TEPCO overestimates cost by 618 bil. yen over 10 years: panel

TOKYO, Sept. 29 Kyodo - Tokyo Electric Power Co.'s estimate of costs required to generate electricity has exceeded actual spending by 618.6 billion yen over the last 10 years, a draft report by a government panel overseeing the utility's cost-cutting efforts showed Thursday.
The finding indicated that households in the company's service area may have been overcharged for their electricity use, as electricity rates in the country are decided under a mechanism that allows utilities to pass on power generation costs, such as personnel and fuel costs, plus a certain margin to consumers.
The draft stated that the major reason for the overestimate was expenses for repairing facilities. Fuel costs were not included in the estimate.
The third-party panel is expected to submit the report of its findings as early as Monday, a move which is part of the process through which the company known as TEPCO is to seek financial assistance from a state-backed entity over massive compensation payments related to the nuclear crisis at the Fukushima Daiichi power plant.
The panel said that the difference between the estimate and the actual spending suggests that the cost prediction reported to authorities was ''not appropriate in the first place.''
Under the current pricing method, utilities need the approval of the economy, trade and industry minister to raise electricity rates, while lowering of them only requires notification to the minister.
TEPCO's recent lowering of its electricity rates means that the utility's cost predictions have not been reviewed by authorities over the past 10 years, the panel said, while calling for a review of the current system for determining costs and pricing, which some critics say is leading to higher power bills than in other countries.
The panel also questioned whether TEPCO had conducted sufficient rate cuts in its draft report.