Edano tells TEPCO: Don't cut power unilaterally

March 29, 2012

The industry ministry will instruct Tokyo Electric Power Co. not to abruptly cut power to companies that fail to pay its higher electricity charges, while governors criticized the utility for its planned rate hike.

“Irrational responses (to companies that oppose the rate hike) are unacceptable,” Yukio Edano, minister of economy, trade and industry, said in a meeting of the Upper House Committee on the Economy and Industry on March 28.

TEPCO, citing rising fuel costs for its thermal power plants, plans to raise the electricity rate by 17 percent on average for companies when their one-year contracts are renewed starting on April 1. If the companies refuse to pay the higher rate, TEPCO could cut their power after about 50 days, meaning that the earliest case could come in late May.

The industry ministry will urge TEPCO to make more efforts to gain an understanding from the companies on the rate hike. It will also require the utility to respond flexibly to companies depending on their situation to prevent an adverse effect on their business operations.

Unlike rate hikes for households, utilities can increase charges for companies and other large-lot users without government approval.

And since the system for company electricity bills has been liberalized, the ministry cannot issue mandatory orders to utilities based on law. In this case, it can only issue administrative guidance, which is not legally binding, to TEPCO.

However, TEPCO is receiving financial support from the government to pay compensation for victims of the accident at the utility’s Fukushima No. 1 nuclear power plant. Therefore, the utility effectively must obey the ministry.

Edano also criticized TEPCO, saying, “The accident at the Fukushima No. 1 nuclear power plant and the company’s subsequent inappropriate attitude on the rate hike created the current situation.”

According to TEPCO, only about 30,000 of the 240,000 offices or factories in its service area have agreed to the planned rate hike. About 50,000 will have to renew their contracts on April 1, but only 3,300 have agreed to do so.

Governors of 10 prefectures around the Tokyo area summoned TEPCO President Toshio Nishizawa to Todofuken Kaikan (Prefectures’ hall) in Tokyo to ask him to scrap plans to raise the electricity rates.

“The (planned) rate hike is causing anger among people in Kanto,” said Yamanashi Governor Shomei Yokouchi, chairman of the association of prefectural governors in the Kanto region. “The rate hike will create a gap between Kanto and other regions, and companies will relocate to regions other than Kanto.”

In response, Nishizawa said: “We have been engaged in all-out rationalization. But we are producing big losses due to sharp rises in fuel costs and other factors. We want to explain the rate hike in a cordial manner.”

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Tokyo Electric Power Co.'s head office in Tokyo (Asahi Shimbun file photo)

Tokyo Electric Power Co.'s head office in Tokyo (Asahi Shimbun file photo)

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  • Tokyo Electric Power Co.'s head office in Tokyo (Asahi Shimbun file photo)

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