Concern about Kepco's rate rise

November 28, 2012

Kepco's electricity bill increase has industries worried

Jiji

http://www.japantimes.co.jp/text/nb20121128a2.html

OSAKA — Companies operating in Kansai Electric Power Co.'s service area are voicing strong concern about the utility's plan to raise its rates.

Kepco said Monday it will raise rates for corporate customers by an average of 19.23 percent starting in April while seeking government approval for a planned hike of 11.88 percent on average for households.

It says the increases are necessary to cover soaring fuel costs while thermal power generation makes up for its halted reactors.

The rate hike "will be very tough for industries that consume large amounts of electricity and for small businesses," said Yoshio Tateishi, head of the Kyoto Chamber of Commerce and Industry.

Officials at Sharp Corp., which has many core plants in Kepco's service area, said the 19 percent hike will increase its annual costs by nearly ¥2 billion. "We need to come up with measures to offset the expected cost increase," a Sharp executive said. "We have no choice but to make our own efforts."

Panasonic Corp. said the recent energy price increases are no longer acceptable.

It warned that Kepco's rate hike will have a major impact on manufacturers and could lead to the hollowing-out of the nation's industries.

West Japan Railway Co. is worried about a possible decline in the number of business passengers on its bullet trains.

"We were affected by the financial crisis of 2008. We are concerned about Kansai Electric's rate hike because the passenger traffic depends very much on the state of economy," a JR West official said.

Hiromasa Yonekura, chairman of the Keidanren business association, said the rate hike is unavoidable because Kepco now has only two of its 11 reactors operating and faces huge thermal power generation costs.

Stressing the importance of utilities' financial well-being to ensure stable power supplies across the country, Yonekura said both individuals and businesses should support power companies. He reiterated that more halted reactors should be reactivated.

Facing reporters in the city of Fukushima, Yasuchika Hasegawa, head of the Japan Association of Corporate Executives (Keizai Doyukai), also said Kepco's hike is unavoidable.