Application for Approval on Wheeling Service Provisions
July 31, 2015
Chubu Electric Power Co.,Inc.
Chubu Electric Power applied for approval today to the Minister of Economy, Trade and Industry on Wheeling Service provisions stipulated under Article 18-1 of the Act for Partial Revision of the Electricity Business Act and Other Related Acts (Act No. 72 of 2014). This application was issued pursuant to the stipulations under the additional clause Article 9-1 of the foregoing act, which sets forth the implementation of full retail deregulation and other particulars.
The Wheeling Service provisions stipulate rates and other supply conditions in the event of utilities besides Chubu Electric Power, including PPS, using our power transmission and distribution equipment. Based on the details discussed at national-level councils*1 and amendments made on laws aimed towards the full retail deregulations on electric power starting from April 2016, Chubu Electric Power revised the current Wheeling Service provisions.
The key details of the revision are as provided below.
1 New establishment of wheeling charges for low-voltage electricity
With the full retail deregulation of electric power, customers being supplied with low-voltage electricity will fall under the scope of the liberalization. For this reason, Chubu Electric Power established new wheeling charges for low voltages.
The average charge per 1kWh under the applied low-voltage wheeling charge is arranged at 9.03 yen.
2 Revisions on the wheeling charge for high-voltage and extra high-voltage electricity
Chubu Electric Power lowered its business compensation ratio for wheeling charge costs from the current 2.9% to 1.9%. In the meantime, by adding costs associated with maintaining the frequency of electricity and supply-and-demand balance adjustments, Chubu Electric Power revised its wheeling charge for high-voltage and extra high-voltage electricity.
Consequently, the average charge per 1kWh under the applied wheeling charge is arranged at 3.56 yen for high-voltage electricity (currently at 3.56 yen), and 1.87 yen (currently at 1.84 yen) for extra high-voltage electricity.
3 Revisions on the imbalance charge
Chubu Electric Power changed the imbalance charge*2 into a framework that works in conjunction with the Japan Electric Power Exchange's market price (i.e. setting the market price as the standard, this framework fine-tunes the unit cost in view of nationwide supply-and-demand situations and per-area adjustment costs) from the current one that applies fixed unit costs.
4 Revisions on the discount system
Chubu Electric Power added low voltage power under the scope of proximity evaluation discounts that are currently in place*3, and revised the areas subject to the discounts and the unit cost of discounts.
The Wheeling Service provisions applied for approval is slated for implementation on April 01, 2016 after undergoing examinations by METI.
*1 National-level councils refer to bodies including the Advisory Committee for Natural Resources and Energy, the Strategic Policy Committee, the Electricity Systems Reform Subcommittee, and the System Design Working Group.
*2 Imbalance charge refers to the cost applied when Chubu Electric Power's power transmission and distribution sector adjusts electricity-related discrepancies that occur when power producers fail to generate electricity in step with the power use conditions of customers.
*3 Proximity evaluation discount refers to a system in which the wheeling charge is reduced when employing power generating equipment at areas that have been evaluated that installing power generating equipment would result in improved electricity flows.