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What is Electricity Deregulation?

Joy is living in Japan due to her husband's job. Today she is visiting her friend Misako’s home.

What is Electricity Deregulation?

Joy

Misako, something I hear quite often recently is talk about "Electricity Deregulation." Do you have any idea of what has actually changed?

Misako

From April 1st this year, participation in the retail market for electricity was completely liberalized. Thus, electricity sales are no longer restricted to regionally-based power companies as they were previously. Rather, a great variety of businesses can now market electricity directly to consumers.

Joy

In other words, as consumers we are now able to freely choose from whom we purchase our electricity?

Misako

That is exactly right. Furthermore, through this reform, the companies involved in the market can now offer a variety of different pricing plans and service options. For example, you can select set pricing options that link your electricity charges to your gas and mobile telephone services, etc., and there are also electricity charge plans that incorporate loyalty points, etc. Consumers can even select electricity plans whereby the power provided is generated by more environmentally-friendly means.

Joy

So as consumers we can choose plans and service options that are more in keeping with our lifestyles and personal values. I must say that I like that idea, however, I really don’t know how to selecting a certain service plan from a specific company.

Misako

Well it isn’t necessarily the case that you will have to switch from your current power company or electricity service plan. If you don’t make any specific application to change your present arrangements, you may continue to receive your electricity supplies from the power company that you currently use.

Joy

If people do choose to switch from one electricity provider to another, will there be any construction required?

Misako

As a basic rule, there should be no costs involved in making a switch. However, if a home is not already equipped with a smart meter, a new one will need to be installed in place of the existing electricity meter. Concerning the infrastructure that currently delivers electricity to homes such as power lines, etc., those elements already in place shall be used. Thus, as a homeowner you don’t need to worry about the quality of your power supply declining, or your home becoming more susceptible to power cuts.

Joy

Hearing that offers me peace of mind.

It seems that Joy still has some questions about "Electricity Deregulation."

Joy

So what about for people who live in apartment blocks, will they also be able to switch power companies if they choose to do so?

Misako

If the individual residences in an apartment block are fitted with household electricity meters, then there should be no problem with each homeowner individually contracting with the power company of their choice. However, if the current arrangements are such that the entire apartment block purchases its electricity in bulk, then to switch power companies the confirmation of the apartment block’s management association shall be necessary.

Joy

I see.

Misako

Furthermore, another thing to be aware of is that there may be attempts to swindle naive people using “Electricity Deregulation” as an excuse.

Joy

Swindle? What do you mean? What sort of schemes are there?

Misako

Basically speaking, there should be no costs involved in switching from one power company to another. However, I have heard that there are less than honest businesses that will try and make people pay needlessly by using lies such as "the installation of smart meters costing money" or the switching of power companies requiring “the stringing of new power lines.”

Joy

I see. So we will need to be very careful.

Misako

Yes. If you suspect something dodgy, you should immediately consult with specialists such as the Consumer Affairs Center.

Joy

I will. So in order not to fall victim to a scam, it is also important that we understand the electricity deregulation system.

Misako

That is correct. We have to thoroughly collect accurate information.
Although there will be cases whereby your electricity charges may become cheaper as a result of switching power companies and electricity plans, I also believe there will be cases where the opposite is true. Thus, if you rush to switch over you might regret it later. Accordingly we should all take sufficient time to consider our options.

Agency for Natural Resources and Energy, Ministry of Economy, Trade and Industry
Electricity Market Reform in Japan
http://www.enecho.meti.go.jp/category/electricity_and_gas/electric/electricity_liberalization/(in Japanese only)
■Consumer Affairs consulting service for foreign residents
http://www.shouhiseikatu.metro.tokyo.jp/for_foreign_residents-english.html
■ Electricity Market Surveillance Commission Consultation Service
http://www.emsc.meti.go.jp/english/general/consult.html