TEPCO Electricity Rate Hike Very Small

Japan Times reports that TEPCO has raised the rates for household consumers of electricity from September on by 8.46%, since shutting down nuclear power means firing more fossil fuel, which increases their costs.

Since TEPCO still has a monopoly for serving household costumers, they needed permission from the industry ministry. They originally applied for a 10.28 percent price hike and got only 8.46 percent passed.

However, in absolute terms, that price hike comes to only 347 yen for a household using the average of 290 kWh per month.

That’s less than three cans of coffee from a street vending machine. Most people in Japan won’t feel that either way.

And it is far from the amount of price signal that would be required to have people start saving more electricity because they want to keep their costs down.

Published by kflenz

Professor at Aoyama Gakuin University, Tokyo. Author of Lenz Blog (since 2003, lenzblog.com).

5 thoughts on “TEPCO Electricity Rate Hike Very Small

    1. For the record, I think the model of reserving monopolies for utilities and requiring permission for each price change is outdated. Japan should abolish all remaining monopolies on electricity.

      However, the point of this post was more that an 8 percent price hike is rather small in absolute numbers.

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  1. No, if you have a monopoly in the first place, prices need to be under control by the government.

    In contrast, in a liberalized market like in Europe, competition will keep prices down.

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  2. “you think that they should be able to jump prices up as high as they want to? ”
    They can’t raise prices “as high as they want to”, only as high as the customers are willing to pay, if there were a free market in energy/electricity.

    “So people get reasonable prices.” Reasonable… for whom? By whose standards?

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