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Gov't presses 2 utilities to lower planned rate hikes

15 Comments

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.

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15 Comments
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they face a shortage in operating revenue.

boo hoo big company, they are only caring about their stock holders and not the little people. Good on the government for sticking to them.

3 ( +4 / -1 )

This kind of idiocy happens when politicians try to run the economy. So first the increase the cost of production by ordering the shut-down of nuclear power plants. Next, when the inevitable price hike comes, the want to make that go away by ordering so. This kind of demented thinking is right out of a cartoon, or of North Korea for that matter.

3 ( +4 / -1 )

Govt shouldn't be pressing but rather ordering them to lower the hikes.

2 ( +3 / -1 )

WilliB - Geothermal power is not automatically "free" just because it is in the ground. To actually produce it, you have add all other costs; for construction of the production facilities, modifications in the grid, etc. etc.

It states, 'fuel costs of geothermal power'! It says nothing about construction or modifications! That is my point!!!

2 ( +4 / -2 )

oh yeah, wage cuts instead of rising prices, well that will bring down deflation!

1 ( +1 / -0 )

disillusioned:

" //They also said that fuel costs have surged due to the utilities’ switch to geothermal power,// -----> Eh? What are the fuel costs in geothermal energy? Someone is telling porkies, I reckon! "

No. It makes perfect sense. Geothermal power is not automatically "free" just because it is in the ground. To actually produce it, you have add all other costs; for construction of the production facilities, modifications in the grid, etc. etc.

Governments have run into the same problem with other fashionable "green" energies. That is, for example, the reason that Germany just recently had to cut down on its ambitious solar panel program. They simply could not afford the subsidies anymore, and without subsidies, the "green" energy is so outrageously expensive it a gigantic waste. Same situation with the windmills, too.

1 ( +4 / -3 )

Every step in the production chain has to be spelled out?

1 ( +1 / -0 )

Wiilib: please do not mix bad management and wrong strategy to put the burden on NPP hold on. All KEPKO, TEPCO, GREADCOW, or whatever jCO just keep the same profit while doing bad job. Any other business would have bankrupt in such circumstances! Why are they still stealing us?

1 ( +1 / -0 )

That is, for example, the reason that Germany just recently had to cut down on its ambitious solar panel program. They simply could not afford the subsidies anymore, and without subsidies, the "green" energy is so outrageously expensive it a gigantic waste.

Well, that is inaccurate. The reason they cut the green energy subsidies is that the green energies produced so much energy, the coal and nuclear plants had to shut down operations from time to time. That generates less revenue for those plants and the owners of those plants, mainly four huge companies (RWE, eon, EnBW, Vattenfall) were pressuring the gov't to cut subsidies.

That's why many solar panel production companies were closed in Germany since the conservative gov't took over (2009). Also, those companies quickly pressured the German gov't to restart nuclear plants (which they did) after Germany ordered them to be shut down after the Fukushima disaster.

Also, Vattenfall sued Germany for billions of euros in damages in a WTO court, because ot the shutdown (Vattenfall AB and others v. Federal Republic of Germany (ICSID Case No. ARB/12/12)). Imagine how well liked Vattenfall is in Germany. Also, Japan is signatory to that agreement, so TEPCO and others could do the same.

1 ( +1 / -0 )

Two Elec Power Companies to hike charges from 1st May. simlpe headline.

0 ( +1 / -1 )

time to bring back up those Nuclear Power plants...

Good to see wages in Japan increasing so people can afford to pay these higher rates.. oh wait?!

0 ( +0 / -0 )

There are great amounts of fuel used to power Ge-thermal power plants,after all,these are in the simplest term,giant steam driven power plants. The water from deep geothermal wells must be pumped into the plants,heated to a point that create a hyper steam,cooled and condensed from vapor back to liquid and then pumped back into the ground..geothermal is only sightly less expensive than coal or NG as a way of producing high wattage,high voltage electricity..It takes allot of fossil fuel to fire a GTPP ,albeit, a bit less than a coal powered plant. The truth is,either Japan excepts the risk and uses NPPs or excepts the fact that any alternative will result in higher utility bills...there isn't anyway around the fact that if the power companies must pay more out of pocket to produce the same amount of product that these companies,in order to be proffitable and exist,must rase consumer rates.

0 ( +1 / -1 )

I would certainly prefer no rate hikes. But would they not assist the incumbent regime with its desperate and misguided attempts to increase inflation?

0 ( +0 / -0 )

They also said that fuel costs have surged due to the utilities’ switch to geothermal power,

Eh? What are the fuel costs in geothermal energy? Someone is telling porkies, I reckon!

-1 ( +1 / -2 )

The government is asking them to offer back half of the stolen chocolate bar, when they should be flat out telling the companies to give it back, plain and simple. Who runs this country? So far we've seen 'Abenomics' deflate the yen, raise the cost of imports, increase the debt, and after seeing it fail to give the regular wage-earners a bit of a break we're seeing the government have to beg to do so, and at a discount.

-2 ( +1 / -3 )

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