he full liberalization of electricity able to do so since April 2004 and 8 trillion yen. Combined with the T retail market started on April 1. April 2005, respectively – now, finally, market that had been liberalized in a The media has provided coverage on households and stores categorized as phased manner up until now, the total new-entry power companies and their “low voltage” can tap the same benefits size will be approximately 18 trillion services, but do you know the details? of selecting yen. Including the relevant services Until now, households and stores could we can expect an even larger positive only purchase electricity from the power The vitalization of the economic effect. companies in their region. However, the electricity market benefits The liberalization of electricity will be a market has now been opened and entry society as a whole major turning point for Japanese society Full liberalization into the electricity retail business fully It is expected that the full liberalization as a whole. In the following pages, let’s liberalized as of this spring, allowing all of electricity retail market will provide go through relevant information on how begins! consumers to freely select which power wide ranging benefits listed below to navigate and think about this new Clever companies they will buy electricity from. system. for example. It is considered that While the liberalization began some time competition among many business ago for mass consumers – large-scale operators drives increased efficiency factories, department stores and office forward, such as through reduced buildings categorized as “extra-high prices and improved services. voltage” became able to freely select a Furthermore, such vitalization of the power company in March 2000, while market is also closely related to the techniques for medium- and small-scale factories and growth of the Japanese economy. The medium- and small-sized enterprises size of the market that will be opened categorized as “high voltage” were with this liberalization is approximately purchasing You can keep electricity expenses down

With many business operators entering the electricity retail market, electricity competitive market principles will take hold, and the price of electricity will be suppressed to the minimum level. Likewise, with competition among utility companies over rate You can choose a power plans and services, the ability for company consumers to purchase electricity Make your choice today at more reasonable prices will increase.

You can choose a power company according to your needs, such as the desire to You can save electricity switch to a power company offering lower prices, to select according to your lifestyle the utility company from your hometown, or to use Utility companies are starting electricity generated in an What does the full liberalization of the electricity retail market mean? to offer plans that provide environmentally-friendly way. different rates for different The quality of electricity is What will change, who will benefit, why and in what way? periods or days of the week. basically the same among all Selecting a plan according utility companies. This new system allows households and stores to select an electricity provider that best to your lifestyle, such as using less electricity during meets their preferences. Here we explain the new system in an easy-to-understand way. the daytime or using more electricity on weekends, Cleverly utilizing the benefits of liberalization stands to improve one’s everyday life. will lead to easy energy conservation and wallet- friendly electricity savings.

04 METI Journal Clever techniques for purchasing electricity METI Journal 05 It’s not too late! Which will you choose? How to switch your electricity provider New plans and services are

What do you specifically need to do to sign up with a different utility company? emerging one after another! There is nothing difficult about the process. Let’s go through the general flow. The market is revitalized with companies in various industries and municipalities entering the business of electricity retailing! A wide variety of new rate plans and services are now being offered.

STEP Install a smart meter Bundle discount Time period discount Replace the existing meter with a smart meter. Apply for it with the newly selected power company, and the regional power company you currently use will send you a notice on the scheduled Companies are How much electricity is replacement date. The replacement is free of charge in principle offering services with used in what hours may 1 (there may be cases where a fee is charged for the replacement discounted rates by differ according to family work). contracting electricity structure and lifestyle. STEP in combination with Therefore, there are plans other services that are with different electricity currently being used by rates for different times households, including of the day and week, gas, mobile phone, such as discounted rates internet, and CATV. during the morning or 2 discounted rates at night.

