Tokyo Electric Power Co. (Tepco) has said that increase in electricity bills has become indispensable to cover costs of switching to other sources of power.

Tepco, the leading power utility in Japan, faces huge compensation payments and clean up costs at Fukushima Dai-ichi nuclear plant, which was wrecked in March 11 earthquake and tsunami.

Fukushima crisis forced Tepco to move to thermal power, which is more expensive to generate than nuclear power.

Tepco has plans to increase electricity rates for corporate customers from April next year.

Making the announcement, Tepco President Toshio Nishizawa said, "Taking into consideration the tough situation, we think it is inevitable to ask for an electricity rate rise from next April for corporate customers."

He added that said it would inform corporate customers about the specifics of the rate increases in January.

The power utility also announced that it would apply for the government approval for its plan to increase electricity rates for household customers at the earliest possible.