Power utilities would be urged to make cost-cutting efforts under a new law, which Japan plans to introduce to promote the use of renewable energy, so as to prevent utilities from easily passing on the cost of buying such power from outside generators to consumers, a draft bill showed Friday.
Under the envisaged law, utilities will be required to purchase all electricity generated by renewable energy sources such as solar and wind power at fixed prices favorable to outside providers — private companies and other entities. The law also allows utilities to add the cost of buying such energy to their electricity charges for consumers.
But by adding a provision requiring utilities to streamline their operations, lawmakers apparently aim to minimize the impact on consumers.
The effective date of the law would be July 1 next year. The bill worked out by ruling and opposition lawmakers stipulates that utilities cannot raise their electricity charges by the end of March 2013 in areas struck by the devastating March 11 earthquake and tsunami.
The bill is an amended version based on an agreement reached by the ruling Democratic Party of Japan, the main opposition Liberal Democratic Party and its ally New Komeito party, and is expected to be submitted to parliament next week.
A third-party organization would be set up under the Agency for Natural Resources and Energy to ensure transparency in the process of deciding prices.
