No.117 Conclusion of agreement for establishment of new municipal electric power company

On August 25, 2021, Inagi City and Pacific Power Co., Ltd. signed an agreement (tentative name) for joint consideration of regional energy business by Inagi City New Electric Power Company.
This agreement is for joint consideration of the establishment of a "new municipal power company" that will procure and supply renewable energy, etc., in order to achieve carbon neutrality in 2050.
Previously, electricity was supplied by major electric power companies that had a regional monopoly called "general electric utilities," but retail liberalization was carried out in stages from March 2000, and from April 1, 2016, Full retail liberalization was implemented.
New companies that have entered the market as a result of this liberalization are designated power producers and suppliers (PPS), known as "new electric power companies," and there are currently 730 registered power producers and suppliers.
The current power supply system is divided into power generation companies, transmission and distribution companies, and retail electricity companies, and the new electric power company falls under the category of retail electricity companies.
New power companies purchase electricity from power generation companies and the Japan Electric Power Exchange (JEPX), or sell electricity generated by their own power generation equipment to consumers (demanders), but they do not own the transmission and distribution equipment. Therefore, electricity is transmitted to customers using the power transmission network of the power transmission and distribution company by paying a usage fee called wheeling fee.
The primary purpose of the series of electricity liberalizations is to introduce the principle of market competition, relax regulations on entry into the electricity industry, which had been a regional monopoly, and lower electricity rates.
The project also aims to encourage a variety of power generation companies to enter the project, as the subsequent nuclear power plant accident caused by the Great East Japan Earthquake made it difficult to maintain a stable supply of electricity.
Furthermore, it is not only economically motivated, but also meets the objective of promoting the spread of environmentally friendly electricity.
Amid this liberalization, local new electric power projects funded by local governments arose, and the number of local new electric power companies that are the main actors in these projects has grown to more than 50 nationwide. There is no clear definition of a regional new power business, but it is roughly defined as a "new power business that is carried out by local entities in a manner that takes advantage of local characteristics for the purpose of regional development," and involves generating electricity using renewable energy such as sunlight. We are supplying electricity.
In Inagi City, as a project for 2021, we will consider whether the city can invest to establish a new Inagi City Electric Power Company (tentative name).
The purpose of this is to effectively utilize the city's energy resources to reduce carbon dioxide emissions, aim for local production and consumption of energy, and return energy resources that had been drained outside the city to the local area for business operations. We aim to circulate profits and promote regional development.
We have been holding study sessions with Pacific Power Co., Ltd. since fiscal 2019 and conducting research on profitability simulations and other matters.
We have now entered into an agreement with the aim of establishing a company and proceeding with further consideration of its feasibility.
At this point, the establishment of the company and the implementation of the project have not been confirmed, but if the project becomes a reality, it will have a big impact on the "realization of a regional circular and symbiotic sphere" and "implementation of SDGs" that Inagi City is promoting. This is a first step, and we will continue to make efforts to make it a reality.