The Abe Cabinet on April 2 endorsed a plan to reform the nation's power industry and its market, including liberalizing electricity retail sales and removing power transmission and distribution functions from the country's 10 major power companies. Since the reforms won't be completed till as late as 2020, the government must act to prevent the major power companies and lawmakers representing their interests from weakening or even gutting the reform efforts.
As a first step, the government will submit a bill during this Diet session to establish by 2015 an organization for facilitating the supply of electricity from power companies to others during an emergency. Then, during the 2014 Diet session, it will submit a bill to completely liberalize the retail sale of electricity by 2016 and another bill, during the 2015 Diet session, to strip the major power firms of power transmission and distribution functions, which would take place between 2018 to 2020.
A new organization for the supply of electricity between power companies will be empowered to instruct power companies to send electricity to others when needed to overcome supply shortages. When the Fukushima nuclear disaster destabilized power supplies, it became difficult to send power from western Japan to eastern Japan because alternating current frequencies for the two regions are different — 60 Hz in western Japan versus 50 Hz in eastern Japan. To facilitate transmission between eastern and western Japan, it will be important to invest money to build frequency conversion facilities.
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