Compare and choose Renewable energy generation service Local production for local consumption

First, compare factors such as price, service, environmental friendliness, etc. and select a power company that best meets your There are also power There are also regional preferences. Then, apply to switch through the service counter, companies mainly selling power companies call center, or website of the company. Your newly selected power electricity generated with being founded mainly company will carry out the procedure for leaving your current utility renewable energy, such by local governments company. as wind power, solar such as prefectures or power, water power, and cities. By purchasing Make a smart choice and enjoy the geothermal heat. These electricity from the options are attractive to local electricity retailers advantages of liberalization! people who would like to in your region, you STEP live on environmentally- can also contribute to As explained above, it doesn’t take much time or friendly energy resources revitalizing the local effort to switch to a new power company. Start by or want to support the industry. considering why you want to switch. Will you select a diffusion of such energy. company with lower prices, or a company with more 3 satisfying services? The purpose will vary from household to household. The role of a “smart meter,” which supports the electricity service Of course, you don’t need to feel rushed, because electricity will be supplied as always even if you don’t do anything. However, it is also true that you It used to be difficult for rate plan for the household. Allows for [TEPCO] [KEPCO] can enjoy the advantages of the liberalization by households to determine what A smart meter is also beneficial measurement selecting a power company and rate plan that suits amount of electricity was used for the power company. Because every 30 minutes your household best. Therefore, it is recommended to in what hours, on what days. it can transmit information on and remote meter thoroughly consider your options. However, by installing a smart its own, there is no need for reading! Electricity is supplied For your information, you do not need to install a meter, you can understand employees to visit the meter new electricity cable when switching to a new power electricity use every 30 minutes. in person in order to obtain From the date specified under the contract, electricity will be company. In addition, even in the unlikely case of the Visualization of household readings. Also detailed data on supplied from the newly selected utility company. The period from newly contracted company going bankrupt, electricity application to the actual switching of companies will be about electricity use should lead to electricity use in each household two weeks when replacement of a smart meter is required, and will continue to be supplied by your original provider. higher awareness of electricity provides valuable information about four days if a smart meter is already installed (times may vary A new company should be commencing service in saving. The data should also be for the development of new rate Metrological Communication Metrological Communication function function function function depending on application volume). your region now. Please make a smart choice. useful for considering the best plans and services.

