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Japanese Transmission Found Unfair

4/24/2002

LCG, April 24, 2002-Japan's Fair Trade Commission asserted today that the country's electricity transmission system discourages independent companies from participating in the market.

Power producers are subject to a ¥0.3 per kilowatt-hour ($0.0023/kWh) fee when using regional power utility transmission lines.

Newcomers to the electricity industry say the grid-use fees, in addition to supply backup fees paid to electric utilities, hinder attempts to enter successfully into the market.

Fair Trade Commission officials said that the current conditions foster monopolies by hampering competition. The FTC would like the Japanese trade ministry to create a new grid framework and will submit a proposal addressing the issue in June.

In March of last year, Japan's retail market was opened to high-volume industrial and commercial users, who comprise some 26 percent of demand. New retail sellers form only 0.46 percent of the large-lot users market and less than a mere tenth of a percent of the total market. Electric utilities remain relatively vertically integrated, serving their own areas and controlling their respective transmission lines.