Japanese government panel to urge competition in retail power sales
Posted: 1:00am on May 19, 2012; Modified: 4:31pm on May 19, 2012
A government advisory panel in Japan has agreed to recommend
that retail sales of electricity to households be totally liberalized,
sources said.
The Economy, Trade and Industry Ministry panel of experts on reforms of electrical power systems, chaired by Professor Motoshige Itoh of the University of Tokyo, said Friday the electricity retail business, including supply to households, should be completely opened up to competition.
The panel also said the current method used by electric power companies to decide charges should be abolished to introduce competition to the industry. Currently, utility charges are calculated by totaling such costs as labor and fuel and adding a percentage as a profit margin.
The panel also is expected to call for accelerating other steps to liberalize the electricity business, such as separating power generation and distribution of electricity by regional electric power companies, to prevent utilities from having monopolies in their service areas and keeping electricity rates at high levels even after liberalization.
If the reforms are realized, households will have more choices in selecting electricity suppliers, which is expected to result in lower electricity bills.
The liberalization plan for household-use electricity will be included in a new basic energy plan the government plans to compile this summer.
As the electric power industry is expected to accept the plan, the government plans to submit a bill to revise the Electricity Business Law as early as spring next year.
After a period during which the public will be notified of the changes, the new scheme will go into effect as early as around 2015, the sources said.
If the electricity retail business is totally liberalized, consumers will be able to freely choose suppliers from among not only current regional electric power companies but also power producer and supplier firms, which may provide electricity at lower prices, and retail firms specializing in renewable energy resources.
If the current pricing method is abolished, the system that requires the ministry to approve power companies' applications before raising electricity charges will also be scrapped. As a result, power producers and suppliers will be able to freely set power rates.
The ministry on Friday presented to the panel a reform plan for the electricity industry, proposing the creation of a wide-area power distribution network that will enable utilities to supply electricity to each other, and establishment of a new nationwide organization to manage the network.
The ministry has begun negotiations with the electric power industry and other parties concerned to realize the plans.
The industry had opposed such liberalization for many years, but it apparently changed its policy due to the government's hard-line stance.
This spring, the government reviewed the utilities' current billing methods and decided to set upper limits on labor costs that can be reflected in electricity charges.
Electric power companies apparently concluded it would be to their advantage to accept the billing limits because they will make them more competitive when newcomers enter the market under liberalization, according to observers.
The ministry will separately consider measures to ensure electricity supply to remote islands and rural areas where depopulation is under way.
Liberalization of electricity retail businesses has been gradually implemented since 2000.
But even today, households and small stores, whose power consumption accounts for about 40 percent of total electricity use, can buy power only from regional electric power companies in their respective areas.
Earlier this year, Tokyo Electric Power Co. decided to drastically raise electricity rates.
Because ordinary households have no choice but to buy electricity from Tepco despite the hike, there has been mounting criticism among the public toward the current system, rapidly boosting public support for liberalization.
The Economy, Trade and Industry Ministry panel of experts on reforms of electrical power systems, chaired by Professor Motoshige Itoh of the University of Tokyo, said Friday the electricity retail business, including supply to households, should be completely opened up to competition.
The panel also said the current method used by electric power companies to decide charges should be abolished to introduce competition to the industry. Currently, utility charges are calculated by totaling such costs as labor and fuel and adding a percentage as a profit margin.
The panel also is expected to call for accelerating other steps to liberalize the electricity business, such as separating power generation and distribution of electricity by regional electric power companies, to prevent utilities from having monopolies in their service areas and keeping electricity rates at high levels even after liberalization.
If the reforms are realized, households will have more choices in selecting electricity suppliers, which is expected to result in lower electricity bills.
The liberalization plan for household-use electricity will be included in a new basic energy plan the government plans to compile this summer.
As the electric power industry is expected to accept the plan, the government plans to submit a bill to revise the Electricity Business Law as early as spring next year.
