Japan Govt to Curb Household Power Rate Hikes
17:12 JST, March 4, 2023
Tokyo —Japan’s economy industry plans to reduce increases in household electricity bills given the recent decline in fuel import prices, it was learned Friday.
Seven power utilities have applied for the ministry’s approval of hikes in regulated household electricity rates by 28 pct to 45 pct citing surging fuel costs on the back of Russia’s invasion of Ukraine and the yen’s sharp depreciation.
Tohoku Electric Power Co. , Hokuriku Electric Power Co. , Chugoku Electric Power Co. , Shikoku Electric Power Co. and Okinawa Electric Power Co. hope to raise rates from April and Tokyo Electric Power Company Holdings Inc. and Hokkaido Electric Power Co. in June.
But strict screening of their applications would push back the hikes, people familiar with the matter said.
The firms figured rate increase margins based on the average fuel costs three months prior to their applications. Specifically, Tohoku, Hokuriku, Chugoku, Shikoku and Okinawa took account the average costs for July-September last year, TEPCO for August-October and Hokkaido for September-November.
But the Electricity and Gas Market Surveillance Commission’s expert panel found at a meeting Friday that it is appropriate to use the average costs for the three months through January this year.
After recalculations using the November-January average, the initially figured costs became smaller at all utilities other than Hokuriku, including by ¥22.5 billion at Hokkaido and ¥13.9 billion at Tohoku.
The panel also pointed out that TEPCO can reduce its costs for purchasing electricity from other companies by ¥253.6 billion.
The lower fuel cost estimates reflect a halt in the dollar’s sharp appreciation to top ¥151 last October that has led to downswings in import prices for coal and liquefied natural gas.
The proposed hikes based on peak fuel prices have drawn strong backlash from the public.
On Feb. 27, Prime Minister Fumio Kishida instructed economy minister Yasutoshi Nishimura to “strictly screen” rate hike applications and take time.
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