06 METI Journal Clever techniques for purchasing electricity METI Journal 07 08 METI Journal introducing recommended rate plans plans rate recommended introducing increasing customer satisfaction customer increasing consumers. and offerconvenienceto companies’ businessgoals thatsupportpower services Let’s take alookatthe attention. valuable are drawing public make liberalization evenmore that Related newservices New services to demand, and supply balancing Clever techniques forpurchasing electricity support electricity and market liberalization list ofrateplanswillbegenerated. answer questionsonthewebsite, a site, isoneofsuchservices.After you “Enechange,” anelectricitycomparison algorithm forecasts withanoriginal electricity consumption Improve theprecision of Enechange Co., Ltd./Kakaku.com, Inc. a prompt launch ofelectricityretail management systemthatenable and electricitysupply&demand information managementsystem NEC provides toclients bothcustomer new-entry powercompanies Provide cloudservicesto NEC /OpowerInc. company andrateplanforyou. service willrecommend apower and householdcharacteristics,the code, currently contractedcompany, entering informationsuchasyourzip are onlineservicesthatcanhelp!By trouble comparingrate plans?There are inyourregion? Orare youhaving You don’t knowwhatpowercompanies electricity retailers’ business. services are emergingtosupport forecasting. Inthiscontext,various as ensuringreliable electricitydemand also otherseriousconsiderationssuch the electricityretail business,there are previously havedirect connectionwith retail marketentrantsthatdidnot acquisition. Atthesametime,fornew for powercompanies’customer Improving servicesisimportant B B to to B C power companies. power methods and technologies unique Using to increaseto competitivenessthe of Tells matches best that plan rate the your household your Inc. whichisparticularlyadeptinreal- Insight, cooperates withSpace-Time of theliberalizedenergymarket.It from theU.S. that are frontrunners work incollaborationwithcompanies In addition,NECalsohasstartedto with theirbusinesssizes. flexible solutionsoffered inaccordance and backupcustomers’businessby services tomeetcustomers’need, NEC therefore provides cloud-based create originalsystemsfrom scratch. investment andeffort forthemto processes. Itwouldtakesubstantial supply anddemandbalancemonitoring processes suchaselectricitybilling, are notfamiliarwithnewbusiness entering from different industries,they business. Especiallyfornewretailers forecast electricityusebyregion andby meteorological data,thecompanycan households andcombiningitwith data collectedfrom severalthousand By statisticallyanalyzingtheHEMS to forecast electricityconsumption. an originally-developedalgorithm precision ofratesimulationbyusing Enechange isthatitimproves the The definingcharacteristicof also beaccessed. reasons forrecommended planscan breakdown offorecasted savingsand resources. Informationsuchasthe is available,andmanyotheruseful bundle discountand/orpointservice amount thatcanbesaved,whethera Information shownincludesthe the mobilephonecarrierandgas utility even more optimalplan,youcaninput you pay. Further, inorder toselectan discounted amount,andactual cost check thebasicrate,metered rate, the rate”inplanshown,youcan For instance,byclickingthe“detailsof understanding. focuses itseffort onimproving easeof rate planfrom theusers’viewpoint,and information necessaryforselectinga market. Thecompanystreamlines to thenewlycompetitiveelectricity applies theknow-howithascultivated providersInternet andinsurances, and PCsbutalsoservicessuchas products suchashome appliances a longhistoryofcomparingnotonly comparison service.Thecompanyhas has alsostartedanelectricityrate comparing awiderangeofproducts, Kakaku.com, knownasasitefor from thecustomer’s view Pursue easeofunderstanding energy usagedata.Thisenables customers basedonanalysisoftheir providing usefulinsights toend-use Opower’s servicesprimarilyinvolve countries around the world. 100 electricityandgasproviders innine company hasgrown tosupportover since itsfoundationin2007,the also beganintheUnitedStates,but and theircustomers.Opower’s services building” betweenelectricityproviders Opower enables“superiorrelationship- by utilizingbehavioralscience Improve customersatisfaction to theefficiencyuseofenergy. developing newservicesthatcontribute energy storagewithICT, NECis technologies suchasHEMSand By combiningNEC’s existing unbundled. and generationofelectricityare wheremarket inCalifornia, thesupply customer satisfactioninthecompetitive District, anentitythathasrealized high data, andSacramentoMunicipalUtility time analysisandvisualizationofbig time period. to dosoare increasing steadily. provider viatheirsites,andapplications actually switchingone’s electricity Both companiesoffer aservicefor from around earlyJanuarythisyear. and Kakaku.comincreased sharply tothesitesofbothEnechange Visits be saved. out thetotalamountthatcanpotentially company thatyoucurrently usetofind neighbors,” substantiallychangeshow more electricity thanyourmostsimilar such as“yourhouseholdisusing15% providing feedbackwith socialcontext, reporting energy usageamountsasis, For example,ratherthansimply manner andmodeofcommunication. and actedupondependslargelyonthe science. Howinformationisperceived is theirinnovativeuseofbehavioral are indemandthroughout theworld One ofthereasons Opowerservices customers’ confidence. advisors, offering servicesthatincrease providers tobecometrustedenergy Customer information management information Customer Management of electricity supply supply electricity of Management Compare various plans at once! at various plans Compare the electricitymarket. addition toplancomparison,there are alsoabundantresources availabletounderstandmore about electricity expense,andhoursspentathome.Itisalsopossibletosignupfor aplanviathesite.In The informationentered viathewebsiteincludeszipcode,numberofhouseholdmembers, current CLICK! and demand and Various mechanisms to support electricity retailors electricity support Variousto mechanisms Supporting the prompt launch prompt the Supporting ● Cloud-based Cloud-based (in Japanese) “Enechange”site comparison Electricity  services of business of Electricity Electricity retailer Strengthening connections with end-use customers customers end-use with connections Strengthening

providers. important allyinselectingenergy utility are becominganeverincreasingly basedservices It seemsthatInternet next year.” at theliberalizationofgasmarket “we wanttodevelopaservicetargeted As forthefuture, bothcompaniessay, competitors. successfully differentiated itselffrom its providers everyyear, thiscompanyhas of tencustomersswitchenergy competitive marketwhere oneout an illustrativeexample.Inahighly customer satisfactionprovides using theseveryservicestoincrease One energyprovider intheU.K. and understood. and whetherthisinformationisread CLICK! CLICK! via big data analysis and behavioral science and behavioral analysis big data via CLICK! ● ● NEC smart energy smart NEC Opower Inc. Opower   ● (in Japanese) Kakaku.com comparison electricity rate  METI Journal

