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6 March, 2015

Japan to Separate Power Generation and Transmission in FY2020

On March 2, the Japanese cabinet decided to approve a bill to partially revise the Electricity Business Act. The bill will be submitted later to the ordinary session of the Diet.

The bill addresses not only the third stage of electricity system reform — including the legal separation of electricity generation, transmission and distribution starting in FY2020 — but also overall reform in energy, including the supply of gas and heat.

The bill would revise laws related to the supply of electricity, gas and heat, providing for various actions, including the following:

  • Ensuring neutrality within the power transmission and distribution sector and gas pipe segments by legal separation.
  • Deregulating retail electricity and gas rates.
  • Fully liberalizing participation in gas retailing.
  • Protecting gas consumers and ensuring public safety.
  • Streamlining the regulation of heat suppliers and protecting consumers.
  • Establishing committees, such as one to supervise the electric power and gas businesses.

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