Power sales decline for Japan's top utilities amid market liberalisation

Okinawa Electric Power

31/10/2017 11:12

* Tepco H1 power sales drop 3.8 pct from year ago, hurting 
profit 
    * Tepco loses more than 2.6 million retail power customers 
    * Chubu, Kansai also see exodus of customers, power sales 
decline 
 
    By Osamu Tsukimori 
    TOKYO, Oct 31 (Reuters) - Japan's three big power utilities 
reported another decline in electricity sales for the first half 
of the year as new entrants grab market share following 
liberalisation of the 8 trillion yen ($71 billion) retail power 
market a year and a half ago.  
    More than 5.1 million retail power accounts, or about 8 
percent of total in Japan, have switched to new power providers 
in Japan by end-September, data by the national grid monitor 
OCCTO showed.  urn:newsml:reuters.com:*:nL4N1N52YB 
    The overall share of power sales by new power entrants has 
more than doubled to over 12 percent since full market 
liberalisation in April 2016.  
    Japan's top 10 utilities - having barely recovered from the 
Fukushima nuclear disaster of 2011, the resultant high fuel 
costs after most reactors were shut and costly safety upgrades - 
are now facing an exodus of their customers with Japan's retail 
market thrown open to more than 350 firms.  urn:newsml:reuters.com:*:nL3N16V2T4 
    Japan's top three firms Tokyo Electric Power Co  9501.T  
(Tepco), Kansai Electric Power  9503.T  and Chubu Electric Power 
 9502.T  said their power sales fell by 3.8 percent, 7.3 percent 
and 0.8 percent, respectively.  
  
    Though all 10 former regional power monopolies reported a 
gain in revenues in the first half ended September due to higher 
energy prices, the decline in power sales is weighing on profit. 
    Eight of them reported declines in recurring profits in 
April-September, with No.2 power seller Chubu Electric posting a 
46.6 percent decline on year.  urn:newsml:reuters.com:*:nXB0EO4FOV 
    Reiji Ogino, senior analyst at Mitsubishi UFJ Morgan Stanley 
Securities, said that though the power utilities do not report 
the details on the adverse impact to earnings from the customer 
losses, the impact should not be minimal. 
    "Power sales for the high profit-margin retail accounts have 
been down, so that should work as a factor for profit decline," 
he said. 
    He added that Kansai Electric, which reported a recurring 
profit of around 158 billion yen for the six months ended Sept. 
30, could have seen its profit decline by around 10 billion yen 
during the period, adding the profit drop for the full year 
could be about double that.  urn:newsml:reuters.com:*:nXB1I9U13N 
    To offset declining power sales, Tepco has been trying to 
limit the impact by entering the 2.4 trillion yen retail city 
gas market that were opened up for competition in April and 
selling power outside its home turf, Tepco Holdings Managing 
Executive Officer Yoshihito Morishita said.  urn:newsml:reuters.com:*:nL3N1H7330 
($1 = 113.1000 yen) 
 
    <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ 
Share of new power entrants after market liberalisation    http://reut.rs/2yXiI4I 
Power sales by Japan's top 3 power utilities fall by up to 26 
pct in 7 years    http://reut.rs/2yYWKhY 
    ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^> 
 (Reporting by Osamu Tsukimori, editing by David Evans) 
 ((osamu.tsukimori@thomsonreuters.com, +813 6441 1857, Reuters 
Messaging: osamu.tsukimori.thomsonreuters.com@reuters.net;)) 
 
Keywords: JAPAN ELECTRICITY/