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Japan: Regulation of Heat Supply Business Relaxed

(Aug. 19, 2015) To reform energy-related businesses in Japan, several laws were amended and promulgated on June 24, 2015. (Act Amending Electricity Business Act and Others, Act No. 47 of 2015, text of the bill that was enacted without change, House of Representatives website (in Japanese).) One of the amended laws is the Heat Supply Act (Act No. 88 of 1972, as last amended by Act No. 94 of 2004, E-GOV (in Japanese).) The first district heating and cooling system in Japan was introduced in 1970, and the Heat Supply Act was enacted in 1972. (Kiyoshi Koshiba, Japan’s District Heating and Cooling Systems, JFS NEWSLETTER No.82 (June 2009).)

A heat supplier operating a facility with a capacity of 21 gigajoules (GJ) or more per hour must currently obtain a license from the Minister of Economy, Trade and Industry. (Heat Supply Act, arts. 2 & 3; Heat Supply Act Enforcement Order, Order No. 420 of 1972, amended by Order No. 311 of 2000, art. 2.) As a result of the recent amendment of the Act, a supplier will no longer have to obtain a license but must register with the Minister of Economy, Trade and Industry. (Heat Supply Act, art. 5, as amended by Act No. 47 of 2015.) A supplier currently must obtain approval for the rates it charges and other supply conditions (Heat Supply Act, art. 14) and cannot refuse to supply heat without a legitimate reason (id. art. 13), but these restrictions will be removed. (Press Release, Cabinet Decision Was Made for Bill Amending Electricity Business Act and Other Acts, Ministry of Economy, Trade and Industry website (Mar. 3, 2015).)