Utilities milking homes; Tepco eyes higher hike

Unlike large-lot users, households have no bargaining power for alternative power sources

Kyodo, JIJI

The 10 regional utilities generated 69 percent of their combined profits from households even though the sector only accounted for 38 percent of electricity sales volume since fiscal 2006 on average, government data showed Wednesday.

The findings show their dependence on sales to residential districts, in which power charges are higher and more regulated than the corporate sector.

Electricity charges for businesses have been deregulated and are negotiated between utilities and corporate customers, but those in the residential sector are still subject to government approval.

Tokyo Electric Power Co. is the most reliant, earning 91 percent of its profit from households, followed by Okinawa Electric Power Co. at 90 percent and Chugoku Electric Power Co. at 77 percent, according to the data.

Tepco has formally asked the government to approve an average 10.28 percent hike in residential charges from July, but this is based on its Kashiwazaki-Kariwa nuclear mega-plant being restarted within fiscal 2013.

On Wednesday, however, the utility warned that the average hike could rise to 15.87 percent if the facility remains offline.

It also said power rate hikes for large-lot corporate users introduced in April would increase from an estimated 16.39 percent to 24.79 percent on average if the Kashiwazaki-Kariya nuclear plant is not reactivated in the next fiscal year, as failure to do so would cause Tepco to incur an additional 10 percent in annual fuel costs, raising them to ¥3.173 trillion.

The projections were requested by an industry ministry panel examining Tepco’s rate hike request.