Japan to overhaul power industry

Reforms will be first major overhaul since the early 1950s.

It will revise Japan's power-business law over the next three years. The first amendment to establish nationwide grid operations by 2015 during will be submitted during the current parliamentary session that will end in late June.

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

The reforms will see Japan break-up the existing nine regional utilities into generation, grid and retail companies. It will also eliminate restrictions on pricing by as early as 2018.

The reforms, which were approved by the Cabinet, aim to encourage lower electricity prices while ensuring a stable power supply. Carrying out the plan in stages, however, might give the industry time to contest the reforms.

Utilities argue that more time is needed to stabilize the power supply following the Fukushima nuclear accident of March 2011.

Many experts, however, are concerned the latest deregulation might end up increasing, not cutting, electricity prices as it will likely occur during a period of power shortages stemming from the shutdown of the country's nuclear reactors.