Hokkaido and Tohoku Increase Transmission Charges Amid Sluggish Power Demand

Due to sluggish electricity demand, Hokkaido Electric Power Network (PN) and Tohoku Electric Power Network (PN) have submitted a request to the Minister of Economy, Trade and Industry to raise transmission charges, known in Japan as wheeling charges. The revised charges are expected to take effect from October 1 2025.
Hokkaido and Tohoku Increase Transmission Charges Amid Sluggish Power Demand

Hokkaido’s Transmission Charge Revisions and Demand Challenges

In Hokkaido, the average unit price per kWh will increase as follows: low voltage from the current JPY 9.70 to JPY 10.23, high voltage from JPY 4.42 to JPY 4.69, and extra-high voltage from JPY 2.57 to JPY 2.70. The reason for the increase is sluggish electricity demand, particularly from households, which has not recovered since the COVID-19 pandemic. This has led to lower-than-expected income for Hokkaido Electric PN under the revenue cap system for the first regulatory period (FY2023–FY2027). Without the tariff increases it will incur revenue shortfalls, resulting in potential disruption to stable power supply. Although demand growth is expected due to new-generation semiconductor plants and data centers, this demand is unlikely to materialize until the second regulatory period (FY2028–FY2032).
Hokkaido and Tohoku Increase Transmission Charges Amid Sluggish Power Demand

Tohoku’s Wheeling Charge Adjustments and Market Outlook

In Tohoku, the average unit prices per kWh will be: low voltage remains unchanged at JPY 10.31, high voltage increases from JPY 4.25 to JPY 4.40, and extra-high voltage from JPY 1.88 to JPY 1.90. As with Hokkaido, the reason for the increase in Tohoku is lower than expected electricity demand during the first regulatory period (FY2023–FY2027) under the revenue cap system, with future demand outlooks also unfavorable. In Tohoku’s case, there has also been a slump in industrial demand, with manufacturing demand 9% below the forecast in FY2023 and 8% below in FY2024. While large-scale demand, such as data centers and semiconductor factories is expected from FY2025 onward, projections remain lower than initial assumptions.

While Hokkaido and Tohoku Electric Power Networks have announced revisions to their wheeling charges, the other eight TSOs have stated that they currently have no plans to revise their rates.

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As electricity demand trends vary among regions due to the differences in residential and industrial use, and the type and size of renewable energy sources (e.g., Hokkaido has vast land availability for large-scale wind and solar projects), these transmission price adjustments are expected to be carried out over time, which creates regional differences in implementing corporate PPAs.

Shulman Advisory has extensive experience advising clients about Japanese energy markets, including corporate PPAs and their regional differences. If you are interested in learning more about our services, please contact us at info@shulman-advisory.com.