JAPAN Law and Practice Contributed by: Rintaro Hirano, Yutaro Fujimoto, Yurika Masakane and Yutaro Kato, Nagashima Ohno & Tsunematsu
Electricity Generation Business (Hatsuden Jigyo) This business generates and sells electricity to retail sellers and TSOs. Specified Electricity Wholesale Business (Tokutei Oroshikyokyu Jigyo) This is the aggregation business of small power sources, including residential rooftop solar and batteries. Specified Electricity Wholesale Busi- ness operators sell such aggregated power wholesale to electricity retail business operators, etc (also referred to as an “Electricity Aggrega- tion Business”). The Electricity Business Act has regulated this business since 1 April 2022, as it has much in common with the Electricity Gen- eration Business, in that aggregated power is also an important power source for the national power system. General Electricity Transmission and Distribution Business (Ippan Sohaiden Jigyo) This operates and maintains an electricity trans- mission and distribution network. A General Electricity Transmission and Distribution Busi- ness corresponds to the electricity transmis- sion and distribution segment of the business that each of the major utilities (including their wholly owned subsidiaries) has conducted and continues to conduct since its inception under the regional monopoly regime. General Elec- tricity Transmission and Distribution Business operators (ie, TSOs) are also required to pro- vide ancillary services such as supply-demand adjustment and frequency control in their region. Electricity Distribution Business (Haiden Jigyo) This has also been a regulated business since 1 April 2022. It handles the operation and mainte- nance of a certain portion of the electricity dis- tribution network in the service area of a TSO.
While the General Electricity Transmission and Distribution Business covers the electricity dis- tribution business in Japan, the Electricity Busi- ness Act allows a TSO to transfer or lease a part of its facilities in its service area to an Electricity Distribution Business operator (ie, a distribution system operator or DSO). DSOs are also required to provide ancillary services in their area. Electricity Transmission Business (Soden Jigyo) This business transmits electricity to a TSO through transmission lines that the Electricity Transmission Business operator operates and maintains on its own. Unlike a TSO and a DSO, an Electricity Transmission Business operator is not responsible for providing ancillary services as provided by TSOs and DSOs. Specified Electricity Transmission and Distribution Business (Tokutei Sohaiden Jigyo) The Specified Electricity Transmission and Dis- tribution Business operator is allowed to sell electricity on its own network to consumers within a certain limited geographical area. Electricity Retail Business (Kouri Denki Jigyo) This business sells electricity to consumers. 1.2 Principal State-Owned or Investor- Owned Entities All the major utilities are investor-owned compa- nies with one exception: Tokyo Electric Power Company Holdings. More than 50% of this major utility’s shares are held by the Nuclear Damage Compensation and Decommissioning Facilita- tion Corporation – a quasi-government institu- tion that receives half of its capital from the gov- ernment and which was established in response to the Fukushima nuclear incident in 2011. All the major utilities are listed on a stock exchange
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