Hokkaido utility eyes raising its rates again

Kyodo, JIJI

Amid rising fuel costs for thermal power generation due to the prolonged suspension of its Tomari nuclear plant, Hokkaido Electric Power Co. announced it will apply to raise electricity rates.

Among the six utilities that raised rates following the March 2011 start of the Fukushima nuclear crisis, Hokkaido Electric is the first to announce a markup plan for the second time.

Tokyo Electric Power Co.’s Fukushima No. 1 nuclear power plant was crippled by the March 11, 2011, earthquake and tsunami, forcing Hokkaido Electric and the five other utilities — Tepco, Kansai, Kyushu, Tohoku and Shikoku — to subsequently seek a rate hike.

All of the 48 commercial reactors nationwide are currently offline.

“We have no choice but to raise the electricity rate again due to the uncertainty over the timing of restarting the (Tomari) nuclear plant,” Hokkaido Electric President Katsuhiko Kawai said at a news conference in Sapporo on Monday.

“Unless the company improves its balance of revenue and expenditures, raising the necessary funds to maintain facilities will become difficult (and) hamper stable power supplies,” Kawai said.

Hokkaido Electric expects to log a group pretax loss of over ¥110 billion in fiscal 2013 that ends in March, in the red for the third consecutive year.

The forecast is mainly due to increasing fuel costs for thermal power generation, a major alternative to nuclear energy since the crisis started at the Fukushima No. 1 nuclear power plant.

The margin of increase and its timing have yet to be decided.

Hokkaido Electric said it decided to increase the rate because costs for thermal power generation and buying electricity from other utilities are growing. It also said there is a limit to cost-cutting efforts.

Still, Kawai said the utility’s goal to restart reactors 1, 2 and 3 at the Tomari plant “remains unchanged” to ensure a stable supply of energy.

Last September, Hokkaido Electric raised electricity rates by an average of 7.73 percent for households and 11 percent for corporate users. State approval is not required for increasing rates for companies.

Hokkaido Electric’s current rates are based on the premise that all three Tomari reactors will be restarted by June.

The Nuclear Regulation Authority is assessing the possibility of restarting reactor 3, but the prospect remains uncertain because it does not satisfy new safety regulations.

As for reactors 1 and 2, screening has yet to begin due to the lack of necessary documentation.