The government is pressing Kansai Electric Power Company and Kyushu Electric Power Company to lower their planned rate hikes for households, saying the utilities need to implementing further cost-cutting measures.
Kansai Electric (KEPCO) had applied to the ministry to hike rates by 11.88%, starting April 1, while Kyushu Electric was seeking a 8.51% hike. However, Economy, Trade and Industry Minister Toshimitsu Motegi and Minister of State for Consumer Affairs Masako Mori told executives of both companies that they should lower their rate hikes to 9.7% and 6.2% respectively, TBS reported Thursday.
Both utilities say they have to raise rates since all but two of their nuclear power plants remain offline. They also said that costs have surged due to the utilities' switch to geothermal power, and they face a shortage in operating revenue.
But Motegi and Mori looked at the operating costs for both companies, including the costs of fuel and personnel, and suggested there were still areas where cost-cutting could be carried out in order to minimize the impact for consumers.
KEPCO said it will implement salary cuts of 16% for all employees and sell off some assets worth 7.5 billion yen. Kyushu Electric said it hopes to raise 14 billion yen by selling various facilities.
The new rate hike is now expected to go into effect on May 1.© Japan Today