Govt OK’s Utility Companies to Hike Household Electricity Rates

The Yomiuri Shimbun
Chief Cabinet Secretary Hirokazu Matsuno, second from left, speaks about rising prices at a meeting of relevant ministers at the Prime Minister’s Office on Tuesday.

TOKYO (Jiji Press) — The government effectively endorsed on Tuesday seven major power utilities’ plans to raise their regulated electricity rates for households due to higher fuel costs.

The planned hikes range from around 15% to 40% on average.

The increased electricity rates are expected to be implemented on June 1 after authorizations are given by the industry ministry.

The government, at a meeting of related cabinet ministers Tuesday, approved the screening standards on the sizes of rate hikes, compiled by the ministry late last month.

The seven power firms including Tokyo Electric Power Company Holdings Inc. that have applied with the ministry for hikes in their regulated household rates will resubmit their applications to adhere to the approved screening standards.

The ministers decided that base electricity prices should not be increased as higher fuel costs were chiefly behind the planned hikes, and that increased labor costs following wage hikes should not be included in cost calculations.

“We hope the power firms will work on increasing their business efficiency, and we’ll do follow-ups,” industry minister Yasutoshi Nishimura told a press conference Tuesday.

For a standard household, the sizes of the hikes, including the increase in charges by transmission companies for using power lines, are expected to be 20.1% for Hokkaido Electric Power Co., 21.9% for Tohoku Electric Power Co., 15.3% for TEPCO, 39.7% for Hokuriku Electric Power Co., 26.1% for Chugoku Electric Power Co., 23% for Shikoku Electric Power Co. and 36.6% for Okinawa Electric Power Co.

Many utilities initially applied for larger hikes, ranging from 26.8% to 43.4% on average.

Following Prime Minister Fumio Kishida’s instruction to conduct strict screenings for the applications, the industry ministry decided that calculations for raising rates should reflect the recent decline in fuel prices.

Five power companies, including Tohoku Electric, had originally planned to raise rates in April, but the hikes were postponed due to talks between the industry ministry and the Consumer Affairs Agency failing to go smoothly, following revelations of unfair practices at major utilities, such as price cartels.