TEPCO will be unable to impose rate hikes by July 1st as planned

An electric meter inspector handing a leaflet to a customer

TEPCO will be unable to increase residential electricity rates on July 1st as it had hoped, because the committee set up by the Japanese Government to assess the rate increase has not announced its final conclusions.

According to TEPCO, “Although our wish to implement the rate increase on July 1 has not changed, we are not able to comment on the assessment schedule. The best we can do for the moment is to continue committing ourselves to providing reliable explanation to our customers.”

TEPCO had prepared leaflets which were designed to encourage the public to be understanding of the rate increase, and began distributing them on May 23 to about 28 million customers who will be subject to increased rates.

A store owner who received the leaflet said with a frown on his face, “I have put in a lot of effort since last year to cooperate in saving power.” He added in an angry tone, “I am strongly against the rate hike. I saw on TV that [TEPCO] had a lavish recreation facility [for its employees]. The company’s top management is completely irrational. It is unacceptable. I am totally infuriated.”

TEPCO faced an enormous amount of unexpected criticism after it disclosed for the first time that big corporate users are charged only half the rates for residential users. The company also revealed that residential services generated an average of 91% of its profits between fiscal 2006 and 2010, even though such services accounted for only 49% of total revenue.

For Japan’s 10 regional monopoly utilities, the share of total profits from residential services was 69% on average in the same period.

Critics claim TEPCO’s admission is evidence that the utility is resisting market liberalization because it depends on income from its residential market monopoly for the bulk of its profits.

TEPCO has threatened that it will ask for steeper electricity rate hikes than already announced if currently idled nuclear reactors aren’t restarted next year, as planned.

Source: The Denki Shimbun

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