Competition between power companies is likely to intensify after Tokyo Electric Power Co.’s Thursday announcement of a plan to sell electricity across the nation. Other power companies have already begun expanding their markets into the Tokyo metropolitan area, in the run-up to a full and nationwide liberalization of the electricity retail business planned for 2016. TEPCO’s latest moves will target businesses in Kansai and Chubu, as well as other regions.
“We will change our current mindset of prioritizing customers in the Kanto region. We will go forth into battle, and face the competition squarely,” said Hideo Sanada, a division head of business strategy at Tepco Customer Service Corp., at Thursday’s press conference. The wholly owned TEPCO subsidiary performs sales operations for the parent company.
The energy provider aims to secure deals with major firms that are already business partners or customers in the Tokyo metropolitan area to supply their factories in the Kansai and Chubu regions, in addition to home electronics mass retailers and supermarkets in those areas.
TEPCO will offer not only lower rates for power but also services such as suggesting electricity- or gas-saving measures. After the planned liberalization in 2016, which will allow households to choose electricity retailers freely, TEPCO will consider marketing power to households across the nation.
It aims to boost sales to about ¥34 billion within three years, and to ¥170 billion in 10 years. “Having been attacked [by other power companies] in the Tokyo metropolitan area, we should go attack their territories,” a senior official said about the company plan to develop markets in Kansai and Chubu regions. In the Tokyo metropolitan area, home to about 30 percent of the nation’s entire power demand, Kansai Electric Power Co. and Chubu Electric Power Co. have already started selling power, and Chugoku Electric Power Co. also plans to join the competition.
The energy provider aims to secure deals with major firms that are already business partners or customers in the Tokyo metropolitan area to supply their factories in the Kansai and Chubu regions, in addition to home electronics mass retailers and supermarkets in those areas.
TEPCO will offer not only lower rates for power but also services such as suggesting electricity- or gas-saving measures. After the planned liberalization in 2016, which will allow households to choose electricity retailers freely, TEPCO will consider marketing power to households across the nation.
It aims to boost sales to about ¥34 billion within three years, and to ¥170 billion in 10 years. “Having been attacked [by other power companies] in the Tokyo metropolitan area, we should go attack their territories,” a senior official said about the company plan to develop markets in Kansai and Chubu regions. In the Tokyo metropolitan area, home to about 30 percent of the nation’s entire power demand, Kansai Electric Power Co. and Chubu Electric Power Co. have already started selling power, and Chugoku Electric Power Co. also plans to join the competition.
In TEPCO’s traditional territory, more and more large customers are switching to other power companies that offer lower prices for high-volume energy consumers such as businesses.
Since the liberalization of retail electricity supplies for large organizations in 2000, TEPCO has lost about 32,200 contracts—more than 10 percent of its entire customer base—as of April 1. Outside of major metropolitan areas, however, local power companies have strong ties with local businesses.
With about 10 to 20 workers at a subsidiary promoting sales nationwide, it does not seem that developing a new market will be easy for TEPCO. Also, the company needs to buy the power it will sell outside the Tokyo metropolitan area from firms with their own generation facilities, or at electricity exchanges where power companies and others buy and sell energy. TEPCO’s first challenge will be to procure the electricity it needs at a reasonable price.
(The Japan News)
Since the liberalization of retail electricity supplies for large organizations in 2000, TEPCO has lost about 32,200 contracts—more than 10 percent of its entire customer base—as of April 1. Outside of major metropolitan areas, however, local power companies have strong ties with local businesses.
With about 10 to 20 workers at a subsidiary promoting sales nationwide, it does not seem that developing a new market will be easy for TEPCO. Also, the company needs to buy the power it will sell outside the Tokyo metropolitan area from firms with their own generation facilities, or at electricity exchanges where power companies and others buy and sell energy. TEPCO’s first challenge will be to procure the electricity it needs at a reasonable price.
(The Japan News)
