JAPAN Law and Practice Contributed by: Rintaro Hirano, Yutaro Fujimoto, Yurika Masakane and Yutaro Kato, Nagashima Ohno & Tsunematsu
Specified Electricity Transmission and Distribution Business Licence Holders The transmission and distribution networks of Specified Electricity Transmission and Distribu- tion Businesses have been constructed to serve consumers within a limited geographical area. As such, these networks are more akin to dis- tribution networks than transmission networks in respect of length and capacity. As the impact that such networks may have on the transmis- sion and distribution networks of General Elec- tricity Transmission and Distribution Businesses is insignificant, Specified Electricity Transmission and Distribution Businesses can be conducted merely with notification to METI of certain basic facts regarding the services to be provided, such as geographical area of service, layout of trans- mission and distribution lines, and the specifica- tions thereof. Electricity Distribution Business Licence Holders As described in 1.1 Law Governing the Struc- ture and Ownership of the Power Industry , while General Electricity Transmission and Dis- tribution Business covers electricity distribution business in Japan, the 2022 Amendment allows a TSO to transfer or lease a part of its facilities in its service area to a DSO. The purpose of this new regulation is to enhance the efficiency of the power system, disperse power sources in some regions and improve power supply resil- ience. Local electricity companies, infrastruc- ture companies and IT companies are expected to be DSOs. The regulations applicable to an Electricity Distribution Business are much the same as those applicable to a General Electric- ity Transmission and Distribution Business, since an Electricity Distribution Business is, in effect, an offshoot of a General Electricity Transmission and Distribution Business. The operation of an
Electricity Distribution Business requires the approval of METI. 4.3 Terms and Conditions Imposed on Approvals to Construct and Operate a Transmission Line and Associated Facilities A TSO is obliged to do the following pursuant to the Electricity Business Act and its delegated legislation: • offer access to the transmission and distribu- tion networks located within its service area, and apply the terms and conditions (approved by METI) to all electricity business operators equally; • provide last-resort services; • provide electricity retail services on isolated islands within its service area; • not allow its directors to assume an office in its parent holding company or any of its affili- ates that operate an Electricity Retail Busi- ness or an Electricity Generation Business (such parent holding company and affiliates being “interested parties”); • not to trade with interested parties except where permitted under the delegated legisla- tion; • not to use proprietary information of elec- tricity business operators or consumers for purposes other than its transmission and distribution business; • not to engage in discriminatory treatment; • install appropriate information protection; • endeavour to maintain the voltage and fre- quency of the electricity in its service area at the prescribed level; • measure and record the voltage and frequen- cy of the electricity in its service area; • submit its financial statements to METI;
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