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TEPCO's position concerning, "Tariff cost estimates applied to the past 10 years exceeding actual electricity costs by 600 billion yen", as pointed out by the "TEPCO Management and Finance Investigation Committee"
October 4, 2011
Tokyo Electric Power Company

In the report released by the "TEPCO Management and Finance Investigation Committee" on October 3, the Committee pointed out that the estimated costs for tariff application were overestimated more than the actual electricity costs by 600 billion yen over the past 10 years.

This is the result of TEPCO thoroughly reducing primarily maintenance and repair costs over the last ten years in order to avoid tariff increases since the tariff reduction in 2000.

As a result of this tariff rationalization effort, we were able to achieve electricity tariff reductions for our domestic customers and others (i.e. regulated customers) four times over the last 10 years, totaling approximately 3.5 trillion yen.

In addition, part of the tariff rationalization effort was kept as retained earnings, which were used to absorb fuel cost increases connected to the shutdown of Kashiwazaki-Kariwa Nuclear Power Station caused by the Nigata-Chuetsu-Oki Earthquake and also contributed to our being able to avoid tariff increases.

Thus, the fact that the estimated cost of the applied tariff exceeded the actual costs in some categories is a result of the fruit of TEPCO's management efforts. It is not the result of a cost overestimation conducted at the time of the tariff calculation.





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