KANSAS CITY, Kansas — U.S. utilities are paying close attention to Japan’s $150 billion electricity market, where rates are high, monolithic utilities unready for competition and rival competitors virtually nonexistent.

Consider giant Enron Corp., one of the most opportunistic utilities in the U.S., which is looking to trade energy in Japan. It is asking Japanese companies to consider using Enron’s Internet trading site, EnronOnline, for electricity and a whole lot more.

Japan is taking on all comers. Just this spring, the country took its first steps toward opening its energy markets.

Now power sellers are free to go after companies who use more than 2,000 kilowatts — or about one-third of Japan’s electricity market. That means $50 billion a year is up for grabs in a conveniently compact market: Just 8,000 factories, skyscrapers and commercial establishments account for that enormous demand.

Japan has its pluses and minuses. It has the second-largest economy in the world and logically is the second largest energy user, burning up 1 trillion kilowatt-hours a year. But it is also a country whose markets are often difficult to penetrate.

In addition to Enron, the globe-straddling Vivendi conglomerate of Paris has allied with Japanese companies to move into the opening markets.

U.S. utility executives, many of them eager to expand internationally, would be wise to take two actions.

First, they should assess the opportunities in Japan. It would be foolhardy not to carefully review the chances of successfully competing for a third of the load in the world’s No. 2 industrial power.

Many states during the 1990s maintained a network of economic development representatives based in Japan. It would be worthwhile for utilities to contact state officials for help with an initial market assessment.

For help in conducting a more sophisticated review, utilities should tap into the community of consultants and retired utility industry executives in Japan.

Second, utilities must exert some pressure to make sure their efforts have a reasonable chance of success. Executives and their representatives — including the Edison Electric Institute — should call the Office of the U.S. Trade Representative, which should be informed that U.S. industry expects Japan to live up to its market opening commitments — both overtly and covertly. Too many Japanese promises of liberalization have been subtly subverted through the years.

Consider telecommunications. Japan in past years has been slow to allow foreign wireless providers to get established. Nippon Telegraph & Telephone Corp., Japan’s telecom giant, has squelched the competition. Richard Fisher, deputy U.S. trade representative, has accused NTT of forcing competitors to pay “outrageously high interconnection charges.”

In addition, it has forced customers to pay per-minute charges to connect to the Internet. It is not surprising that the number of Japanese on the Net is about one-fifth the number of Americans, while Japan has half the population of the United States.

Interestingly, while NTT chokes off competition in its own realm, it has a subsidiary, NTT Power and Building Facilities Inc., which has allied with gas companies to enter the newly opened electricity markets. Consider NTT a corporate poster child for Japanese economic irrationality — a monolith that at the same time supports and opposes competition. NTT, the largest electricity user in Japan, wants to buy surplus power for its own needs and to meet the energy needs of other firms.

Crippled by sustained economic stagnation, Japanese officials are more sympathetic than ever before to demands that their economy be liberalized and open to foreign players.

Nevertheless, Ed Feo, a Japan hand and managing partner of Milbank, Tweed, Hadley & McCoy, a leading Los Angeles law firm, says Japan today is “one of the best opportunities in the world.”

Feo has gone to Japan about 20 times, as often as three times a year, to work on electricity issues.

“You have got deregulation starting in Japan, comparable to the late 1970s or early 1980s in the United States,” he said. Japan hopes to benefit from the knowledge gained in opening U.S. markets to more speedily reform its own industry, Feo says.

“The attitude of the Japanese utilities is very similar to what you saw with U.S. utilities,” he continues. “They are trying to reduce budget and head count.”

Perhaps naively, Japanese utilities for now are now overly concerned with losing customers. Ten large regional utilities dominate the market and they are “resistant to regulatory change,” Feo says.

He offers some key advice.

“U.S. companies need to find a strong partner and recognize it is not a place you go into and immediately achieve success.”

That said, the consensus seems be that good deals can be forged, particularly by U.S. firms eager to become independent power producers in Japan.

“I talked to a lot of people in Japan who support that view,” Feo says. “Participants in the market there, they are saying there is room for outsiders to come in. We think that is significant. It has been surprising how much it has moved thus far.”

And where will change bring Japan?

“One end game here is that it could end up looking a lot like the U.S. market,” Feo concludes.

If Japan will look like a U.S. market, it would make sense to have a sizable number of U.S. firms present. They gave us their Walkman and Toyotas. Maybe it’s time we sent our investment bankers, energy traders and IT vendors.