TOKYO Dec 26 Tokyo Electric Power Company
Holdings (Tepco) will enter the city's metropolitan gas
retail market next July, it said on Monday, opening a new stage
of competition with Japan's biggest city gas operator Tokyo Gas.
TEPCO Energy Partner Inc, Tepco's retail unit, will work
with gas operator Nippon Gas, which already has 320,000
city gas retail customers, to offer maintenance and other
The pair aim for about 500,000 customers by the end of March
2018, including Nippon Gas' existing customers, and to boost
that to one million by the end of March 2020, or about 10
percent of Tokyo Gas' customer base, a TEPCO Energy Partner's
official told a news conference.
The move chimes with Japan's plan for nationwide
liberalisation of its 2.4 trillion yen ($20 billion) retail gas
market in April 2017. Competition between utilities and gas
operators was spurred in April when Japan's $70 billion retail
electricity market was opened up.
Under the latest agreement, Tepco will provide piped gas
equivalent to about 275,000 tonne a year of liquefied natural
gas (LNG) from next April to Nippon Gas which has been buying
LNG from Tokyo Gas.
To counter the challenge, Tokyo Gas aims to further expand
its market share in electricity, its president Michiaki Hirose
told a separate news conference.
"We've gained about 600,000 electricity customers, exceeding
our target of 530,000, but that's only 2-3 percent of Tepco's
20-22 million customers," he said.
"Our goal to win a 10 percent market share in 2020 would
represent about 2.2 million customers ... we want to achieve
that although the hurdle is fairly high."
Asked whether the liberalisation of the city gas market will
prompt consolidation among utilities and gas operators, Hirose
said that was likely.
"Japanese energy companies need to become competitive in the
global market, which means they will need economy of scale. For
that reason, I expect to see more consolidation in the
industry," Hirose said.
"There is also a chance that two or three big fuel
procurement companies like JERA will be created in Japan in the
future. We want to be a key player in one of them," he added.
JERA, the world's biggest importer of LNG, is a fuel joint
venture between Tepco and Chubu Electric Power.
($1 = 117.1300 yen)
(Reporting by Yuka Obayashi; Editing by Ruth Pitchford)