Household power rate increase officially accepted

Govt OK's power rate hikes for 2 utilities

April 3, 2013

http://the-japan-news.com/news/article/0000103408

[Jiji Press]

The government Tuesday approved plans by Kansai Electric Power Co. and Kyushu Electric Power Co. to raise household electricity rates by 9.75 percent and 6.23 percent, respectively.

The increases, to come into effect in May, will be the first full-scale power rate hikes by the two utilities in 33 years.

The monthly electricity bill for an average household will rise by 643 yen in Kansai Electric's service area and by 362 yen in Kyushu Electric's area.

Ichiro Takahara, director general of the Natural Resources and Energy Agency, handed letters of approval to Kansai Electric President Makoto Yagi and Kyushu Electric President Michiaki Uriu.

Kansai Electric and Kyushu Electric initially applied for respective rate increases of 11.88 percent and 8.51 percent. But the Economic, Trade and Industry Ministry on Friday instructed them to reduce the margin of hikes by cutting fuel, labor and materials costs further. The two companies also trimmed the margins of rate hikes for corporate users to 17.26 percent from 19.23 percent at Kansai Electric, and to 11.94 percent from 14.22 percent at Kyushu Electric. A rate change for corporate users does not require regulatory approval, but the utilities took into account the government's desire to curb user burdens.

As the two companies lowered the size of the rate hikes, their revenues are expected to fall by 47 billion yen at Kansai Electric and 30 billion yen at Kyushu Electric. The utilities plan to recoup the declines by streamlining their operations.