After a period during which the public will be notified of the changes, the new scheme will go into effect as early as around 2015, the sources said.
If the electricity retail business is totally liberalized, consumers will be able to freely choose suppliers from among not only current regional electric power companies but also power producer and supplier firms, which may provide electricity at lower prices, and retail firms specializing in renewable energy resources.
If the current pricing method is abolished, the system that requires the ministry to approve power companies' applications before raising electricity charges will also be scrapped. As a result, power producers and suppliers will be able to freely set power rates.
The ministry on Friday presented to the panel a reform plan for the electricity industry, proposing the creation of a wide-area power distribution network that will enable utilities to supply electricity to each other, and establishment of a new nationwide organization to manage the network.
The ministry has begun negotiations with the electric power industry and other parties concerned to realize the plans.
The industry had opposed such liberalization for many years, but it apparently changed its policy due to the government's hard-line stance.
This spring, the government reviewed the utilities' current billing methods and decided to set upper limits on labor costs that can be reflected in electricity charges.
Electric power companies apparently concluded it would be to their advantage to accept the billing limits because they will make them more competitive when newcomers enter the market under liberalization, according to observers.
The ministry will separately consider measures to ensure electricity supply to remote islands and rural areas where depopulation is under way.
Liberalization of electricity retail businesses has been gradually implemented since 2000.
But even today, households and small stores, whose power consumption accounts for about 40 percent of total electricity use, can buy power only from regional electric power companies in their respective areas.
Earlier this year, Tokyo Electric Power Co. decided to drastically raise electricity rates.
Because ordinary households have no choice but to buy electricity from Tepco despite the hike, there has been mounting criticism among the public toward the current system, rapidly boosting public support for liberalization.
Tepco Was Short-Circuited From the Start
Wall Street Journal
Investors still backing the Japanese utility must surely be looking to pull the plug. The latest round of funding, announced this week, entails $12 billion in government support as well as $13 billion in new loans. In return for its backing, ...
Doomsday scenarios spread about No. 4 reactor at Fukushima plant
When Ron Wyden, a Democratic senator from the U.S.
state of Oregon, visited the Fukushima No. 1 nuclear power plant on
April 6, he spent about an hour looking at a building constructed under
strict anti-quake standards and observed the facility that processes
water contaminated by radiation.
Although he was driven by car past the reactor buildings, he did not actually enter any of the reactor buildings, according to officials of Tokyo Electric Power Co. (TEPCO), the operator of the plant.
But after his return to the United States, Wyden, who sits on the Senate Committee on Energy and Natural Resources, fueled concerns of possible catastrophic events at the No. 4 reactor of the Fukushima plant, specifically what would happen if a huge quake damaged the spent fuel rod pool there.
TEPCO has issued statements reassuring the public that such a disaster would not occur, saying the structure has been reinforced to withstand serious shaking.
But these days, even politicians may seem more reliable than TEPCO about information concerning nuclear safety.
Wyden sent a letter dated April 16 to Ichiro Fujisaki, Japan's ambassador to the United States, that said the storage pool holding spent nuclear fuel at the No. 4 reactor could collapse if the reactor building was hit by another major earthquake or tsunami. The senator also warned that emissions of radioactive materials in such an event would be much greater than after last year's accident.
The letter also said that work should be accelerated to remove the nuclear fuel from the pool and stated that the United States was prepared to provide all forms of support for such efforts.
Copies of the letter were sent to U.S. Secretary of State Hillary Clinton and Gregory Jaczko, chairman of the U.S. Nuclear Regulatory Commission (NRC).
In its April 17 edition, the Wall Street Journal ran a story that included Wyden’s claim that there was a serious and unresolved understatement of the earthquake risk at the Fukushima No. 1 nuclear plant.
The Huffington Post carried a report that included an analysis by an expert who said that if radiation spewed from nuclear fuel in the No. 4 reactor pool because of insufficient cooling, the total amount of cesium-137 emitted would be at least 10 times the amount released during the Chernobyl disaster.
