Protesting transmission costs in Japan

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New power retailers to the partly deregulated electricity market in Japan -- which is now open to large industrial users -- have protested against the high cost of transmission in the country. Tokyo Gas Co, Mitsubishi Corp and the American power giant Enron Corp have, via the US government, formally complained to the Ministry of International Trade and Industry (MITI) that line fees set by the Japanese utility companies are too high compared to those in the US. New independent electricity retailers cannot compete on the market, they say. Big Japanese users have also voiced unease about the high cost of electricity, which is 20-30% higher than that in the US and Europe. MITI has responded that guidelines already state that the transmission fee must reflect cost reductions achieved through future cost cutting measures, rather than those already in action. However, it adds, power companies have the right to decide how to reflect these reductions in transmission charges. According to the federation of electric power companies in Japan, utilities cannot ensure a stable supply if they have to cater to a big number of outside users. MITI has indicated that it will review the deregulation framework before 2003.

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