Reuters Tokyo Mayor Nobuto Hosaka had more than saving taxpayers' money on his mind when he recently invited bids from rivals of giant utility Tokyo Electric Power Co. to supply power to his ward in Japan's capital. Hosaka, like other advocates of reform, hopes altered public sentiment after the nation suffered the world's worst nuclear crisis in a 25 years will spur reforms of an electricity oligopoly dominated for decades by regional utility fiefdoms. “Doing this will reduce our electricity costs,” said Hosaka, a former lawmaker from a tiny left-leaning party who now runs a area of Tokyo that is home to some 800,000 people. “But the reason this attracted so much attention was that until now, the voices of ordinary users — the people, residents of the ward, businesses — have not been heard,” he told Reuters. “By showing that choice (of supplier) is possible and demanding competition, this will give impetus to a more open electricity market.” Hosaka and other reform advocates, however, fear the utilities still hold enough sway to hamper change, despite weakened political clout after the disaster at Tepco's tsunami-ravaged Fukushima plant. “From the people's perspective, the power of a few is still very great and this is obstructing reform,” Hosaka said. Debate on utility reform will formally kick off at an expert panel on Thursday, one key strand of a potentially sweeping remake of Japan's energy policy intended to reduce the role of nuclear power, promote renewables, spur energy conservation and address the problem of greenhouse gas emissions. Reformers are betting that tattered public trust in Japan's utilities will give impetus to changes they argue are needed to give users more choice, bring down electricity costs that disadvantage Japanese firms globally, and promote clean, renewable sources of energy such as solar power. “Because we must increase renewable energy and thoroughly promote energy conservation to reduce reliance on nuclear power and solve the problem of CO2 emissions, we must create an electricity system that promotes renewables and conservation. That means a decentralised energy system,” said Satoshi Kusakabe, a former trade and industry ministry official now advising the government on energy policies. “The question is not whether or not to liberalise, but how to liberalize the electricity system,” he told Reuters. “The debate from now on will be over the speed and scope of liberalisation.” Hosaka's Tokyo ward will take advantage of a system introduced in stages starting a dozen years ago to open the market for large-scale electricity users such as factories and offices. But those reforms were mostly gutted by politically powerful utilities keen to keep a stranglehold on the market, many experts say. Competitors to the 10 regional utilities account for less than 4 percent of the 60 percent of Japan's electricity market that has been deregulated. Utilities, Tepco foremost among them, have long had cozy ties with politicians and bureaucrats and also wield hefty influence within Japan's powerful business lobby, Keidanren. “They created a system that imposes a huge handicap on participants with a small number of customers and limited power generation capacity,” said Toshihiro Matsumura, a University of Tokyo professor and member of the expert advisory panel on reform. “So there is almost no competition.” Utilities and their political and bureaucratic allies have long argued Japan's system of regional monopolies that own both power plants and transmission grids ensured vital stability in the electricity supply. __
