Saturday, June 16, 2012

Electricity Rate Update

TEPCO announced on June 12, 2012 that it intends a 10% reduction in the fee it charges alternative electricity suppliers for use of its transmission lines.  Since 2008 these rates have been in the range of 2.25 to 4.24 yen per kWh, and will be cut to 1.99 to 3.89 yen per kWh.

Meanwhile, discussion continues on TEPCO's request for a 10-15% increase in residential rates.  It is now clear that the increase will not be in place by July, as TEPCO has hoped, and the earliest will be August or later.  Apparently one of the major issues in the deliberation over the TEPCO rate increase request is the treatment of Fukushima Daiichi Reactors 5 and 6, and the 4 more reactors at a facility 20+ kilometers to the south along the coastline, Fukushima Daini.  The head of the commission reviewing the rate increase request has noted that if there is no realistic chance those 6 reactors would restart, then they should not be included in the TEPCO rate base.  That would reduce TEPCO's recoverable costs by 90 billion yen per year (about $1.2 billion).

On the bright side, Nikkei also reports that in response in connection with the rate increase request, TEPCO has agreed to reduce its costs for introducing "smart meters" by 1.6 billion yen per year over 2012 to 2014, and to accomplish this by revising its TEPCO-specific standard for smart meters, allowing effective foreign participation in the bidding process for the contract, and thereby reducing the cost.  If they follow through, it would be a sign of hope.

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