Japan govt set to allow Tokyo Elec to hike household rate -Asahi

TOKYO Jan 19 (Reuters) - Japan's government is likely to allow Tokyo Electric Power (Tepco) to raise electricity rates for households to cover fuel costs, the Asahi newspaper reported on Thursday.

The operator of crippled nuclear reactors in Fukushima this week announced rate hikes for businesses by an average 17 percent. In addition to a surge in costs to pay for fossil fuel, it also faces massive compensation and cleanup costs in the wake of the nuclear crisis.

Tepco has said it would also seek rate hikes for households based on a business reconstruction plan to be submitted in March. Unlike rate hikes for corporate users, household rate hikes have to be approved by the government.

The government now believes a rate hike of 5-10 percent for households is necessary to keep Tepco afloat while the utility is seeking a hike of between 10-20 percent, the Asahi said without citing sources.

The government will demand that Tepco take drastic restructuring measures as a condition for raising hikes, the paper said. (Reporting by Taiga Uranaka; Editing by Edwina Gibbs)