Japan's top power utilities see power sales decline

Okinawa Electric Power

27/04/2018 12:15

* Tepco sees power sales dropping 2.9 pct in 2018/19
    * Chubu Electric also sees power sales decline in 2018/19

    By Osamu Tsukimori
    TOKYO, April 27 (Reuters) - Two out of Japan's three big
power utilities projected a decline in electricity sales in the
new business year as new entrants continue to grab market share
following liberalisation of the 8 trillion yen ($73 billion)
retail power market two years ago. 
    Japan's former 10 power monopolies have barely recovered
from the 2011 Fukushima nuclear disaster, the resultant high
fuel costs after most reactors were shut and costly safety
upgrades. They now face an exodus of customers with Japan's
retail market thrown open to hundreds of firms.
    Tokyo Electric Power (Tepco)  9501.T , Kansai Electric Power
 9503.T  and Chubu Electric Power  9503.T  have lost some 5.7
million retail power customers who have switched to new
electricity providers since the sector was fully liberalised in
April 2016.  urn:newsml:reuters.com:*:nL3N1RM16E
    Though the power utilitiies are trying to offset the losses
by winning new customers outside their home turf, they are
having a hard time halting the decline in overall power sales.
    Top-ranked Tepco projected group power sales to fall 2.9
percent in 2018/19, after posting a 1.4 percent drop in the year
ended March 31.
    "The competition in the (Tokyo) Metropolitan area is very
severe," Tepco Holdings President Tomoaki Kobayakawa told
reporters when asked about the decline in power sales. 
    Kansai Electric posted a steep 5.1 percent decline in power
sales in 2017/18 but did not make projections for the new year.
Chubu Electric was the only one among the top three power
utilities to post a 0.9 percent gain in group power sales in
2017/18, but projected a 1.8 percent decline in the new business
year.
    
    The three utilities this week posted higher recurring
profits in the year ended March 31 due to higher energy prices,
but the decline in power sales has been weighing on profit. 
    Reiji Ogino, senior analyst at Mitsubishi UFJ Morgan Stanley
Securities, has said that though the power utilities do not
report details about the adverse impact on earnings from the
customer losses, the impact should not be minimal.  urn:newsml:reuters.com:*:nL4N1N524S 
  
    To offset declining power sales, many of Japanese power
utilities have entered the 2.4 trillion yen retail city gas
market that were opened up for competition a year ago and
selling power outside their home turfs.
   
($1 = 109.3300 yen)

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Power sales by Japan's top three utilities on the decline    https://reut.rs/2Kk7rP0
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 (Reporting by Osamu Tsukimori, Editing by William Maclean)
 ((osamu.tsukimori@thomsonreuters.com, +813 6441 1857, Reuters
Messaging: osamu.tsukimori.thomsonreuters.com@reuters.net;))