Tepco to raise electricity rates as fuel costs escalates

Tepco announced it will raise corporate customers' electricity rates in April due to hefty fuel costs.

The Fukushima crisis has curbed its nuclear power output forcing it to rely on thermal power plants.

Tepco's fuel costs will rise by 830 billion yen or $10.64 billion in the year to March 2012, as it shifts to thermal power with only two of its 17 nuclear reactors still operating.

The company is also facing massive compensation payments and cleanup costs that have left its independence in doubt.

Japan's largest power utility said it would inform corporate customers in January about the specifics of the rate increases, the first in over 30 years.

"The 800 billion yen (fuel cost) increase is huge. Unless this is addressed, the company cannot operate," Tepco President Toshio Nishizawa told a news conference.

"Taking into consideration the tough situation, we think it is inevitable to ask for an electricity rate rise from next April for corporate customers, based on the premise of an even stricter restructuring," a grim-faced Nishizawa said.

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