Japanese utilities report $1 bln loss on high fuel prices (updated)

Hokuriku Electric Power Co

27/04/2023 10:46

(Adds Kansai Electric Power Co results)
    By Katya Golubkova and Yuka Obayashi
       TOKYO, April 27 (Reuters) - Japan's Hokuriku Electric
Power Co  9505.T , Hokkaido Electric Power Co Inc  9509.T  and
Shikoku Electric Power Co Inc  9507.T  reported a combined net
loss of 134 billion yen ($1 billion) for the 2022/23 financial
year on Thursday, citing high fuel prices.
    The trio are among seven utilities that requested increases
in electricity rates from April and June to offset high input
costs. 
    The government, seeking to address a historically high rate
of inflation, delayed the requests and asked for a reassessment
of costs.
    Hokuriku Electric's loss reached 88.4 billion yen in the
year that ended on March 31, the deepest since it started
disclosing consolidated earnings in 1994, and compared with a
loss of 7 billion yen a year earlier. 
    Hokkaido Electric's loss came to 22.2 billion yen, against a
profit of 7 billion yen the year before, its first loss in
nearly a decade, while Shikoku Electric reported a loss of 23
billion yen versus the previous year's loss of 6.3 billion yen. 
    Hokuriku Electric said revenue would take a hit of about 1.5
billion yen a month without the requested rate increases.
    Global energy prices have eased from peaks in the middle of
last year after Russia's invasion of Ukraine exacerbated a
post-pandemic energy crisis.
    Still, input costs are high and utilities also need to align
with the government's 2050 zero-emissions goal. 
    Pressure only increased this month after the Group of Seven
rich nations - chaired by Japan this year - reaffirmed a goal to
achieve a fully or predominantly decarbonised power sector by
2035 and pushed for major new renewable energy goals.
    
    NUCLEAR POWER HELPS 
    Having nuclear power among its energy sources helped Kansai
Electric Power Co  9503.T  - which powers Japan's major
industrial area of Osaka - to remain in net profit of 17.7
billion yen but it was still 79% lower than in the 2021/22
fiscal year.
    Kansai Electric said on Thursday that its sales increased by
39% to 4 trillion yen, helping to offset a hit its profit took
from higher prices of fuel, including liquefied natural gas and
coal.
    The 2011 Fukushima disaster prompted Japan to idle most of
its nuclear reactors but it is now trying to bring some back
online and may even build new ones as the energy crisis brings
new thinking in energy-poor Japan on energy security.
    Kansai Electric plans to restart its two remaining Takahama
nuclear reactors this summer and a projected increase in nuclear
power's utilization rate to about 70% should help it to reach
its profit target of 305 billion yen this fiscal year. 
($1 = 133.8100 yen)

 (Reporting by Katya Golubkova and Yuka Obayashi; Editing by
Christopher Cushing, Robert Birsel)
 ((ekaterina.golubkova@thomsonreuters.com;))