Japan’s ten electric power utilities have applied to the International Trade and Industry Ministry for permission to cut rates by an average 3.4 per cent from February 10. The move is in line with the companies’ announcement in May 1997 that they would slash their rates to internationally competitive levels starting early this year.
The Japanese government has urged the power utilities to reduce electricity rates to bring them in line with global market values, which are estimated to be 10 to 20 per cent lower than the current levels in Japan. Kansai Electric Power Co. and Chubu Electric Power Co will cut rates by less than three per cent, while Hokkaido Electric Power Co and Kyushu Electric Power Co will implement cuts of five per cent or higher, sources said.
The reduction in February – the first full-scale reduction in electricity charges since January 1997 – will come on top of planned minor cuts some time this month.
The ten firms said they will prepare funds to implement the February cuts by taking further cost-reducing measures such as the freezing of fresh investment in facilities projects.
They also said they will use extra profits, earned from decreased interest burdens resulting from low interest rates, to carry out the reduction.
• Meanwhile, Japan’s ten power utilities have revealed cutbacks in investment plans for the fiscal year 1997-98 that will trim 286.3bn yen from spending previously planned. The revised budgets cut capital outlays by 177.2bn yen in 1997 and 109.1bn yen in 1998. Nine of the ten utilities will reduce spending in both terms.
Tokyo Electric Power Co (Tepco) plans the largest cut, 83.2bn yen, followed by Kansai Electric Power Co at 45.9bn yen.
Tepco also plans to reduce its work force to 42 600 by the end of the fiscal year 1998, from 43,166 which it peaked at two years before. Chubu Electric Power Co aims to cut manpower to 19 044 from 19 272, while Chugoku Electric Power Co wants to trim personnel from 10 523 to 10 500 or fewer.