News Navigator: How will household electric bills in Japan change this July onward?

The Mainichi Shimbun answers some common questions readers may have about household electricity bills in Japan, which are likely to increase in July.

Question: I heard that electricity bills will go up in July. What kind of increases are expected?

Answer: Average household electricity bills for July (covering June usage) will increase compared to the previous month for all 10 major electric power companies. Most of them will raise their bills by around 400 yen (about $2.50), with Tokyo Electric Power Company Holdings Inc. (TEPCO) increasing its bills by 392 yen to hit an average use case of 8,930 yen (roughly $56). For eight power companies in Hokkaido, Okinawa Prefecture, and the Tohoku, Hokuriku, Kansai, Chugoku, Shikoku and Kyushu regions, bills will see record highs.

Q: Why are the bills going up so much?

A: The increases are largely due to the national government’s decision to stop providing subsidies that started in January 2023 as a countermeasure against high costs of living caused by Russia’s invasion of Ukraine and the weak yen. This March, the government decided to end the assistance after electricity bills went out for May because price increases for thermal power generation fuels, such as liquid natural gas, crude oil and coal, had subsided.

Q: What will happen in the future?

A: Prime Minister Fumio Kishida announced on June 21 that subsidies would be reinstated for power consumed from August to October as “emergency assistance to overcome the extreme heat.” As a result, the household financial burden is expected to be temporarily lightened. However, it is difficult to foresee what the future holds, as fuel prices are greatly affected by the situation in the Middle East and other factors.

Q: So, bills could go up again?

A: Yes. As well, a “renewable energy levy” to cover the cost of power companies purchasing electricity generated from renewable energy sources at a higher price is added to rates to promote the spread of renewable energy. The unit price of the levy, determined by the government each fiscal year, has been rising as the introduction of renewable energy expands. In fiscal 2023, this was 1.4 yen (about 1 cent) per kilowatt-hour, down from 3.45 yen the previous fiscal year due to effects of the Ukraine crisis, which caused electricity prices to rise. However, as the impact of the crisis has subsided, the levy rose by more than 2 yen to a record 3.49 yen per kilowatt-hour in fiscal 2024. The burden is likely to continue.

(Japanese original by Nami Takata, Tokyo Business News Department)