09 What is required from consumers in Let’s ask an expert! What is uncertain about electricity liberalization? electricity liberalization? I want to find out what retailers are operating in my region! Above all, we must make an & Q A The regions to which power companies supply electricity In order to make an “independent selection” differ by each electricity retailer. Please contact each power independent choice. We answer questions from consumers company first. The registration list also shows information on the supplied region and sales to households of each retailer. We interviewed Mr. Ryuichi Inagaki, a lawyer who serves as acting chairman at the Electricity and Gas Market Surveillance CLICK! ●Frequently asked CLICK! ●List of registered electricity retailers Commission (EGC), inaugurated in September 2015, about the significance of selecting electricity company and its impact in society. questions (in Japanese)

The Electricity Business Act refers to those who use electricity Not simply energy, but something with greater as “users.” On the other hand, power companies “supply” 1 potential If I’m living in an apartment, can electricity. In this “user” and “supplier” relationship, an On the other hand, promoting fair competition among I select the power company? equitable transaction environment cannot really be felt. Such business operators is also one of our important roles. In a situation of supply and use that had continued for over 60 Japan, electricity has been supplied in a safe and stable years has now changed significantly with the introduction of fashion, even by worldwide standards, for a long time. You can buy electricity from another power the full liberalization of the electricity retail market. That is how company even when living in an apartment We are determined to create an attractive market while I understand the situation. (housing complex) if you are contracting maintaining a commitment to important cultural and asset individually with a utility company. However, if If this is the case, in addition to reliably supplying electricity, considerations. Are there cases where an all the households of the apartment building power companies must now think harder to understand what are under a package deal contract (high It is expected, for instance, that services utilizing big data and expensive cancellation penalty the consumers are requiring. Consumers must also be aware voltage bulk electricity receiving) through a IoT will develop along with the diffusion of smart meters. Also, management association, the procedure that their position is now more than one of simply “user” of is imposed? new business models should emerge through collaboration becomes different. Please check the electricity. among business operators of different fields. Electricity is management association of the housing 3 complex for details. Creating a healthy market with registration not merely energy, but is becoming something with greater It is required by law that power companies system and business operation guidelines potential to make our lifestyles even better. explain rates and conditions of cancellation This full liberalization of electricity retail market, which is a by providing relevant written documents. The act of selecting a power company to buy electricity from part of breaking through bedrock regulations, may serve as Please check the details before signing Who should I contact during an is indicative of the consumer’s will as it relates to what kind of a new contract. Setting an unreasonably a catalyst for vitalizing Japan. To realize this, I would like the electricity outage?2 electricity system they wish to support. Cumulatively, this may expensive cancellation penalty is subject users of electricity to select their own power company in an even have an impact on decision-making about the national to a correction order by the Minister of independent manner. Electricity is necessary for all people. the power source mix. Economy, Trade and Industry. The significance and influence of its selection is quite large, First, please contact the power company that you have entered into The EGC sets a certain framework in the market so that such and can be a driver for social change. a contract with. There are basically two types of causes of electricity liberty of consumer choice is securely protected. The main outage: when there is a problem in electric facilities of the household The EGC continues to supervise the electricity market while measures are the “registration system” for electricity retailers (inside), and when there is a problem in electricity transmission and hearing opinions from consumers. We would like to develop distribution facility (outside). You can also request an inquiry by the and the formulation of rules such as the “Guidelines on 4 an environment in which each individual can make a selection general transmission/distribution business operator in the region. Electricity Retailing Business.” without worry. Also, various kinds of information are provided via websites and briefing sessions held throughout Japan. There are also I’m satisfied with my current I want to check the power exclusive inquiry counters. Please do not hesitate to consult Ministry of Economy, Trade and Industry electricity plan. Will the current rate source mix. Where can I get the EGC if you have any concerns, no matter how small, Acting Chairman, Electricity and Gas Market about switching to a new power company. Surveillance Commission remain in the future? the information? We are working with enthusiasm to create a healthy electricity Lawyer market together with consumers, while also directly giving Mr. Ryuichi Inagaki At least until March 2020, the current Disclosure of the power source mix, or instructions to business operators. Assumed his current post in September 2015 after becoming a member of the Institutional general rate plan remains a transitional the breakdown of what kind of electricity Design Working Group, Electricity System measure. Some of the rate plans may the power company is selling, is stated Reform Subcommittee change from the current plan, so please as the “desirable act” in the “Guidelines confirm with your electricity company. on Electricity Retailing Business.” Please check the website or brochures of each 5 6electricity retailer. 10 METI Journal Clever techniques for purchasing electricity METI Journal 11 METI, Opinions of the person in charge What is the “Guidelines on Electricity Retailing Business”?

