Liberalization of the Electricity Retail Market

What is ‘Electricity Retail Market’?

The electricity retailer sells the electric energy to peddle customers in the taxed areas, where the sale of electricity is open to trade competition. A peddle electric distributor buys electricity, delivery service, and all the related services at the wholesale rates; prices electricity for the customers and seeks their attention to buy electricity at peddle.

A peddle electricity market consists of a number of customers who can select their supplier from the competing electricity traders. This kind of consumer choice is known as 'energy choice'.

Full Liberalization of the Electricity Retail Market:

In the past few years, the electricity used in houses and markets was sold only by the monopolistic power company in each mentioned area, like the Tokyo Electric Power Company, Kansai Electric Power Company, etc. The families and traders were not able to choose the company. There was a supply area of each regional power companies.

From the start of April 2016, the full liberalization of new arrivals into the peddle electricity trade has permitted the families, stores, and all consumers to freely select from a variety of power companies and rate menus.

This meant that they were able to select the electricity trader and services independently, based on their lifestyles and value needs.

New entrants began to provide electricity using new ideas and strategies. Here, the new entrants refer to the new competitors who pose a challenge to the current players within an industry. Nowadays, there are multiple strategies to produce electricity and numerous peddles who provide it. Saving electricity is like saving energy; it is good for the economy and environment too. Saving of electricity is a long term strategy. Hence, the impact should be traced and examined for more than 50 years to fully observe the phenomenon.

Consumers’ Complaints about Opportunistic Sales Scheme:

In certain situations, some consumers complained about opportunistic sales schemes on electricity. For example, a salesperson claiming to be with a subsidiary of a power company induced a consumer to install a solar panel to reduce the electricity charges. There are a few rights to prevent this.

As an electricity customer, we have certain consumer rights regarding the supply, pricing, and resolving problems with electricity traders and distributors.

Entitled to have access to:

  • Necessary electricity supply on fair and reasonable terms and conditions
  • Adjustments and repayments or refund (for eligible customers)
  • Fair complaints processes

Consumers can make use of the energy made easy. It compares all the peddlers to help and select the right plan. Or simply put, it is a price comparator to research and evaluate the products and services offered by electricity retailers.

On December 17, 2015, the National Certified Addiction Counsellor (NCAC) provided information on consultation cases and advice for consumers in association with the start of full liberalization of the electricity market.

The NCAC of Japan, Consumer Affairs Centres beyond Japan, and other conference counters like the Electricity and Gas Market Surveillance Commission (EGC) in the Ministry of Economy, and Trade and Industry (METI) have been receiving nonstop requests from consumers for discussion regarding the supply of electricity or gas.

In particular, there have been a growing number of enquiries from consumers about the actions to be taken when they face the business closing of electricity or gas peddlers with whom they have signed a contract; and about problems concerning the switching of electricity or gas retailers, contacted by telephone or door-to-door visit by salespersons.

Preventing Consumer Troubles:

All electricity traders must provide similar and important information about their electricity offers in the same format. This is known an Energy Price Fact Sheet.

Every electricity retailer has to provide:

  • Any flexible payment options
  • At least 10 days’ notice of any price increases
  • A notice before 20 days of any discount or benefits, expire or change
  • Help to electricity customers in case of any problem to pay their bill
  • Prior notice about disconnection
  • Advanced notice about interruptions to supply

The consumption and supply of electric power are are not balanced over the transmission/distribution of networks as a whole; the power supply across the network thus becomes unstable. Therefore, if a new company in the retail sector is unable to purchase the amount of power that is required by the consumers that it is contracted with, the transmission sector operator must make up for the difference and ensure that the power is properly delivered to the consumers.