TEPCO overcharged rates for a decade


TOKYO (majirox news) — Tokyo Electric Power Co. (TEPCO) may have charged higher than necessary electricity rates for at least a decade, judging by a government investigation into the utility.

Overcharging appears to have netted TEPCO about 600 billion yen (around $8.2 billion) over the past 10 years, which the utility was able to do by reporting costs higher than they actually were.

“We suspect the excess money came from an inaccurate cost calculation at the time of submission rather than any attempt to make operations more efficient,” a report made by the government body investigating TEPCO said.

Electricity prices in Japan are decided by utilities, which run as monopolies in their service areas. Rates are determined by calculating costs, including such factors as labor, fuel and maintenance expenses, with a margin added for profit. Utilities submit an estimate of costs to the government for permission to set charges and these are usually rubber-stamped.

The government investigation into TEPCO said its estimated costs for the past decade were 618.6 billion yen higher than what it actually used. Over-estimation of maintenance costs is believed to have been behind TEPCO’s huge divergence.

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2 Responses to TEPCO overcharged rates for a decade

  1. martin on 09/30/2011 at 11:52 am

    So does this mean that TEPCO will refund the overcharged portion or just increase rates to subsidize the Fukushima victims?

  2. walter marich on 10/10/2011 at 6:19 am

    Nothing exasperating about it. Its been the MO for more than 10years but more like 50 and more years ago..they need a lot of slush funds and donations to here and there and lots of bonuses..not only in Japan but the same is more or less the same in all countries!!

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