Bloomberg: Japan’s Utilities And Their Customers Favored by Falling LNG

Japan’s biggest power utilities, emerging from four years of gloom, have cut electricity rates as cheaper natural gas benefits both the bottom line and customers.

The global collapse in energy prices and abundant supplies of liquefied natural gas are a boon to Japan, the world’s largest LNG importer. The utilities that use the biggest proportion of LNG are benefiting the most, and will lower electricity rates for households and industry in August.

Tokyo Electric Power Co. is one of six utilities to cut rates in the most recent round. Tepco accounted for over a quarter of the nation’s record 89 million metric tons of LNG purchased in the year ended March 31. Effectively a ward of the state after the 2011 disaster at its Fukushima plant, profit expectations for the utility for the year ended March 2016 have surged threefold in the past twelve months.

For Japan’s third-largest utility, Chubu Electric Power Co., profit forecasts have more than doubled. Chubu accounted for about 15 percent of LNG imports and is the most dependent on the fuel of all Japan’s utilities. MORE