September 13, 2012 / 12:10 AM / 5 years ago

Two Japan utilities to apply for rate hikes -report

TOKYO, Sept 13 (Reuters) - Two Japanese utilities that serve key industrial regions are likely to apply for government approval to raise residential electricity rates by about 10 percent from next April as they face roadblocks to restarting nuclear plants, the Yomiuri newspaper said on Thursday.

Kansai Electric Power Co and Kyushu Electric Power Co, which relied heavily on nuclear power before a devastating quake in March 2011, face increased fossil fuel costs and could fall into negative net worth in the financial year from next April if current rates are maintained, the report said.

The rate hikes would be the first since Japan’s government in late July approved a residential rate hike for Tokyo Electric Power Co, Japan’s biggest utility and the company at the centre of last year’s Fukushima nuclear disaster.

“We are considering all possibilities, but at this point we have not decided to raise rates,” a Kansai Electric spokesman said.

“We have made no decisions so far,” a Kyushu Electric spokesman said.

Kansai Electric is likely to file its application by the end of the year, while Kyushu is likely to apply around the end of October, the report added. The two will also consider raising rates for corporate users, it said.

Rising electricity rates and worries over possible power crunches in the peak summer and winter demand periods, after the Fukushima disaster fuelled nuclear safety concerns and led to a shutdown of reactors nationwide, have added to the difficulties confronting Japan’s manufacturing sector. (Reporting by Osamu Tsukimori; Editing by Edmund Klamann)

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