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- April 2013
- Cabinet Decision on the Bill for the Act for Partial Revision of the Electricity Business Act
Agency for Natural Resources and EnergyCabinet Decision on the Bill for the Act for Partial Revision of the Electricity Business Act
On April 12, 2013, the Cabinet decided to approve the Bill for the Act for Partial Revision of the Electricity Business Act, and the bill was submitted to this session of the Diet.
In light of the current tight supply and demand situation of electricity due to the effects of the Great East Japan Earthquake, the bill was formulated aiming to take every measure for the secured stable supply of electricity by realizing the expansion of operations of wide-area electrical grids, which is one of the pillars focused on in the Electricity System Reform, as well as to legally clarify the whole picture of the reform, including the specific schedule of implementing such measures.
1. Promoting the Electricity System Reform
On April 2, 2013, the Cabinet of the Government of Japan decided to approve the Policy on Electricity System Reform (hereinafter referred to as the "Policy"), concerning the reform as a whole.
The Policy sets the goals of the reform as follows:
1) Securing stable supply of electricity,
2) Suppressing electricity rates to the maximum extent possible, and
3) Providing consumers with choices as well as business operators with opportunities to expand their businesses.
To achieve these goals, the reform will be advanced focusing on the following three pillars:
1) Expanding operations of wide-area electrical grids,
2) Fully liberalizing the retail market and power generation, and
3) Further securing neutrality of the power transmission/distribution sector through the legal structural separation method.
The Policy also mentions that the reform focusing on these three pillars will be implemented by dividing it into three phases, while thoroughly studying the challenges to be overcome at each phase and taking necessary measures based on the results of the study, so as to advance the reform effectively.
| Schedule for implementing the measures | Schedule for submitting the bill | |
|---|---|---|
| 1st phase: Establishing the Organization for Operations of Wide-area Electrical Grids (tentative title) |
In about 2015 | To this session of the Diet (formulating provisions for implementing the reform of the 2nd and 3rd phases) |
| 2nd phase: Fully liberalizing the electricity retail market into which retail entities are able to enter |
In about 2016 | To the ordinary Diet session in 2014 |
| 3rd phase: Further securing neutrality of the power transmission/distribution sector through legal structural separation; Fully liberalizing electricity rates |
By about 2018-2020 | The Government of Japan shall aim to submit the bill to the ordinary Diet session in 2015. |
2. Purpose of the bill
Based on the Policy, the bill aims to 1) take measures to promote the operation of wide-area electrical grids; and 2) review the system concerning wheeling services for in-house generated electricity (self-consignments) well as to 3) review the system concerning the order to restrict electricity use, in order to strengthen preparation for a possible tight electricity supply-demand situation, all of which are to be carried out in the first phase of the reform.
Furthermore, 4) the supplementary provisions for implementing measures in a step-by-step manner related to the full liberalization of the electricity retail market into which retail entities are able to enter (second phase of the reform), the further securing of neutrality of the power transmission/distribution sector through legal structural separation, and the full liberalization of electricity rates (third phase of the reform).
3. Outline of the bill
The four major measures to be taken for the reform are provided in the bill as follows:
Measures related to the main provision
1) Measures to promote the operations of wide-area electrical grids
[i] Establishing the Organization for Operations of Wide-area Electrical Grids
[ii] Reviewing the supply order issued by the Minister of Economy, Trade and Industry
2) Reviewing the system concerning wheeling services for in-house generated electricity (self-consignments)
3) Reviewing the system concerning the order to restrict electricity use
Measures related to the supplementary provision
4) Developing provisions for implementing the reform in a step-by-step manner
[i] Based on the Policy, stipulating the timing for submitting the bill and for implementing the measures in the second and third phases, while thoroughly studying the challenges to be overcome in each phase and taking necessary measures based on the results of the study, so as to advance the reform effectively
[ii] Stipulating the matters which require attention, such as measures taken to prevent fund-raising difficulties and measures to secure the stable supply of electricity, which are described in the Policy
Release Date
April 12, 2013
Division in Charge
Policy Planning Division & Electricity Market Division, Electricity and Gas Industry Department, Agency for Natural Resources and Energy