TEPCO Energy Partner Inc. is set to offer household gas supplies from July with a price plan up to 8 percent cheaper than that of rival Tokyo Gas Co., the company announced on May 9.
TEPCO Energy Partner's foray into the domestic gas retail market comes after its liberalization in April, and is expected to spur fierce competition among utilities in the Kanto region.
Under the plan announced on May 9, TEPCO Energy Partner -- a subsidiary of Tokyo Electric Power Company Holdings Inc. -- will offer its "Toku Toku Gas Plan," in which the gas rate is set at 3 percent cheaper than Tokyo Gas's general plan, and a maximum 8 percent cheaper with the 5 percent limited discount for the first year of service included. Customers who subscribe to both gas and electricity services offered by TEPCO Energy Partner will also benefit from an annual 1,200 yen discount on power bills.
The company started accepting applications from customers in Tokyo and Kanagawa Prefecture on May 10, and plans to expand service areas beyond those two prefectures in the future.
According to the firm's estimate, if a household using 400 kilowatts per hour of electricity a month with a 40 ampere contract and 40 cubic meters of gas monthly signs up with TEPCO Energy Partner's new gas-electricity set plan, it will pay 7,600 yen less a year than staying with a combination of TEPCO's conventional energy plan and Tokyo Gas's general rate plan. Depending on gas usage conditions, however, in some cases it will be cheaper to use Tokyo Gas's discount rate program.
Tokyo Electric Power Company Holdings has been pressed to boost earnings to cover decommissioning costs and other expenses stemming from the Fukushima No. 1 Nuclear Power Plant disaster, and gas retailing is the pillar of the company's revenue growth strategy. TEPCO Energy Partner aims to win 1 million new contracts by the end of fiscal 2019.
Because TEPCO does not have equipment for processing liquefied natural gas into urban gas and commissions the processing to Tokyo Gas, however, TEPCO Energy Partner can sell only a limited volume of gas up until fiscal 2018, when the utility's own processing facility will be completed. Therefore, the utility has set the target contract number for fiscal 2017 at a humble 40,000.
In the Kansai region, Kansai Electric Power Co. and Osaka Gas Co. have been vying for customers.