Tokyo Electric Power Co. (TEPCO) may have overcharged customers of electricity rates for at least the past ten years, a report of the government investigating body suggested. The excess in charging of rates is said to have given the utility company a sum amount of earnings of around 600 billion yen or about $8.2 billion for said period.
The investigation report showed that TEPCO’s profit from overcharging of rates may have been concealed by reporting costs higher than their actual figures.
The rates of electricity charged to consumers are decided by utility firms and submitted to the government for authority to set these charges which usually are approved. The rates proposed by utilities take into account estimated expenses incurred from fuel, maintenance and labor, “with a margin added for profit”.
The government committee investigating TEPCO finances suspected that the utility had overestimated its maintenance costs which may have accounted for the past decade’s 618.6 billion yen total costs, an overblown amount from the firm’s usual expenses.
A few weeks ago, Kazuhiko Shimokobe, the chairman of the investigating body, disclosed that TEPCO overestimated costs to calculate for electricity prices for its customers, Bloomberg reported. Shimokobe at that time did not comment though on the possibility that the exaggerated costs may have meant customers were overcharged with electricity rates.