Tokyo Electric Power Co <9501.T> said on Thursday it will raise corporate customers' electricity rates in April and seek approval to hike household rates as soon as possible, as it struggles with hefty thermal fuel costs after the Fukushima crisis curbed its nuclear power output.
Japan's largest power utility said it would inform customers about the specifics of the rate increases in January, although the Nikkei business daily reported that Tepco planned a one-fifth increase.
Tepco, whose Fukushima Daiichi nuclear power plant was wrecked by the March earthquake and tsunami, faces massive compensation payments and cleanup costs that have left its independence in doubt.
Tepco's Fukushima-related financial burden has been compounded by higher fuel costs as it shifted to thermal power, with only two of its 17 nuclear reactors still operating.
Those reactors not hit by the disaster have been unable to restart after going offline for routine maintenance, as public fears over nuclear safety left local communities reluctant to approve restarts.
The Nikkei said Tepco expected the rate hike to bring in an additional 500 billion yen ($6.4 billion) in revenue.
The government may inject about $13 billion into the utility as early as next summer to keep it afloat, in a de facto nationalization, sources said this month. Tepco and the government will also seek additional loans from banks, they said.
About 60 percent of Tepco's electricity sales, or some 177 billion kilowatt-hours, are to corporate customers such as large factories, office buildings and department stores with contracts for at least 50 kilowatts, the Nikkei reported.
Rates for such corporate customers can be raised without government approval and the hike is set to affect 240,000 customer contracts, the paper said.
The utility anticipates its fuel costs will expand by 830 billion yen for the year to March 2012.
($1=77.9750 Japanese yen)
(Additional reporting by Ritika Rai in Bangalore; Editing by Joseph Radford and Chris Gallagher)