Tokyo Electric Power Co. said Monday it will cut electricity rates by an average of 7.02 percent in April under a three-year business plan aimed at bolstering its competitiveness.

The average monthly electricity bill for a standard household will be reduced by 346 yen, or 5.1 percent, to 6,418 yen, while rates for office buildings will be cut by 12.8 percent, the company said.

Under the new business plan through March 2005, Tepco aims to generate an annual pretax profit of more than 300 billion yen and a return-on-equity ratio of more than 9 percent on an unconsolidated basis.

Tepco will also try to cut its parent-only interest-bearing debt by more than 400 billion yen a year over the three-year period, enabling it to achieve a capital adequacy ratio of 17 percent by the end of March 2005.

On capital investment programs, the company said it will spend 797.8 billion yen in the fiscal year beginning April, marking the first time in 25 years that capital spending has fallen below the 800 billion yen mark.

Flat rates for gas

Tokyo Gas Co. will provide flat rates to large-lot gas users over a three- to five-year period on a trial basis, company officials said Monday.

The move, rare in Japan's gas industry, is intended to smooth over gas-price fluctuations and prepare for increased competition from firms entering the sector when it undergoes further liberalization in fiscal 2002, the officials said.

Under the current system, Tokyo Gas reviews rates every three months based on foreign-exchange rates and prices of liquefied natural gas, making it difficult for large-lot users to forecast their energy costs.

The utility will consider permanently introducing the system if its clients accept it.

The company is trying out the system with several manufacturers, using experts from financial institutions to calculate the rates.

Large-lot users buying at least 1 million cu. meters of gas annually are eligible for the system. Such users account for about 30 percent of overall gas demand.