July 29, 2008

TEPCO Mulls 800 Yen Price Hike From January

By The Yomiuri Shimbun

Jul. 29--TOKYO --Tokyo Electric Power Co. will raise electricity bills by about 800 yen to 7,600 yen a month for a standard household from January if crude oil prices remain at their current high levels, the company announced Monday.

The fee increase is based on the assumption that the average price of imported crude oil for July to September will work out at $130 per barrel and that the exchange rate will be 105 yen against the dollar.

The increase of 800 yen would be the largest since April 1980 when the second oil crisis forced TEPCO to raise the level by 2,846 yen, calculated in terms of the current standard household bill.

Electricity bills for the July-September period are expected to be 6,797 yen a month for an average four-person household, according to TEPCO.

TEPCO will introduce a new charging system from September, which will become effective in electricity bills in October, but the current rate relating to fluctuations in the price of crude oil will not be increased at this stage as a measure to lessen the impact of the changes, TEPCO said.

The new system, the first major change to the way electricity is charged in two years and five months, is designed to better reflect crude oil price hikes in electricity charges.

There are two types of changes being made to the charging structures of the nation's electric power companies: one based on a fuel cost adjustment formula that will reflect changes in fuel costs once every three months and other changes made at the discretion of management.

Under TEPCO's new fee system, the markup based on the fuel cost adjustment formula would be raised to 1.3 times the current level if oil prices remain high.


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