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Friday, March 30, 2012

Politicians battle Tepco hike

Utility president unyielding in meeting with governors


Staff writer

With Tokyo Electric Power Co.'s rate increase for businesses looming from Sunday, politicians were trying to somehow stop the move or at least make sure the utility won't resort to drastic actions against those customers unwilling to go along with the hike, such as cutting off their power.

News photo
Message received: Yamanashi Gov. Masaaki Yokouchi (right) hands Tokyo Electric Power Co. President Toshio Nishizawa a request regarding the utility's planned electricity rate hike at a meeting Wednesday in Tokyo. KYODO

"I don't think (Tepco) understands that it is in an extraordinary situation," Saitama Gov. Kiyoshi Ueda said Wednesday night after meeting with Tepco President Toshio Nishizawa.

Ueda also said the utility doesn't appear to be taking seriously the support it is getting through public funds.

A group of two governors, a vice governor and prefecture officials in the Kanto region met with Nishizawa and other Tepco officials to ask the utility to scrap the rate hike and instead strive harder to cut its own costs.

But Nishizawa said Tepco is stuck in a "money-losing structure" as it faces mounting costs for fossil fuels to fire thermal power plants as a replacement for nuclear power.

He also said the utility may not be able to buy enough fossil fuels if it keeps losing money and thus possibly won't be able to meet the electrical needs of its service area.

"If we don't do something (to increase revenue), I fear the company will be in a critical situation within a year," Nishizawa said.

During the meeting, the governors slammed the utility for not making drastic cost-cutting efforts, for instance by slashing regular employees' salaries by at least 30 percent, instead of the 20 percent it has already instituted.

While Tepco has pointed out the 20 percent cut will mean the average salary of its employees will be lower than the average for central government employees, Ueda said such a comparison is not appropriate because 75 percent of Tepco's workers are high school graduates, while the government employees are mostly college graduates and therefore should have a higher salary base.

Tepco countered that its workers' average annual salary is now ¥5.7 million, compared with the average of ¥6.34 million for government employees.

But Tepco also said the average for its employees with university degrees is ¥6.3 million, nearly the same as that for government bureaucrats.

Ueda also slammed Tepco for its eagerness to raise rates without fully explaining to customers how its contract system works in order to get them to agree to the hike from April, while at the same time being too inactive when it comes to cutting its costs.

Tepco plans to up the power charge for heavy-use customers by 17 percent on average starting Sunday. The timing of the rate hike depends on when customers' annual contracts with Tepco end, but it will be implemented to most customers by summer.

Many in the business sector are opposed to the hike and some are even expressing their intention to refuse to pay the added portion.

Kota Matsuda, a member of Upper House from Your Party, said during Wednesday's Diet session that he called Tepco to ask whether it will stop providing power if customers refuse to pay the extra charges.

He was told the utility will cut them off because that is stated in the contract, said Matsuda, adding this would be unacceptable because Tepco has received massive public assistance.

Although the Ministry of Economy, Trade and Industry doesn't have the legal power to stop Tepco, "that kind of robotic action against customers based solely on the law or contracts is socially unacceptable," METI chief Yukio Edano said.

Nishizawa did not specifically mention Wednesday night the possibility of stopping anyone's power supply and just said the utility will do its best to persuade customers to agree to the rate hike.



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The Japan Times

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