METI has been formulating multiple guidelines Desirable acts Problematic acts We remain in the background to support toward the full liberalization of electricity retail market. The “Guidelines on Electricity Retailing Disclosure of appropriate “standard menu” Failing to show information on which the billing Business” is one of them. These guidelines include is based, such as electricity consumed Disclosure of the example of monthly the “problematic act” and “desirable act” from expenses under average use of electricity Soliciting customer use a service based on consumers, who are the central players. the perspective of fair market trade. For each misleading information such as “our company’s item such as “information provision,” “operation/ Explanation of the possibility of a penalty electricity is less vulnerable to power outage” contract format,” “details of retail supply contract” imposed with the cancellation of an existing “The central player of liberalization is consumers,” says Mr. Ryosuke Fujioka of the Agency for Natural Resources and Energy. contract when switching power companies and “response to complaints and inquiries,” the Failing to show the electric power source ratio Mr. Wataru Sakurai of the Executive bureau of the Electricity and Gas Market Surveillance Commission (EGC) keeps watch on guidelines demonstrate the approach of consumer plan or the past performance in marketing protection. The guidelines can also be used by Disclosure of the power source mix on the focusing on the power source mix the promotion of fair practices in the market. website of the company consumers when selecting a power company.

-- What is your role in this electricity immediate control of the minister. are different products to choose from. liberalization? I believe that the main purpose of the Fujioka: I belong to the Electricity Implement bold reform under liberalization is to create a situation Market Development Office of the a realistic schedule wherein consumers can feel that their retailer”. market has begun. Please express understand the actual situation, Fujioka: In terms of a market without your wishes toward the future. and make corrections flexibly where Agency for Natural Resources and -- What is your view of electricity living becomes better with the reform of worry, I think it is important that the Sakurai: The “Guidelines on Electricity necessary. Because consumers will Energy, and Mr. Sakurai belongs liberalization as someone actually the electricity system. existing rate structure is maintained Retailing Business” (refer to the column play the central role in the liberalization, to the Electricity and Gas Market engaged in the project? Sakurai: Of course reduced electricity after April 2016. Considering the U.S. above) was formulated this January, we will also hear the opinions of those Surveillance Commission, and we have Fujioka: The “full liberalization of expenses are one of the benefits, and European cases, markets ahead of and the “Guidelines on Fair Electricity who use the electricity. different roles. The Agency for Natural electricity retail market” started in April but what is most important is that us in terms of electricity liberalization, Trade” was also revised in March. Resources and Energy is mainly in 2016 and is the second phase of the now there are new plan lineups. Just Fujioka: That’s right. We should remain we can expect a certain degree of charge of institutional design necessary electricity system reform, following the like a menu at a restaurant, you can The Guidelines show “problematic acts” in the background, instead of taking the confusion as the transition takes for electric system reform and the “establishment of the Organization for choose what you like from the lineup. and “desirable acts.” Hearing and on- initiative for innovation. However, we place and thus should set a certain operation thereof. the Cross-regional Coordination of At the same time, the act of making a site inspection are also implemented if believe that we can promote innovation grace period. The basic stance of the Sakurai: On the other hand, the Transmission Operators implemented in selection comes with responsibility. We there are any problems. The Guidelines through arranging the environment. electricity reform is to implement bold EGC