More so-called new power providers, which entered the electricity retail market after it was liberalized in 2000, are withdrawing from or downsizing their business — unable to withstand the recent sharp rise in fuel prices.
Some municipalities that have contracts with such providers have seen their electricity supplies halted, so have had to look for other suppliers, and there have been cases in which even major utility companies like Chubu Electric Power Co. have refused to sign new contracts with high-energy-use clients.
Experts say the situation is taking a toll on local governments, operated using taxpayers’ money, and is unexpected, highlighting the need to reform the system again.