The latest threat to the nation's biggest utilities is growing in rural communities like Miyama, a town in Kyushu with a population of about 38,000. It may spread to the big cities next.
Tired of its citizens forking over hard-earned yen to regional utilities and keen to promote renewable energy, Miyama in Fukuoka Prefecture became one of the first municipalities to start its own electricity retailer amid the deregulation of the country's power market. Major cities like Kyoto, Yokohama and Sapporo — with a combined population of more than 7 million — are considering similar moves.
A fifth of Miyama's households now buy electricity from Miyama Smart Energy Co., which is majority owned by the local government and gets its electricity from renewable projects within its borders. The amount of electricity sold by Japan's small-scale operators, including municipalities, is expected to rise by nearly 70 percent by March 2021, according to researcher Fuji Keizai Group, as more participants jump into retailing after Prime Minister Shinzo Abe's government fully liberalized the market last year.