The Washington Post also ran an article about the dangers of the No. 4 reactor.
Alarms about the No. 4 reactor were also being raised in Japan.
Mitsuhei Murata, 74, a professor emeritus at Tokaigakuen University who once served as Japan's ambassador to Switzerland, said, "The existence of the No. 4 reactor has become a major national security issue for the entire world that does not take a back seat even to North Korea's missile issue."
He had called for a halt to operations at the Hamaoka nuclear power plant even before the Great East Japan Earthquake struck last year, leading to the nuclear crisis.
"If an accident should occur at the No. 4 reactor, it could be called the start of the ultimate catastrophe for the world," Murata said as a witness at an Upper House Budget Committee hearing in March.
According to Murata, his comments at the hearing were translated into English and posted on a blog by Akio Matsumura, who once worked at the United Nations. The post was accessed by individuals from 160 nations.
Compared with the No. 1 to No. 3 reactors at the Fukushima No. 1 nuclear plant, which all experienced meltdowns, the No. 4 reactor was not seriously damaged by the March 11, 2011, quake and tsunami because it was undergoing a periodic inspection at the time.
However, the No. 4 reactor building houses a storage pool containing 1,535 spent fuel rods, the largest number of any of the reactors.
An explosion and fire at the No. 4 reactor blew away the walls and roof of the steel-reinforced concrete building, so the reactor building was hit by major structural damage.
Moreover, the storage pool is still not covered and remains exposed to the atmosphere. That situation has raised serious questions about what would happen if another quake with an intensity of 7 struck the Fukushima No. 1 nuclear plant.
Murata has his own predictions.
"If the storage pool should collapse and the 1,535 fuel rods began burning in the atmosphere, an endless amount of radiation would be emitted. Of course, that would mean that Tokyo would become unlivable," he said.
Murata continued: "Just 50 meters from the No. 4 reactor is the common pool for the No. 1 to No. 6 reactors. The common pool holds 6,375 spent nuclear fuel rods. If a fire should occur at the No. 4 reactor pool, the common pool would also not stand a chance."
That is the potential crisis at the No. 4 reactor that is causing so much fear around the world.
In fact, immediately after last year's accident, the biggest concern raised by the United States was the storage pool at the No. 4 reactor.
A major factor behind the NRC's decision to issue an evacuation recommendation for U.S. citizens within an 80-kilometer radius of the Fukushima No. 1 nuclear plant, much wider than the one set by the Japanese government, was because of information obtained that the storage pool at the No. 4 reactor was empty of cooling water.
That information later proved false. And cooling of the storage pool has now been maintained.
But Arnie Gundersen, a U.S. nuclear engineer who visited Japan in February, has raised other concerns.
In an interview with Shukan Asahi at that time, Gundersen said the nuclear fuel pool at the No. 4 reactor still has the power to physically split the Japanese archipelago.
He said the spent nuclear fuel in the No. 4 reactor pool is equivalent to several reactor cores and contains radiation equal to the amount released in the atmosphere by all past nuclear experiments.
Gundersen has also written that the No. 4 reactor building's structure has weakened, the building is tilted, and that he has advised friends in Tokyo to immediately evacuate should the No. 4 reactor collapse.
TEPCO on April 26 issued a press release that disputed Gundersen’s claims.
"The No. 4 reactor building is not tilted and it, including the storage pool, will not be destroyed by a quake," it said.
According to the release, measurements were taken to confirm that the floor where the storage pool is located is parallel to the water surface of the pool.
TEPCO officials also explained that the steel support at the base of the pool and concrete wall had been reinforced by last July, which has increased by 20 percent the leeway against a possible quake.
In addition, the utility conducted a simulation exercise using analytical models that showed that even if a lower-6 intensity quake were to strike the plant again, it would not collapse.
