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Tokyo Electric Power Company Holdings Inc., operator of the wrecked Fukushima No. 1 nuclear plant, said first-quarter operating profit plummeted 37 percent as sales declined amid faltering demand and new competition in Japan’s power market.

Tepco posted operating profit of ¥143.6 billion for the three months ended June 30, down from ¥228.3 billion a year ago, the company said in a statement Thursday.

Revenue fell about 18 percent to ¥1.26 trillion as the company’s electricity sales volume dropped and rates were automatically lowered by the nation’s price adjustment system. The system adjusts monthly electricity rates for each utility based on a three-month average of import prices for LNG, crude oil and coal.

Japan’s regional utilities are getting squeezed by new entrants after the country finally liberalized its retail power market in April, allowing consumers to choose their electricity providers for the first time. Tokyo Electric hopes to boost profits by expanding domestic gas sales when that market fully opens up next year, by increasing foreign investments and by restarting its operable nuclear reactors.

About 762,500 consumers had switched from Tepco to a new electricity provider as of June 30, according to data from the Organization for Cross-Regional Coordination of Transmission Operators. The number of households and small businesses switching, however, remains a small portion of Tepco’s customer base of more than 29 million.

Power usage dropped last year to the lowest since 1998 as households and businesses conserved electricity to help cope with the stagnant economy and shrinking population.

A decline in fuel prices has provided some relief for the utility as it struggles to win approval to restart its atomic reactors and copes with decommissioning costs for the Fukushima No. 1 facility, which was wrecked by tsunami and a triple core meltdown in 2011.

Japan paid an average of $5.85 per million British thermal units in June for liquefied natural gas, the lowest since June 2005, according to data from the Finance Ministry.

Tepco’s first-quarter net income was ¥1.1 billion, compared with ¥203.3 billion a year ago. Its net income is influenced by costs related to compensation payments to those affected by the Fukushima nuclear disaster.

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