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Japan govt sanctions Tepco reform plan, including rate hike
July 25, 2012 / 3:34 PM / 5 years ago

Japan govt sanctions Tepco reform plan, including rate hike

TOKYO, July 25 (Reuters) - Japan’s government approved on Wednesday a rise in electricity rates for residential users by Tokyo Electric Power Co (Tepco), a key part of a turnaround plan for the company at the centre of last year’s Fukushima nuclear disaster.

The rate hike, together with plans such as using imported fuels more effectively, paves the way for Tepco, struggling under huge costs for compensation, cleanup and decommissioning, to be effectively nationalised with a 1 trillion yen ($12.8 billion) injection of public funds by the end of July.

Tepco is now committed to boosting its energy efficiency by 72.8 percent by the year ending March 2015 compared with levels in 2011/12.

Its plans in the power generation sector include starting commercial operations of two energy-efficient coal-fired plants by December 2013 and turning six emergency gas turbine units into six permanent combined-cycle gas-fired units by July 2014.

A 600-megawatt No.6 unit at its Hirono coal-fired plant and a 1,000-MW No.2 unit at its Hitachinaka coal-fired plant, both now under construction, have a heat efficiency rate of 45 percent, the world’s highest for a coal-fired plant and the same as the existing No.5 Hirono and No.1 Hitachinaka units, a company spokesman said.

The government also approved Tepco’s electricity rate hike for residential users by 8.46 percent, starting Sept. 1, marking the first rate hike since 1980.

Following the approval for the regulated market, Tepco said on Wednesday it would raise electricity rates for large-lot corporate customers by 14.9 percent on average retroactively from April. It originally raised the rates by an average 16.7 percent. ($1=78.2200 Japanese yen) (Reporting by Risa Maeda; Additional reporting by Kentaro Hamada; Editing by Mike Nesbit)

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