Kansai Electric applies for household rate hike

Kyodo

Kansai Electric Power Co., blaming higher fossil fuel costs, applied to the government Wednesday for permission to raise its rates for households by 10.23 percent on average starting in April.

The utility, which relied heavily on nuclear power before the 2011 Fukushima crisis, last raised its household fees in May 2013.

It also plans to increase its rates for corporate customers and factories, which does not require government approval. It is looking at a hike of 13.93 percent for large-lot users.

The Ministry of Economy, Trade and Industry will discuss whether the request is reasonable before deciding whether to grant approval. METI could also trim the size of the markup.

At the proposed rate, the bill for an average household is projected to increase by ¥744 per month to ¥8,355.

All 48 commercial reactors in Japan remain offline following the meltdowns at the Fukushima No. 1 power plant in 2011. At least four reactors, including two operated by Kansai Electric, could go back online next year, but the outlook for most of the others remains uncertain.

Kansai Electric, which serves the region centering on Osaka, is expected to post a group net loss of ¥126 billion this business year for the fourth straight year of red ink. The company expects a consolidated operating loss of ¥100 billion on sales of ¥3.44 trillion, according to its full-year earnings projection released Wednesday.

President Makoto Yagi said last week the firm is expected to remain in the red next year as well unless it raises its rates.

But since the last increase, Kansai Electric’s sales have been on the wane as large-lot customers have switched to independent power suppliers that offer lower rates.