News On Japan

Major Power Companies Prohibited from Reselling to 'New Power' Providers Amid Antitrust Concerns

Protecting the Power Market: Restrictions on Resale to Prevent Monopolies

TOKYO, Jan 18 (News On Japan) - A government report on the transactions between major power companies engaged in power generation and the so-called "new power" companies that procure and sell electricity to consumers has been published.

It points out that there may be violations of antitrust laws, as some major power companies impose conditions such as prohibiting resale. Since the liberalization of electricity, numerous "new power" companies, many of which do not own power generation facilities, have emerged, procuring and selling electricity to consumers.

However, it has been pointed out that these companies are at a competitive disadvantage compared to major power companies that handle both generation and retail. The Fair Trade Commission has been investigating the actual situation.

According to the report published on the 17th, "new power" companies procure approximately 50% of the necessary electricity through bilateral transactions with major power companies, indicating that transactions with these major companies are crucial. Furthermore, the report points out that some contracts for bilateral transactions between the two parties include conditions such as prohibiting the resale of procured electricity to other companies or restricting the areas where electricity can be sold to consumers. Such contractual terms may violate antitrust laws.

Major power companies have indicated that they plan to lift or relax these contractual conditions from the next fiscal year onwards. The Fair Trade Commission has stated, "We want to continue to monitor transactions in the wholesale electricity market in cooperation with agencies such as the Agency for Natural Resources and Energy."

Source: NHK

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