More than 10%?

July 27, 2012

 Rate hike to burden families / TEPCO's rate to increase by more than 10% for some families

Chiaki Toyoda and Tadaaki Inoue / Yomiuri Shimbun Staff Writers

Households will experience a variety of increases in their electricity rates when Tokyo Electric Power Co.'s government-approved electricity rate hike takes effect.

Under the hike, approved by the government Wednesday, households will be charged higher rates as they consume more electricity.

Households serviced by TEPCO have no choice but to accept the latest hike because they cannot choose the power firm that supplies their home with electricity. This is likely to prompt calls for the utility to take measures to reduce the burden of rate hikes on households in the future.

Under the new scheme, which takes effect Sept. 1, rates will go up by an average of 8.46 percent. However, households with higher levels of electricity consumption will experience a steeper hike in their monthly bills.

For example, customers that use 120 kilowatt-hours of electricity or less per month will have their rates increase by 2.6 percent. The increase will be 7.6 percent for households that use between 121 kilowatt-hours and 300 kilowatt-hours. A steeper hike of 17.9 percent will be experienced by households that consume more than 301 kilowatt-hours.

Therefore, TEPCO's estimates on actual electricity rates, which are a basic charge (which TEPCO calls a demand charge) plus other charges, show different rate hikes depending on the household.

For example, a household with a 60-ampere contract that uses 540 kilowatt-hours per month will face a hike of 10.3 percent, or 1,438 yen, in its monthly charge. A household on a 20-ampere contract that uses 160 kilowatt-hours will experience an increase of 3.5 percent, or 127 yen.

Ichiro Takahara, director general of the Natural Resources and Energy Agency, approved the planned rate hike on Wednesday during a meeting with TEPCO President Naomi Hirose. At the meeting, Takahara urged Hirose to introduce measures to reduce the burden on consumers. "[Consumers] cannot choose power firms, and you should seriously consider their situation," Takahara said.

In June, TEPCO introduced a new scheme called the "Peak Shift Plan," under which higher rates are set for peak hours (1 p.m. to 4 p.m. from July to September) and lower rates are set during the night. As the new plan was thought to be more cost-efficient for households with high energy consumption, TEPCO expected up to 150,000 contracts by August. However, only 600 households had signed up for the new plan as of Tuesday, because many ratepayers are concerned about the high rates during peak hours.

TEPCO has also introduced other schemes that have discount rates at night and higher rates during the day. However, only a small number of households are likely to benefit from the schemes.

The smaller the size of the contract amperage, the cheaper the demand charge is. "To lower electricity rates, consumers should cut their electricity consumption or to reduce the demand charge by lowering their contract amperage," a senior official at the Economy, Trade and Industry Ministry said.

"We'll seriously consider ideas [to reduce burdens on households]," Hirose said at a press conference Wednesday.

TEPCO increased electricity rates for large-lot ratepayers in April. Combined with September's household rate hike, TEPCO forecasts its revenue to grow by about 400 billion yen.

However, some large-lot ratepayers are refusing to pay the increased fees as they are opposed to the hikes.

Among the 139,000 large-lot ratepayers whose contract expired between April and June, 12,000 ratepayers have not agreed to the hikes. TEPCO has been providing them with electricity but has not renewed their contracts.

Another 96,000 contracts will expire from July to March next year, with 20,000 of the ratepayers not agreeing to the hikes.

Unless it resolves this situation, TEPCO will be unable to obtain the increased revenue it expects.