TEPCO has also begun work to cover the entire No. 4 reactor building in order to start removing the spent nuclear fuel from the storage pool. Work to remove the fuel rods could begin as soon as next year.
However, one problem is that TEPCO’s information is now generally greeted with doubts.
"The trust in the central government and TEPCO which allowed the accident to happen has fallen around the world,” Murata said. “There is no nation that wholeheartedly believes those releases."
In the United States, plans have been devised to set up a neutral and independent evaluation committee consisting of experts from around the world to look into the situation at the Fukushima No. 1 nuclear plant and consider ways to resolve the problems there. Such moves show that many feel TEPCO and the Japanese government can no longer be depended upon to deal with the accident.
"Since TEPCO is, after all, a for-profit company, it cannot be said to be making every possible effort,” Murata said. “There is no time to waste. Knowledge from around the world should be gathered as soon as possible to begin the work of removing the nuclear fuel from the storage pool."
Murata has sent a letter to Prime Minister Yoshihiko Noda asking that action be taken, but so far nothing specific has been done.
Although he was driven by car past the reactor buildings, he did not actually enter any of the reactor buildings, according to officials of Tokyo Electric Power Co. (TEPCO), the operator of the plant.
But after his return to the United States, Wyden, who sits on the Senate Committee on Energy and Natural Resources, fueled concerns of possible catastrophic events at the No. 4 reactor of the Fukushima plant, specifically what would happen if a huge quake damaged the spent fuel rod pool there.
TEPCO has issued statements reassuring the public that such a disaster would not occur, saying the structure has been reinforced to withstand serious shaking.
But these days, even politicians may seem more reliable than TEPCO about information concerning nuclear safety.
Wyden sent a letter dated April 16 to Ichiro Fujisaki, Japan's ambassador to the United States, that said the storage pool holding spent nuclear fuel at the No. 4 reactor could collapse if the reactor building was hit by another major earthquake or tsunami. The senator also warned that emissions of radioactive materials in such an event would be much greater than after last year's accident.
The letter also said that work should be accelerated to remove the nuclear fuel from the pool and stated that the United States was prepared to provide all forms of support for such efforts.
Copies of the letter were sent to U.S. Secretary of State Hillary Clinton and Gregory Jaczko, chairman of the U.S. Nuclear Regulatory Commission (NRC).
In its April 17 edition, the Wall Street Journal ran a story that included Wyden’s claim that there was a serious and unresolved understatement of the earthquake risk at the Fukushima No. 1 nuclear plant.
The Huffington Post carried a report that included an analysis by an expert who said that if radiation spewed from nuclear fuel in the No. 4 reactor pool because of insufficient cooling, the total amount of cesium-137 emitted would be at least 10 times the amount released during the Chernobyl disaster.
The Washington Post also ran an article about the dangers of the No. 4 reactor.
Alarms about the No. 4 reactor were also being raised in Japan.
Mitsuhei Murata, 74, a professor emeritus at Tokaigakuen University who once served as Japan's ambassador to Switzerland, said, "The existence of the No. 4 reactor has become a major national security issue for the entire world that does not take a back seat even to North Korea's missile issue."
He had called for a halt to operations at the Hamaoka nuclear power plant even before the Great East Japan Earthquake struck last year, leading to the nuclear crisis.
"If an accident should occur at the No. 4 reactor, it could be called the start of the ultimate catastrophe for the world," Murata said as a witness at an Upper House Budget Committee hearing in March.
According to Murata, his comments at the hearing were translated into English and posted on a blog by Akio Matsumura, who once worked at the United Nations. The post was accessed by individuals from 160 nations.
Compared with the No. 1 to No. 3 reactors at the Fukushima No. 1 nuclear plant, which all experienced meltdowns, the No. 4 reactor was not seriously damaged by the March 11, 2011, quake and tsunami because it was undergoing a periodic inspection at the time.
However, the No. 4 reactor building houses a storage pool containing 1,535 spent fuel rods, the largest number of any of the reactors.
