Monday, September 30, 2013

Further Electricity Deregulation coming down the pike

Although the first of three proposed electricity deregulation bills was delayed by this summer's Upper House election, progress on the topic continues within METI and its advisory councils.

The METI electricity system reform subcommittee's working group on "system design" held its second meeting on September 19, 2013.  According to materials presented by the ministry at that meeting, retailers of electricity will be subject to a registration (rather than a full approval/license) system.

The registration will allow for greater new entrants than approval/license system, but will still allow for the ministry to sanction retailers who fail to perform their contracts with customers.  In contrast, companies wishing to engage in transmission business will need to apply for licenses and go through a more rigorous approval process.

Retail competition is targeted for residential and small commercial users in 2016.  Prices will remain regulated for some 5-7 years until 2020-22, in order to protect consumers.  There is a lot more detail (in Japanese, of course) in these proposals to work through -- essential reading for anyone trying to understand what is being planned.

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