Contributed By Nagashima Ohno & Tsunematsu
The ministry responsible for energy policy is METI, and the Agency for Natural Resources and Energy (ANRE), an institution under METI, is in charge of proposing an energy policy and implementing the energy policy adopted by the government. In particular, ANRE is given an independent authority to promulgate rules to implement the energy policy of the government. As such, except for safety regulations, most of the regulatory matters of the electricity industry are delegated to ANRE.
As a part of the structural reform of the electricity industry since 2013, the Organisation for Cross-regional Co-ordination of Transmission Operators (OCCTO) was established in 2015. OCCTO is not a State-owned organisation and all licensed operators of electricity business are required to join OCCTO, which has the power to give directions to operators in order to achieve its missions.
The essential mission of OCCTO is to co-ordinate the transmission networks in the country in accordance with the Network Codes (which is approved by METI), so that those transmission networks may function as an integrated network and be operated, maintained and developed in a consistent manner. The Network Codes are OCCTO’s executive rules on how OCCTO executes its network operations (including the procedure required by a network user in relation to accessing the transmission and distribution networks). All electricity business operators, as members of OCCTO, are required to operate their business in accordance with the Network Codes.
Before, the demand and supply of electricity was monitored at a transmission network level by each of the Major Utilities that had been granted exclusivity as sole licensed operator in a certain geographical area. The Electricity Power System Council of Japan (ESCJ) was established in 2004 to support co-ordination between Major Utilities from 2005. OCCTO was established to strengthen the control of the demand and supply of electricity nationwide as a successor of ESCJ. OCCTO is expected to enhance efficiency in the use of the transmission networks by way of monitoring the demand and supply of electricity at a country level and giving directions to operators.
The Electricity and Gas Market Surveillance Commission (EGC) was established on 1 September 2015, half a year before the electricity retail market was fully liberalised on 1 April 2016 (the gas retail business was liberalised one year later, on 1 April 2017). EGC’s primary missions are to monitor the energy market and propose better regulations to promote competition (based on the information it acquires through monitoring activities and the analysis thereof).
In order to achieve its missions, EGC, as a council to METI, has the power to issue a warning to operators of electricity business and to propose solutions to METI. As an exercise of that power, EGC detects improper trades through daily market surveillance; examines and reviews the rate of transmission and distribution tariffs, and regulated retail tariffs set by Major Utilities; and proposes regulations that it thinks are appropriate in order to promote competition or protect consumers.
https://www.occto.or.jp/en/about_occto/articles/files/Network_Codes_1810.pdf (amendments of 2019 are not reflected)