A government advisory panel commissioned to work out measures for reducing electricity costs held its first meeting July 22, but cautious voices prevailed concerning moves to introduce further competition.

The Electricity Utility Industry Council, an advisory body to the minister for international trade and industry, will hold monthly discussions and compile a report by the end of this year on how electricity costs may be reduced to an internationally competitive level by 2001.

Speaking to the council, MITI chief Shinji Sato emphasized the need to reform and improve cost efficiency throughout the utility industry to introduce further competition within the sector and to maintain the nation’s economic strength. Takashi Imai, chairman of the council and president of Nippon Steel Corp., pledged to make his utmost efforts and called for “candid discussions without any sanctuaries” to create a new system for the nation’s utility industry.

Japan’s electricity costs — some 30 percent higher for industrial users than those in the United States, Germany and Britain — are one reason for the continuing hollowing out of Japanese industry, according to the ministry. During the discussions, however, many council members voiced concerns about raising further competition in the public utility business.

One member pointed out, for instance, that the introduction of a pure market mechanism would benefit industrial users, but that individual users, especially those living in remote areas, would be forced to pay more than they do now. Meanwhile, some others called for deliberations on emulating other countries’ reforms, pointing out that Japan — which is scarce in natural resources — cannot afford to endanger its energy security.

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