Kansai Electric Power Co. asked the government for permission Monday to hike household electricity rates by an average 11.88 percent from April 1, after seeing its business worsen due to rising fuel costs from running thermal power plants to make up for the loss of atomic energy.
The Osaka-based utility would become the first after Tokyo Electric Power Co. to resort to rate hikes since Tepco’s Fukushima No. 1 nuclear plant suffered three reactor meltdowns last year, effectively putting the nation’s nuclear power network on idle amid safety concerns and a new regimen requiring mandatory stress tests.
Other utilities that have relied relatively heavily on nuclear power as a source of energy before the crisis started are likely to take similar actions, possibly leading to rate hikes nationwide and causing more downward pressure on the economy.
If Kepco is allowed to raise household charges, it would be its first rate hike based on a thorough cost review since 1980.
Minister of Economy, Trade and Industry Yukio Edano, who has the authority to approve the rate hike, said earlier that METI will “strictly examine” the costs the utility seeks to pass on to consumers.
The utility also announced the same day it plans to raise electricity rates for corporate users by an average 19.23 percent from April, a move that does not require government approval.
Kepco owns 11 reactors, but only two of them, at its Oi plant in Fukui Prefecture, are currently online. No other reactors are operating in the country and prospects are unclear over when, or if, any will be restarted.
Yet Kepco’s rate hike plan is based on the assumption that two reactors at its Takahama plant, also in Fukui, will be reactivated.
According to a senior official of the utility, restarting the two reactors will help the utility cut about ¥160 billion in fuel costs annually.
Kepco reported a group net loss of ¥116.79 billion for the April-September period, its biggest net loss for the half-year period.
In the case of Tepco, it first applied to raise household rates by an average 10.28 percent but was asked to trim the hike to 8.46 percent following government screening.