Japan in major power industry reform

Will also eliminate restrictions on pricing as early as 2018.

Japan is reforming its domestic power industry by splitting nine regional utilities into generation, grid and retail companies. The Japanese Cabinet approved a plan proposed by a panel of experts in February that aims to encourage lower electricity prices while ensuring a stable power supply.

The government aims to revise Japan's power-business law over the next three years. It will submit the first amendments to establish nationwide grid operations by 2015 during the current parliamentary session to end late June

Later amendments will seek to liberalize the household market by 2016 and end price regulations and split up utilities by as early as 2018.

Many experts, however, are concerned the latest deregulation might end up increasing, and not lowering electricity prices. The price increase will likely occur during a period of power shortages stemming from the shutdown of the country's nuclear reactors following the Fukushima Daiichi accident in March 2011.

Experts admitted that it is difficult to seek lower prices while trying to secure a stable power supply at a time of shortages.