Half of Japan’s top power firms post net losses as fuel costs soar

Five of Japan’s 10 major power utilities have reported consolidated net losses for the year through March as fuel costs jumped on soaring prices for liquefied natural gas and coal.

Fuel cost increases are reflected in electricity rates months later under the country’s price adjustment system. With energy prices staying high, power companies were unable to fully pass on the higher costs to consumers.

Chugoku Electric Power Co. posted a record net loss of ¥39.7 billion. Tohoku Electric Power Co., forced to halt some power plants by an earthquake off Fukushima Prefecture in March, reported a net loss of ¥108.4 billion, its second-biggest loss.

Hokuriku Electric Power Co., Chubu Electric Power Co. and Shikoku Electric Power Co. also logged net losses.

The five utilities that did not incur red ink — Hokkaido Electric Power Co., Tokyo Electric Power Company Holdings Inc. (Tepco), Kansai Electric Power Co., Kyushu Electric Power Co. and Okinawa Electric Power Co. — also saw their profits tumble.

“Our earnings worsened significantly from our plans due to surging fuel costs,” Tepco President Tomoaki Kobayakawa said Thursday. “It was an extremely severe earnings report.”

Prices of coal and LNG are expected to remain high for a while due to the effects of Russia’s invasion of Ukraine.

Kansai Electric forecast a net loss for the current year through March 2023, while the nine others did not disclose annual projections.

“We will likely face the effects of spiking fuel costs on many occasions throughout the year,” Kansai Electric President Takashi Morimoto said.