Tepco to raise corporate power rates

Tokyo Electric Power Co (Tepco) said it will raise corporate customers’ power rates in April as it struggles with sizeable thermal fuel costs after the Fukushima crisis cut its nuclear output. It will seek government approval to hike household rates as soon as possible.

Japan’s largest power utility said it would inform corporate customers in January about the specifics of the rate increases, the first in over 30 years, although the Nikkei business daily reported that Tepco planned a one-fifth rise.

The financial burden in the shape of enormous compensation payments and clean up costs following the destruction at the company’s Fukushima Daiichi nuclear power plant has been compounded by higher fuel costs, which are estimated to increase by JPY830bn (US$10.64bn) in the year to March 2012. The company is shifting to the vastly more expensive thermal power option as only two of its 17 nuclear reactors remain online.

“The 800 billion yen (fuel cost) increase is huge. Unless this is addressed, the company cannot operate,” Tepco President Toshio Nishizawa told a news conference.
“Taking into consideration the tough situation, we think it is inevitable to ask for an electricity rate rise from next April for corporate customers, based on the premise of an even stricter restructuring,” added Nishizawa.