Over 200 firms have applied for registration as power retailers ahead of January, when those registered become able to accept applications for power contracts with households prior to the full liberalization of power retailing in April.
Gunning to take a slice of the ¥8 trillion retail market, currently dominated by big regional power companies, the newcomers, mostly from outside the electricity industry, are ready to attack the old guard with lower prices.
The new entrants include major gas company Tokyo Gas Co., telecommunications carrier KDDI Corp. and oil distributor JX Nippon Oil & Energy Corp. Convenience store operator Lawson Inc. will also start electricity retailing in a tie-up with trading house Mitsubishi Corp.
As of Dec. 21, the combined capacity of electricity supply by newcomers reached 12.4 million kw, equivalent to the capacity of a middle-ranking supplier among Japan’s 10 major power companies, according to the industry ministry.
For example, a family of three living in a house and using 4,700 kw of electricity per year can annually save about ¥5,000 in electricity bills if they switch from Tokyo Electric Power Co. to buy electricity from Tokyo Gas in a package service tied to the firm’s city gas supply.
“We’re ready to flexibly review our pricing menu based on customer reaction,” a Tokyo Gas official said.
Tokyu Power Supply Co., a Tokyo-based unit of railway operator Tokyu Corp., plans to set its electricity rates at levels up to 5 percent lower than those offered by Tokyo Electric.
Osaka Gas Co. is preparing a discount electricity service for customers that will conclude long-term contracts. Rates will be about 5 percent lower than those at Kansai Electric Power Co., which mainly covers the Kansai region, including Osaka.
Some newcomers such as Tokyo Gas are aiming mainly at households that use relatively large amounts of electricity. Because of this, there will be cases in which household power bills do not go down if they switch suppliers.
KDDI and rival carrier SoftBank Corp. are set to start bundled sales of electricity and mobile phone services, and JX Nippon Oil & Energy a package service to provide electricity and gasoline.
Meanwhile, conventional power companies facing competition by the new entrants are doing everything they can to keep their customers from switching to other suppliers.
To combine its electricity service with other services, Tepco has formed cross-industry alliances one after another, including one with Internet service provider So-net Corp. The power firm is set to announce early next year new price plans designed to meet various customer needs.
Kansai Electric aims to fight back by lowering its power rates after the planned restart of the No. 3 and No. 4 reactors at its Takahama nuclear power station in Fukui Prefecture.
“Competition leads to lower prices and better services, which would be a plus for consumers,” industry minister Motoo Hayashi said, stressing some of the expected benefits of electricity market liberalization.