JAPAN Law and Practice Contributed by: Yutaro Fujimoto, Yurika Masakane, Hirokazu Tanaka and Yutaro Kato, Nagashima Ohno & Tsunematsu
2.5 Surveillance to Detect Anti-Competitive Behaviour Under the Electricity Business Act, EGC has responsi- bility for market surveillance to secure the soundness and fairness of the electricity market. If any anti-com- petitive behaviour by an electricity business opera- tor is detected, EGC may give a warning to such an operator and advise the Minister of Economy, Trade and Industry to issue an order to the electricity busi- ness operator to improve its business. In addition, under the Act on Prohibition of Private Monopolisation and Maintenance of Fair Trade, the JFTC oversees the power industry. If any anti-compet- itive behaviour is detected, the JFTC has the power to issue an order to any person engaging in anti-com- petitive practices to take specific actions to eradicate such practice. On 30 March 2023, the JFTC issued cease and desist orders and Administrative Monetary Penalty Payment Orders to some of the major utilities due to cartel behaviour (some of these orders are being contested at the time of writing). The JFTC determined that these major utilities agreed with each other in the autumn of 2018 at the latest to restrict sales to consumers located in areas where the other major utilities had previously monopolised the power supply before the liberalisation of the electricity retail market. The total amount of the Administrative Monetary Penalty Payment Orders exceeds JPY100 billion, the highest amount ever ordered by the JFTC. METI also issued Business Improvement Orders, which included orders to some major utilities suspected of engaging in car- tel behaviour, to implement measures preventing anti- competitive behaviour. In addition, METI instructed all the major utilities to implement measures to establish fair power trading relationships. 3. Generation Facilities 3.1 Constructing and Operating Generation Facilities The principal laws governing the construction and operation of electricity generation are the: • Electricity Business Act;
• Environmental Impact Assessment Act (Act No 81 of 1997, as amended) (the “EIA Act”); • Rationalisation Act; • Act on the Regulation of Nuclear Source Material, Nuclear Fuel Material and Reactors; and • Renewable Energy Special Measures Act. 3.2 Obtaining Approvals to Construct and Operate Generation Facilities Electricity Business Act Unless the electricity capacity is below 10 MW, any person who intends to generate electricity for sale must first submit an application to OCCTO for mem- bership. Next, under the Electricity Business Act, that person must submit to METI a notification form containing certain prescribed information such as the location of the generation facility and its power source. Operators are also generally required to file a con- struction plan of the generation facility with METI no less than 30 days prior to commencing construction if the intended electricity production capacity of the facility is over a prescribed level or the intended facility meets certain specifications. The generation facility must also pass a pre-use inspection conducted by METI before being used for commercial operation. EIA Act The operator must perform an environmental impact assessment in accordance with the EIA Act whenever the operator intends to construct a generation facility that falls within a prescribed category. Preparation of the environmental impact statement requires the fol- lowing steps. (Some regional governments also have their own additional EIA process for the construction of certain prescribed generation facilities.) Consideration statement The operator prepares a statement on the environ- mental impact that the operator expects the construc- tion to have and submits it to METI for review. The operator publishes it and is expected (but not obliged) to seek feedback from the public.
178 CHAMBERS.COM
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