Tokyo ponders splitup of utility firms

That Tokyo residents have but one option for electrifying their homes has long been an accepted reality, as has been the position of Tokyo Electric Power Co. as the metropolis’ supplier.

But things might be different in the next century. Discussions are under way to explore the possibility of splitting up the nation’s 10 power utilities. “The issue has long remained taboo within the Natural Resources and Energy Agency,” said Shinji Sato, minister for international trade and industry. “But I believe this is an issue that we must study with great interest.” He contends that such a breakup may be necessary in order to substantially reduce electricity costs and maintain Japan’s competitiveness in the global market.

The proposal, if realized, would bring more competition to the hitherto heavily regulated electricity market and effectively threaten the de facto regional monopolies enjoyed by the nation’s 10 power suppliers. But it remains unclear how far Sato intends to push the idea, and questions are being raised about the rationale for carrying out such drastic deregulation in resource-scarce Japan. Still, his remark has brought to the fore the crucial question of how Japan can achieve its three potentially conflicting goals — economic growth, environmental protection and energy security.