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Liberalization not so popular with people

April 8, 2017

Only 5.5% of households changed power companies after electricity market’s liberalization in 2016



Only 5.5 percent of households switched to new electricity suppliers after Japan’s retail power market was liberalized in April 2016, industry data shows.

As of the end of March, the number of households that had applied to change power suppliers totaled 3,427,900, or 5.5 percent of all households with electricity contracts.

The ratio was higher in urban regions where competition is stiffer.

At the national level, moves to ditch traditional power companies for new entrants haven’t gained much momentum yet.

In the Tokyo metropolitan area, 1.81 million customers, or 7.9 percent, abandoned Tokyo Electric Power Company Holdings Inc., the highest ratio of all regions. Some 700,000 households switched to Tokyo Gas Co. for the electricity.

In and around Osaka Prefecture, about 720,000 households, or 7.2 percent of the total, dropped Kansai Electric Power Co. for another utility.

In other regions, the defection ratios were lower at about one to two percent. These include the areas served by Tohoku Electric Power Co. Hokuriku Electric Power Co., Chugoku Electric Power Co. and Shikoku Electric Power Co.

Power bills, however, did not fall substantially except in urban regions. The nationwide average of the differences in the monthly rates for an average household was estimated at less than ¥250 in September.

“Competition is unlikely to intensify very much over the coming year or two, except in some of the big-city areas,” S&P Global Ratings Japan Inc. analyst Hiroki Shibata said. “Prices are unlikely to fall markedly.”

New entrants procure electricity mainly from other companies because they do not have large-scale power plants. Industry people say it is important to make wholesale electricity trading active so industry players can buy power at lower costs.



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