7 major power utilities incurred net losses in April-June

Jiji Press

17:39 JST, August 3, 2022

TOKYO (Jiji Press) — Seven of Japan’s 10 major power utilities incurred consolidated net losses in April-June, battered by surges in prices of liquefied natural gas and coal for power generation, according to their latest earnings reports released by Tuesday.

Although the companies have systems to reflect higher fuel costs in electricity bills, recent rises in fuel prices exceeded upper limits in the systems.

Of the seven, Tohoku Electric Power Co., Hokuriku Electric Power Co., Chugoku Electric Power Co. and Okinawa Electric Power Co. logged net losses of ¥31.2 billion, ¥9.2 billion, ¥26.7 billion and ¥6.8 billion, respectively, recording the largest amounts for each since they started releasing quarterly earnings reports.

“It’s difficult for each company to cope with global fuel price surges,” said Takashi Nakano, a senior official of Kyushu Electric Power Co., which posted a loss of ¥34.8 billion.

Kansai Electric Power Co.’s loss came to ¥11.4 billion. In the first quarter of fiscal 2022, the company was unable to pass on around ¥3 billion of soaring fuel costs to electricity bills.

Tokyo Electric Power Company Holdings Inc. booked a loss of ¥67 billion.

Meanwhile, Hokkaido Electric Power Co., Chubu Electric Power Co. and Shikoku Electric Power Co. posted net profits of ¥10.4 billion, ¥20.5 billion and ¥2.2 billion.

“If fuel prices remain high, we’ll face a tougher earnings situation in the second quarter and later,” Hokkaido Electric President Yutaka Fujii said.

For the full business year to March 2023, Tohoku Electric, Kansai Electric and Okinawa Electric projected net losses of ¥180 billion, ¥75 billion and ¥30.8 billion.

The other seven companies did not release full-year projections, due to uncertainties over energy markets, as well as their procurement environment amid Russia’s invasion of Ukraine.