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Utilities ordered to trim planned rate increases

Kyodo

The government on Thursday ordered three electric companies to trim planned household rate hikes by more than 2 percentage points after finding they had more room to reduce the costs they want to pass onto consumers.

Based on the outcome of the screening process conducted by the government, Hokkaido Electric Power Co. will be allowed to raise its electricity rate by an average of 7.73 percent, Tohoku Electric Power Co. by an average of 8.94 percent and Shikoku Electric Power Co. by an average of 7.80 percent.

They can raise the rates starting Sept. 1.

The three companies had initially sought rises of 10.20 percent, 11.41 percent and 10.94 percent.

Of the nation’s 10 suppliers, Tokyo Electric Power Co., Kansai Electric Power Co. and Kyushu Electric Power Co. have already raised their rates for households.

The rate hikes are to make up for fuel costs to run thermal power plants, which have been operating at an increased rate to make up for the loss of nuclear power because of the Fukushima catastrophe.

Utilities are allowed to pass onto household customers the costs for providing power, such as fuel and personnel expenses, and a certain level of “business returns,” which are used for such purposes as interest payments.