rate was cut by 8.69 percent, amounting to a reduction of 487 yen per month for an average four-member family.