Restructuring of the electric power industry and the current state of the power market in Japan

Restructuring of the Japanese electric power industry has been carried out in stages, and in April 2005 a third-step deregulation measure was implemented to expand the scope of liberalization of electricity retailing, allowing non-utility power producers to supply electricity to all high-voltage service customers in the retail market, excluding residential customers and small factories. At the same time, a neutral body tasked with securing impartiality in the use of utility power grids and an electric power exchange started operations. Although it is still too early to draw a firm conclusion about the benefits of the restructured electric power industry, electricity rates, one of the important measures of the implications of restructuring, have dropped significantly. Electricity transactions on the electric power exchange have also been growing in volume gradually over time. The results of institutional reforms to date are now being assessed in order to start discussion in 2007 on the complete liberalization of the retail market to include all customers.