October 3, 2008

Japan to Review Systems to Set Power, Gas Rates

Tokyo, Oct. 3 (Jiji Press)--Japan's Minister of Economy, Trade and Industry Toshihiro Nikai said Friday his ministry will set up a panel later this month to review the nation's systems to fix monthly electricity and gas rates.

The panel will specifically consider boosting flexibility of the rate-fixing systems since the current fuel cost adjustment mechanism has failed to fully respond to rapid rises in crude oil prices, Nikai told a press conference. In the existing system, power and gas rates are adjusted every three months to reflect fluctuations in import fuel prices.

The panel's establishment comes after Tokyo Electric Power Co. earlier this year announced plans to overhaul its electricity rate structure and sharply raise its household rates next January, because it has been unable to pass growing costs for thermal power generation on to its users.

Nikai in September urged executives of Tokyo Electric and other power suppliers to reconsider their steep rate hike plans, while he pledged to study ways to enable the power rate system better reflect fuel price changes.

The ministry plans to change the power and gas rate systems as early as in fiscal 2009 starting next April, he said.

The panel, meanwhile, will also consider reflecting the costs of introducing solar power generation facilities at households in electricity charges since the government is currently promoting the use of such facilities.END

(c) 2008 Jiji Press English News Service. Provided by ProQuest LLC. All rights Reserved.