A panel of the Natural Resources and Energy Agency on Wednesday questioned executives from Kansai Electric Power Co (KEPCO) and Kyushu Electric Co on their applications to increase electricity rates for both households and corporate users next April.
Both utilities claimed that without nuclear power, they will have to hike rates. KEPCO is seeking a rate increase of 11.88% for household users, which would mean an average 599 yen extra per month, and a hike of 19.23% for large corporate users, Fuji TV reported. Kyushu Electric has applied for an increase of 8.51% for households.
A KEPCO official said the utility had no choice but to apply for a rate increase because all but two of its nuclear reactors are offline. He said fuel costs have surged due to the utility’s switch to geothermal power, and the company faces a shortage in operating revenue.
The Ministry of Economy, Trade and Industry has instructed all utilities to streamline their operations before it will approve rate hikes.
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.