Tokyo Electric Power Co. may submit bids for three electricity retailing contracts in the Tohoku region, threatening to muscle in on Tohoku Electric Power Co.'s territory, industry sources said Wednesday.
If Tepco wins any of the contracts, it will become Japan's first electric utility to extend its power business outside of its area.
In March, bidding is planned for providing electricity to a wastewater treatment facility in Matsuo, Iwate Prefecture, and two community facilities run by Sendai.
The three facilities are currently receiving electricity from Tohoku Electric Power, which looks certain to offer a bid to remain the power supplier, the sources said.
Tepco plans to reduce its fees by around 5 percent starting in April, and believes the planned price reduction makes it competitive in bidding outside of its service area of Tokyo and eight neighboring prefectures, they said.
If it wins the contract, Tepco will generate the necessary electricity using its own power plants and send it to the Tohoku region via both its own power transmission lines and those of Tohoku Electric Power, they added. Tepco would have to pay about 3 yen per kwh for renting power cables.
Traditionally, the electric power retailing business in Japan has been regionally dominated by 10 electricity utilities.
But the government opened the way for nonutility firms to enter the market when it lifted regulations on power supply to large-lot users in March 2000. The government is poised to further liberalize it as part of deregulation efforts.