supervises the electricity market April 2015 (refer to the diagram below). must create a market where we can try to protect the interests of individual reform under a realistic schedule. For example, a “negawatt trade and sets rules for the market. As the make choices without worry, and it is consumers while placing priority on the The “legal unbundling of the electricity market” is scheduled to be created in commission, we continuously oversee also necessary to let consumers know Sakurai: At least up to March 2020, independence of the companies. transmission and distribution sector” the future. We would like to create new the market to ensure that fair trade about the mechanism of the market. the existing general rate plan will Fujioka: The Guidelines precisely is being scheduled for 2020. Electricity business opportunities by establishing takes place. In addition, the EGC also We try to be creative, for example remain. The EGC supervises the provide a structure that adheres to becomes an “ordinary” product/service a market in which saved electricity makes proposals to the Minister of at briefing sessions held throughout competitive situation of the market, the purpose of adequately providing by taking steps one at a time like this. can be traded. I expect that unique Economy, Trade and Industry on setting Japan, to raise awareness, such as while also watching closely how far information so that the alternatives for It used to be a market with only one challengers who can present new value rules, as an organization under the “Beware of this kind of electricity the liberalization diffuses among consumers increase. What is important product on the shelf, but now there to consumers will emerge from such consumers, and responds on a case- moving forward is to rotate the PDCA initiatives. by-case basis to any problems. cycle securely by considering the Because it is an important reform that purpose of the reform. In order to do Entire schedule of the energy system reform involves all citizens, it is imperative to so, in this electricity system reform, a carry it forward carefully. verification period is set to check the progress for each process. The reform April 1, 2015 April 1, 2016 April 1, 2017 April 1, 2020 April 1, 2022 Rotate the PDCA cycle by is only partially complete. The most setting a verification period important changes are yet to come.

Third phase -- Guidelines targeted at electricity Sakurai: Also, for setting First phase Second phase Legal unbundling of the companies are developed, and finally electricity transmission and Electricity Establishment of the Full liberalization the full liberalization of electricity retail rules, it is necessary to Organization for the of electricity retail market distribution sector Cross-regional Coordination of Hereafter, the competitive Transmission Operators Period for transitional measure situation of each utility company is confirmed and the period ends (From left) Full liberalization The Electricity Market Development Office is in charge City gas Legal unbundling of the of gas retail market gas pipeline service Mr. Wataru Sakurai, of institutional design necessary to accomplish electric system reform and the operation thereof. The EGC (major three companies) Section Head, Policy Planning Abolition of Regulated tariffs remains for supervises the electricity market so that healthy Division, regulated tariff utility companies with competition takes place and makes proposals to set Executive bureau of the Electricity insufficient competitive rules in order to lead the reform to success. situations and Gas Market Surveillance Commission Market Establishment of the CLICK! ●Agency for Natural Resources surveillance Electricity Market Operation also starts for gas and Energy commission Surveillance Commission Mr. Ryosuke Fujioka Full liberalization of electricity Senior Section Head, Electricity * The name is changed to Electricity and Gas Markets Surveillance Commission (EGC) retail market Market Development Office, Policy Planning Division, CLICK! ●Electricity and Gas Market Electricity and Gas Industry  Department, Surveillance Commission Agency for Natural Resources Full liberalization of electricity and Energy retail market (in Japanese) 12 METI Journal Clever techniques for purchasing electricity METI Journal 13