Japan May Expand Deregulation

The proposed deregulation by a subcommittee of the Advisory Committee for Natural Resources and Energy will affect 60 per cent of total demand for electricity.

Currently, power rates for large-lot commercial users of 2,000 kilowatts or more are decontrolled. Demand from these users, such as big manufacturing plants and office buildings, accounts for nearly 30% of total power demand.

The subcommittee urged allowing electric power companies to set retail prices themselves for users of more than 50 kilowatts but less than 2,000 kilowatts.

The Ministry of Economy, Trade and Industry plans to adopt a schedule for deregulating power rates for such users later this month and submit legislation for necessary legal revisions to the ordinary Diet session to be convened in January.

To promote competition, the ministry will seek to create a nationwide wholesale market and a neutral body that will work out trading rules, monitor whether the rules are followed, and settle disputes.

Regarding deregulation for households and other power users of less than 50 kilowatts, the ministry is as yet unlikely to make a clear schedule.