Despite industry outcry, TEPCO demands a price hike

01/31/2012
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TOKYO (majirox news) — The Tokyo Electric Power Company (TEPCO) seeks to raise prices for industrial consumers, with a minimum of explanation and justification, despite the fact that they are held in contempt by the vast majority of the public, who have been joined in their loathing of the fallen utility giant by political and business leaders across the board.

For example, the electric smelter members of the Japan Mining Industry Association would be faced with an additional 5 billion yen ($64 million) stuck onto each year’s electric bills.

“We’ll be facing more than double or tripled electric costs,” said Nobumasa Kemori, head of the association. “We don’t find anything convincing about this rate hike.”

One of TEPCO’s largest shareholders is also suspicious about the move.

Naoki Onose, the vice-governor of Tokyo, said, “TEPCO has piles of money stashed away. We’re not going to agree to any price hikes until they come clean about this buried treasure.”

In addition, the Government of Tokyo protested in its official note to TEPCO and the Commission for Claims Payment that, “There has been no breakdown or analysis of the claim that TEPCO will require [the equivalent of $7.2 billion] for additional fossil fuel to meet electricity demand, nor has TEPCO revealed any program to reduce costs and bring expenses under control.”

The Tokyo administration is also affected by the proposed price rise – an additional $100 million will have to be found to meet this demand.

As far as transparency is concerned – an area where TEPCO has been tried and lacking over the past year – the Tokyo authorities are demanding detailed estimates of medium-and long-term income, together with plans to shield small and medium-sized enterprises from the worst effects of the price hike.

Clearly the practice of nemawashi (literally “binding the roots,” and used to describe the process of gaining approval round the table before the official announcement of a position) has gone by the board.

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