2003 JAPAN LAW: ENERGY DEREGULATION
Keywords: Energy Law, Deregulation, Electric Utility Law
Copyright 2004. All rights reserved Attorney Roderick H. Seeman
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As one part of the government’s plan to push deregulation throughout the economy of Japan, the government is seeking new legislation including amendments to the Electric Utility Law. One of the problems involves certain monopolies or near monopolies which prove obstacles to new entrants and thus restricts competition. In this case the problems in the energy industry involves power transmission lines. In order to achieve this objective, the government will be seeking legislation which will permit the ministries which have jurisdiction over the relevant industry to prevent the abuse of new entrants by assuring fair access to facilities such as power transmission and telephone lines.  Rules will be established under which utilities will make their facilities available to new entrants. The legislation is expected to take effect from fiscal 2005. One of the previous efforts in deregulation was the amendment of the Electric Utility Law. That amendment permitted new entrants in the power generation business. The firms were permitted to produce power independently and sell it to electric utilities or large consumers of electricity. This was an attempt to encourage competition. In order to further improve efficiencies in the energy market, from April 2005 an electricity wholesale market will be created where these new entrants and the long time electric utilities will be permitted to buy and sell electricity. There will be short term and long term contracts traded on the market. One group will be for energy needs the following day with trading in 30 minute contracts and the other will be for one month or longer into the future with trading in monthly contracts.