Tepco eyes 10% rate hike for spring

Kyodo

Power bills in Tokyo may rise by over 10 percent next year to cover the shift to thermal power generation triggered by the nuclear meltdowns in Fukushima, sources said Sunday.

The power bill for a standard household in September is about ¥6,776, according to Tokyo Electric Power Co. If the utility hikes its rates by 15 percent, it will add another ¥1,000 to the bill, the sources said.

Although utilities have a system that automatically adjusts monthly rates based on fuel costs, Tepco’s plan represents a full-scale revision of its pricing regime, which will require government approval, the sources said.

Tepco is looking to file an application for the revision with the trade ministry, which also happens to oversee the national nuclear regulatory authority, in October so it can hike rates next spring, the sources added. The application will be Tepco’s first request for a full-scale revision of its pricing regime in 31 years.

The government is reluctant to approve the hike because it will hurt businesses and households, which were already struggling to deal with a deep recession exacerbated by the global economic crisis before the March 11 quake and tsunami hit.

Tepco will therefore step up efforts to cut fixed costs and fuel costs to smooth the way for the rate hike, the sources added.

An independent panel designated by the government is scrutinizing Tepco’s business conditions and assessing its assets and costs.

Its final report is due in September, after which the utility is to compile a business plan in October in order to receive subsidies to help it compensate people and businesses damaged by the crisis at its Fukushima No. 1 nuclear plant.