Tepco scraps plan to hike power charges 10 to 15%

Kyodo

Tokyo Electric Power Co. has decided to scrap its plan to raise electricity charges 10 to 15 percent from next April amid increasingly harsh criticism by government officials and the public, company sources said Saturday.

Tepco, which operates the crisis-hit Fukushima No. 1 nuclear plant, had planned to raise charges to partly offset the trillions of yen it has to shell out in compensation payments over damages from the nuclear accident.

The utility has already informed its creditor banks about its U-turn, the sources said. But Tepco may propose a smaller increase in charges after regular inspections begin at more of its nuclear reactors currently in service, which will drive up power generation costs due to increased use of fossil fuel.

Tepco had informally told a government committee that has been assessing the utility’s assets and costs about the plan to raise charges by up to 15 percent for three years.

But committee members decided they would not allow Tepco to hike electricity charges unless it considered cost-cutting measures, such as reducing pension payments and employees’ salaries.