An explosion and fire at the No. 4 reactor blew away the walls and roof of the steel-reinforced concrete building, so the reactor building was hit by major structural damage.
Moreover, the storage pool is still not covered and remains exposed to the atmosphere. That situation has raised serious questions about what would happen if another quake with an intensity of 7 struck the Fukushima No. 1 nuclear plant.
Murata has his own predictions.
"If the storage pool should collapse and the 1,535 fuel rods began burning in the atmosphere, an endless amount of radiation would be emitted. Of course, that would mean that Tokyo would become unlivable," he said.
Murata continued: "Just 50 meters from the No. 4 reactor is the common pool for the No. 1 to No. 6 reactors. The common pool holds 6,375 spent nuclear fuel rods. If a fire should occur at the No. 4 reactor pool, the common pool would also not stand a chance."
That is the potential crisis at the No. 4 reactor that is causing so much fear around the world.
In fact, immediately after last year's accident, the biggest concern raised by the United States was the storage pool at the No. 4 reactor.
A major factor behind the NRC's decision to issue an evacuation recommendation for U.S. citizens within an 80-kilometer radius of the Fukushima No. 1 nuclear plant, much wider than the one set by the Japanese government, was because of information obtained that the storage pool at the No. 4 reactor was empty of cooling water.
That information later proved false. And cooling of the storage pool has now been maintained.
But Arnie Gundersen, a U.S. nuclear engineer who visited Japan in February, has raised other concerns.
In an interview with Shukan Asahi at that time, Gundersen said the nuclear fuel pool at the No. 4 reactor still has the power to physically split the Japanese archipelago.
He said the spent nuclear fuel in the No. 4 reactor pool is equivalent to several reactor cores and contains radiation equal to the amount released in the atmosphere by all past nuclear experiments.
Gundersen has also written that the No. 4 reactor building's structure has weakened, the building is tilted, and that he has advised friends in Tokyo to immediately evacuate should the No. 4 reactor collapse.
TEPCO on April 26 issued a press release that disputed Gundersen’s claims.
"The No. 4 reactor building is not tilted and it, including the storage pool, will not be destroyed by a quake," it said.
According to the release, measurements were taken to confirm that the floor where the storage pool is located is parallel to the water surface of the pool.
TEPCO officials also explained that the steel support at the base of the pool and concrete wall had been reinforced by last July, which has increased by 20 percent the leeway against a possible quake.
In addition, the utility conducted a simulation exercise using analytical models that showed that even if a lower-6 intensity quake were to strike the plant again, it would not collapse.
TEPCO has also begun work to cover the entire No. 4 reactor building in order to start removing the spent nuclear fuel from the storage pool. Work to remove the fuel rods could begin as soon as next year.
However, one problem is that TEPCO’s information is now generally greeted with doubts.
"The trust in the central government and TEPCO which allowed the accident to happen has fallen around the world,” Murata said. “There is no nation that wholeheartedly believes those releases."
In the United States, plans have been devised to set up a neutral and independent evaluation committee consisting of experts from around the world to look into the situation at the Fukushima No. 1 nuclear plant and consider ways to resolve the problems there. Such moves show that many feel TEPCO and the Japanese government can no longer be depended upon to deal with the accident.
"Since TEPCO is, after all, a for-profit company, it cannot be said to be making every possible effort,” Murata said. “There is no time to waste. Knowledge from around the world should be gathered as soon as possible to begin the work of removing the nuclear fuel from the storage pool."
Murata has sent a letter to Prime Minister Yoshihiko Noda asking that action be taken, but so far nothing specific has been done.
Nissan profit soars on record sales despite tsunami disaster in Japan
Washington Post
s January-March profit more than doubled to 75.3 billion yen ($941 million) as the Japanese automaker achieved record sales despite production disruptions from last year's tsunami. Nissan annual global sales reached a record 4.85 million vehicles, ...
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