Business / Corporate

Tohoku Electric to seek 11.4% household power rate hike


Tohoku Electric Power Co. sought government approval Thursday to raise household electricity rates by an average of 11.41 percent from July 1 to offset its worsening business due to the shutdown of its atomic reactors due to the March 2011 megaquake, tsunami and nuclear disasters.

The utility, which supplies power to areas that include disaster-hit Miyagi and Fukushima prefectures, said it also plans an average 17.74 percent rate hike for corporate users from July 1, a move that does not require government approval.

The firm said it has no plans to give special treatment to people and companies affected by the disasters in introducing the rate hikes, a move that may have an impact on ongoing reconstruction efforts in the disaster-devastated Tohoku region.

Tohoku Electric is the fourth regional utility to apply for government approval to raise household electricity rates since Tokyo Electric Power Co.’s Fukushima No. 1 nuclear plant suffered three reactor core meltdowns after the March 11, 2011, Great East Japan Earthquake and monster tsunami. The disaster effectively led to the shutdown of the nation’s reactors, although two were restarted last summer at the Oi, Fukui Prefecture, atomic plant of Kansai Electric Power Co., which is among the four to hike rates.

Most of the 10 major utilities posted group net losses for the April-December period as they continued to face growing fuel costs for thermal power generation to make up for the loss of halted reactors.

Under Tohoku Electric’s plan, a standard household using around 280 kwh per month would see its monthly bill rise by ¥540, or 8.08 percent, to ¥7,223. If household rates are raised, it would be the utility’s first hike based on a thorough cost review in 33 years.

The utility came up with the rate hike plan by calculating the costs for supplying power during a three-year period from this April.

The plan is based on the assumption that Tohoku Electric’s Higashidori nuclear plant in Aomori Prefecture will resume operations from July 2015 but its Onagawa plant in Miyagi Prefecture will remain idled in part because of the need to repair equipment damaged in the 3/11 natural disasters.

Kepco and Kyushu Electric Power Co. have already applied for government permission for rate hikes, and their plans are being screened by the government.

Tepco first sought to raise household rates by an average 10.28 percent but was asked to trim the increase to 8.46 percent based on a screening process.

Four electric utilities — Chubu, Hokuriku, Chugoku and Okinawa, do not plan to seek rate hikes at present because they are less dependent on nuclear power.

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