June 26, 2008
Tokyo Electric Power Considering Steep Rate Hike in Jan.
Tokyo, June 26 (Jiji Press)--Tokyo Electric Power Co. said Thursday the company will overhaul its electricity rate structure in the autumn to adequately reflect surging fuel costs stemming from higher crude oil prices, a move expected to lead to a steep rate hike in January.
The company will report the revised rate-setting guidelines to the government in July and use them when it revises rates in January next year.
For the period until the end of this year, the company will consider keeping rates unchanged by offsetting higher fuel costs by cutting costs.
The leading power supplier's rate structure overhaul, the first since April 2006, is likely to be copied by other Japanese power suppliers.
At a press conference, Tokyo Electric Power President Masataka Shimizu said that the heavy burden of fuel costs could significantly harm the company if rates are maintained as they are now.
At present, electric power suppliers are allowed to revise rates every three months to reflect fuel price fluctuations within a basic fuel cost boundary.
Tokyo Electric Power's revision will extend this boundary as its rate hikes have already reached their limit.
Tokyo Electric Power plans to pass growing costs for thermal power generation on to its users under the revised guidelines.
Costs for the company's thermal power generation are increasing following the shutdown of its flagship Kashiwazaki-Kariwa nuclear power plant in Niigata Prefecture, central Japan, after it was damaged by a strong earthquake in July 2007.END
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