Increased Fuel Costs Force Kepco To Mull Household Electricity Hike Of 10 Percent

Increased fuel costs force KEPCO to mull household electricity hike of 10 percentAmid its failure to restart idled nuclear reactors, Kansai Electric Power Co. is considering raising household electricity rates again by around 10 percent due to the increased fuel costs for thermal power generation, the second such hike in two years.

The utility plans to apply for industry ministry approval to increase the utility tariff by year-end at the earliest.

If the ministry gives the green light, household electricity rates can be increased next spring, depending on how KEPCO proceeds with the tariff hike procedures.

The company is also considering raising the rate for corporate electricity customers at a percentage higher than the hike for household customers.

KEPCO raised the household electricity rate by an average of 9.75 percent in May 2013. The increase was calculated under the scenario that the utility’s four idled nuclear reactors would be restarted after the summer of 2013.

But the company has been unable to receive clearance to restart its reactors so far. The increased fuel costs for thermal power generation has kept KEPCO operating in the red since its reactors were shut down in the wake of the 2011 Fukushima nuclear disaster. The utility is likely to register a loss for the fourth consecutive year in fiscal 2014, which ends March 2015.

The utility said it may be able to reduce electricity rates once it can restart some of its idled reactors at the Takahama and Oi nuclear power plants in Fukui Prefecture.

Among the regional utilities, Hokkaido Electric Power Co. raised household electricity rates by an average of 15.33 percent in November. Tokyo Electric Power Co., the embattled operator of the crippled Fukushima No. 1 nuclear power plant, currently has no plans to increase the utility tariff.