Regulatory Reform of Public Utilities

Regulatory Reform of Public Utilities

The Japanese Experience

Fumitoshi Mizutani

Covering issues such as deregulation, privatization, organizational reforms, and competition policy, Regulatory Reform of Public Utilities provides a comprehensive summary of regulatory reforms in Japanese public utility industries.

Chapter 4: Gas Utility

Fumitoshi Mizutani

Subjects: economics and finance, public sector economics


The main purpose of this chapter is to overview the industrial structure and regulatory scheme of the gas utility industry. In terms of its general regulatory frame, the gas utility industry is similar to the electric power industry but is comprised of many more organizations than the electric power industry’s 10 regional monopolistic privately owned companies. Furthermore, there co-exist both private and public gas providers, although most organizations in the gas utility industry are privately owned companies. Markets for large-scale consumers have been liberalized step by step since 1995. Liberalized markets represented only 36% of the market in 1995 but had expanded to 59% by 2007. Competition has become severe in the gas supply market. For example, the gas utility industry must compete with the electric power industry for LNG, which is used in thermal power generation. In fact, according to Ide and Okamoto (2004), about 75% of LNG is used by the electric power industry as opposed to 25% by the gas utility industry, making it seem likely that electric power supply companies will enter the gas supply market as liberalization progresses.

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