Kepco eyes 12% household rate hike

Kyodo

Kansai Electric Power Co. is planning to hike its household electricity rates by around 12 percent on average from next April, according to industry sources.

Kyushu Electric Power Co. also intends to raise its household rates by an average of 8.5 percent from the April 1 start of the next fiscal year, the sources said Friday.

Kepco plans to apply Monday for government approval of its first rate hike since 1980, while Kyushu Electric will likely follow suit Tuesday.

The two companies are seeking to increase rates because they, along with other utilities nationwide, are struggling in the face of sky-rocketing fossil fuel costs amid from the protracted suspension of nuclear reactors.

Both Kepco and Kyushu Electric reported huge group net losses for the April-September first half of fiscal 2012, largely due to soaring fuel costs.

However, they could be forced to reduce their envisioned hikes after an expert panel under the Ministry of Economy, Trade and Industry Ministry reviews their applications.

As for corporate rates, Kepco hopes to raise charges by around 20 percent on average and Kyushu Electric by approximately 15 percent, according to the sources. Rate hikes for businesses do not require government approval.

A business plan Kepco is scheduled to unveil Monday assumes the company will be granted approval to restart two of its reactors at the Takahama nuclear plant in Fukui Prefecture, the sources said. The utility resumed operations at two of its units at the Oi nuclear power station, also in Fukui, earlier this year.

Kepco is seeking to return to profitability in fiscal 2013 by slashing personnel costs and implementing other streamlining measures, according to the sources.

Kyushu Electric’s proposed rate hike is based on the assumption that it will be able to fire up four of six suspended reactors at two nuclear power stations as early as the next fiscal year, the sources said.

The utility is also planning to reduce manpower expenses as part of efforts to absorb soaring power generation costs, they said.