Corporate Information

Press Release (Jul 28,2008)
Notification to Revise Electricity Supply Contracts
The Tokyo Electric Power Co., Inc. (TEPCO) has today notified the Minister of Economy, 
Trade and Industry, effective September 1, 2008, to revise its electricity supply 

1.Revisions of Electricity Rates

TEPCO has been making every effort to supply stable and inexpensive electricity to 
our customers.  To ensure customer satisfaction, with better service quality, TEPCO 
has promoted thorough cost reduction efforts, which lead to six-time reductions of 
electricity rates since January 1996.  

The last revision of the electricity rates was in April 2006, and since then, 
conditions for calculating electricity rates have been drastically changed.  Fuel 
prices have sharply risen and costs of fuel and electricity purchase have increased 
due to the shutdown of all the units at the Kashiwazaki-Kariwa Nuclear Power Station 
hit by the Niigata Chuetsu-Oki Earthquake last year.  On the other hand, 
facility-related costs have decreased because of thorough companywide cost reduction 
Based on these situations, as we noticed, TEPCO has decided to revise its electricity 
rates, effective September 1, 2008.  

As for electricity charges from September to December 2008, we have decided to keep 
its level of August 2008, which includes fuel cost adjustment.  This is realised 
by including the future cost reduction results to a maximum extent, while we have 
revised the whole costs, in order to reduce the burdens of our customers.  
We have also decided not to implement the fuel cost adjustment as for the electricity 
fares from September to December 2008.

Although we anticipate continuous severe business environment with unclear future 
trend of fuel prices, TEPCO, giving the highest priority to facility safety and 
quality assurance, will go further to reduce more costs and do our best to improve 
and maintain business quality for which TEPCO wins confidence from the customers. 
2.Outline of Revision of Electricity Rates

  "Energy charge rate (1kWh unit price of energy charge)" which is used to calculate 
"Energy charge" paid according to the amount of electricity consumption and calculation 
standards for "Fuel cost adjustment rate (1kWh unit price of fuel cost adjustment)" 
are to be revised.

(1)  Revision of Energy Charge Rate 

The energy charge rate* effective September 1, 2008 will be the same as the sum of 
the energy charge rate at the present and the fuel cost adjustment rate from July 
to September 2008.
(*Including lamp charge and small appliance charge of Fixed Rate Lighting Service,etc.) 

Ex. Energy Charge Rate of Meter-Rate Lighting B
Energy Charge Rate of Meter-Rate Lighting B
(2) Revision of Calculation Standards for Fuel Coat Adjustment Rate In accordance with the revision of electricity rates, "Standard fuel price" and "Standard unit price," which are calculation standards for "Fuel cost adjustment rate," are to be revised based on customs statistics prices from January to March 2008. The standard fuel price will rise because of the hike of fuel prices and, according to this, the maximum adjusted price will also rise before the revision. In addition, due to the revision of the standard unit price, the fluctuation band of the fuel cost adjustment rate will be also wider than that before the revision.
Considering the burden of our customers, we have decided that the fuel cost adjustment will not be applied to the electricity rates for October to December 2008. Because of the revision, in case that all the conditions such as contracts and the amount of electricity consumption are equal, monthly electricity charge from September to December 2008 would be the same as that before the revision. After January 2009, we plan to apply the revised fuel cost adjustment rate.
3.Efforts to Improve Business Efficiency TEPCO gives the first priority to stable electricity supply, facility safety, and quality assurance. At the same time, TEPCO with a unified effort by its group companies, aiming at the targets of improvement of business efficiency (more than 20% improvement of business efficiency by FY 2010, compared with that in 2003) in the midterm business management policy "Management Vision 2010," has been promoting to improve business efficiency along with thorough cost reductions in every area and reduction of capital expenditures. When revising the electricity rates, we have included the future results of more business efficiency improvement to a maximum extent (about 270 billion yen) in addition to the business efficiency improvement so far. Our efforts to improve business efficiency after the previous revision of electricity rates (effective April 2006) are as follows: - Reduction of Capital Expenditures We have been tackling to reduce capital expenditures, while at the same time formulating and operating an efficient and flexible equipment infrastructure and maintaining a reliable supply of electricity. In the FY2008 Management Plan, we set annual investment in equipment for 2008-2010 at an annual average of ¥630 billion, which is approximately one third of the annual amount spent in 1993 when investment was at its peak. - Thorough Cost Reduction In addition to more cost reduction in a cross-sectional manner, TEPCO has been getting further into thorough cost reduction such as decrease of construction costs by careful selection of construction plans and revision of inspection cycle and maintenance range. Moreover, based on the analysis of cost structure of our group companies, TEPCO will try to accelerate cost reduction efforts as a whole group through revision of business process and, streamlining and standardization of specifications. Please note that this purports to be an accurate and complete translation of the original Japanese version prepared for the convenience of our English-speaking audience. However, in the case of any discrepancy between the translation and the Japanese original, the latter shall prevail.
Reference:Fuel cost adjustment system(PDF 19.9KB)
Main Electricity Rates(PDF 65.8KB)
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