Tokyo Electric Power Company Planning To Increase Electricity Rates

On Thursday, TEPCO said that it is planning to increase corporate customers’ electricity rates in April. Furthermore, Tokyo Electric Power Co said that it is also considering increasing household rates in the next year. The company is struggling with immense thermal fuel costs as a result of the nuclear crisis in Fukushima earlier this year. As a result of the crisis, manufacturing activities were also suffered. On the other hand, a spokesman for the company said that it is planning to inform the customers’ about the price hike in January 2012.Accroding to the Nikkei business daily report, it was revealed that TEPCO is planning a one fifth increase.

In March, TEPCO’s Fukushima Daiichi nuclear plant was wrecked by the tsunami and earthquake. As a result of the natural disaster, TEPCO faces cleanup costs and huge compensation payments. Numerous questions have been raised about TEPCO’s independence as a company. As TEPCO moved to thermal power its Fukushima linked financial burden has been compounded by a boost in the fuel costs. Currently, Only 2 of TEPCO’s reactors are still operating.

The company has a total of 17 reactors. Furthermore, some reactors which were not hit by the disaster are still unable to start after going offline for scheduled repairs. Meanwhile, the Nikkei revealed that TEPCO predicted the rate increase to generate an extra 500 billion yen in revenue. Reports revealed that approximately $13 billion could be injected into the utility by Japanese government in the next year. The government intends to keep the utility buoyant in a de facto nationalization. Furthermore, the Japanese government and TEPCO will also look for additional loans from the financial institutions.

The Nikkei reported that approximately 60 percent of TEPCO’s electricity sales are to corporate customers including office buildings, departmental stores and large factories. Furthermore, the newspaper said that the company can raise the electricity rates for these customers without informing the government. Meanwhile, TEPCO is expecting an increase of 830 billion yen in its fuel costs by the end of first quarter next year.