Tokyo Electric Power Co. (TKECF)

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Kansai Electric Power to increase household rates by 12%, plans for more reactor restarts

Kansai Electric Power Co. (KEPCO) has made plans to raise its electricity rates for household users by 12% starting in April 2013. The utility company, which serves Japan’s Kansai area, or western region, will submit its request to the central government this week in what will be the company’s first rate hike since 1980.

In addition, the Kyushu Electric Power Co., which serves the southwestern island of Kyushu, is also planning to increase its own rates by 8.5% starting in April. The price hikes are an attempt to combat the increasingly more expensive costs of importing and using fossil fuels in the wake of Japan’s near-abandonment of nuclear power. Both KEPCO and Kyushu Electric sustained heavy losses during the April-September months of 2012. While KEPCO is the utility responsible for managing the Oi nuclear plant in Fukui Prefecture, home of the only two reactors still in operation, it will join Kyushu Electric in also raising rates for corporate users by 15-20%.

The two power companies can’t bet on the benefits of more income just yet, as the central Japanese government has to review and approve of all rate hikes by utilities, and the Ministry of Economy, Trade, and Industry could deny their application or force them to lower the rate of increase. While the majority of people in Japan have taken the stance that the use of nuclear power should be abandoned, KEPCO and Kyushu Electric are also developing business strategies that would see the restart of more nuclear reactors sometime next year, with the hopes of returning to profitability in the fiscal 2013 year.

Source - http://japandailypress.com/kansai-electric-power-to-increase-household-rates-by-12-plans-for-more-reactor-restarts-2618923