Japan prepares for reform of troubled power industry

Reform to focus on breaking-up regional utilities.

Japanese lawmakers are prepared to debate legislation that calls for breaking-up power companies by separating their generation and transmission assets. Deputy Economy Minister Yasutoshi Nishimura said a bill on electricity industry reform will be submitted to the Diet in its autumn session.

He also said the government has pledged to produce a new energy strategy before yearend. The future of nuclear power in Japan remains certain, he noted.

Japan’s 10 regional utilities dominate the country’s electricity production, transport and distribution, and claim their control of both generation and transmission makes for a more stable and secure electricity supply even as it hinders competition and lower prices.

Japan is looking at ways to lower electricity costs after greater reliance on imported natural gas after the Fukushima nuclear disaster resulted in considerably higher power prices.