JAPAN Law and Practice Contributed by: Rintaro Hirano, Yutaro Fujimoto, Yurika Masakane and Yutaro Kato, Nagashima Ohno & Tsunematsu
• submit its segmented financial statements regarding its transmission and distribution services to METI; • submit a report to METI concerning the occurrence of any imbalance in its transmis- sion and distribution network; • join OCCTO; • prepare and submit a supply plan to OCCTO; and • comply with the Network Codes of OCCTO. 4.4 Eminent Domain, Condemnation and Expropriation Rights to Construct and Operate Transmission Lines and Associated Facilities See 3.4 Eminent Domain, Condemnation and Expropriation Rights to Construct and Operate Generation Facilities . 4.5 Monopoly Rights to Provide Transmission Services Each TSO is assigned a regional service area and is granted de facto exclusivity within such service area by METI since METI does not grant two General Electricity Transmission and Dis- tribution Business licences in relation to any service area. Electricity Transmission Business licences, Specified Electricity Transmission and Distribution Business licences and Electricity Distribution Business licences are exceptions to these monopoly arrangements as described in 4.2 Obtaining Approvals to Construct and Operate Transmission Lines and Associated Facilities . 4.6 Transmission Charges and Terms of Service Pursuant to the Electricity Business Act, the terms and conditions of transmission and distri- bution services need to be approved by METI. The matters to be described in the terms and conditions and the methodology to compute the
service charge rates are set out in the regulations listed below: • executive rules of the Electricity Business Act ( denkijigyoho shikokisoku ); • rules on the methodology to compute tariffs for transmission and distribution services ( ippan sohaiden jigyo takusokyokyuto yakkan ryokin santei kisoku ); and • rules on the methodology to balance income and loss from transmission and distribution services ( denkijigyo takusokyokyuto shushi- keisan kisoku ). The terms and conditions of transmission and distribution services are first proposed by the TSO and then fixed upon the approval of METI based on the advice of EGC. METI reviews the proposed terms and con- ditions to check if they satisfy the following requirements: • the tariff rate is computed and determined with the assumption that the operator’s actual revenue will not exceed its projected revenue approved by METI; • the terms and conditions do not significantly undermine accessibility to the transmission and distribution services; • the method of computing the tariff rate is appropriately and clearly stated in the terms and conditions; • the allocation of responsibility as well as cost-sharing between the TSO and users of the transmission and distribution network is appropriately and clearly stated in the terms and conditions; • the terms and conditions do not discriminate against any specific person; and • the terms and conditions do not hinder the public interest.
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