Japan's electricity prices are by far the highest in the OECD, and Japan has begun a program of reforms designed to make its electric utility sector more efficient. Currently, Japan is served by 10 vertically integrated utilities which each have a specific geographic zone. The Japanese Diet passed a bill in May 1999 which amended the Electric Utilities Industry Law (EUIL) to allow a partial opening to competition. Beginning in March 2000, about 8,000 large industrial and commercial Japanese electric power consumers, comprising roughly one-third of the Japanese power market, have been able to chose their electricity suppliers. Regional utilities currently are obligated to allow power from other suppliers to transit their grids to these large consumers. In April 2005, an additional phase of deregulation will take effect, which will extend competition to all industrial and commercial entities with peak demand over 50 kilowatts. While a small percentage of Japan's electricity has been provided by independent power producers (IPPs) since 1995, the new deregulation is expected to generate much more investor interest in developing IPPs, though progress in this direction has been slower than expected due to weak demand.
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