Consumer Body Urges More Cost-Cutting At Kansai, Kyushu Power

TOKYO (Nikkei)--Rate hikes for residential customers planned by Kansai Electric Power Co. (9503) and Kyushu Electric Power Co. (9508) are unlikely to take effect until May owing to delays in the approval process.

The utilities had wanted the increases to take effect April 1.

The Cabinet Office's Consumer Commission began examining their rate hike proposals Wednesday. Members argued that the firms ought to do more to cut costs.

The commission could reach a consensus as early as Monday. After that, days of discussions between the Consumer Affairs Agency and the Ministry of Economy, Trade and Industry would follow. The power companies would then need to give customers at least 10 days' notice before raising rates.

Commission members took issue with payments by Kansai Electric to Japan Atomic Power Co., operator of the Tsuruga nuclear plant. Although Kansai Electric has no prospect of new power purchases from the idled plant, it continues to pay for maintenance and other costs. And it includes these expenses in the formula for the rates that its customers pay.

While a METI-sponsored expert panel agreed with this policy, commission members called it unfair from the customer's standpoint. There was even a recommendation that the commission review the contract between Kansai Electric and Japan Atomic Power.

The commission responded more positively to the panel's proposals for reducing utilities' personnel and fuel costs.

(The Nikkei, March 14 morning edition)

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