Full liberalization of the electricity retail market in April 2016 was followed by that of the city gas retail market in April 2017, and we are now entering a second year of unparalleled competition in the energy market. Tokyo Gas Group will be stepping up its efforts to offer more value to customers and make the Group their number one choice by offering them total energy solutions that combine gas, electricity, and liquefied gas with additional services.
The aims of the reforms to the gas system are to ensure stable supply and expand use of gas, to lower gas charges and raise customer satisfaction, and to expand customer choice and improve customer safety, and we prepared for full liberalization of the gas retail market to ensure that these aims are achieved. We are now a gas pipeline operator as well as a city gas supplier, and we will be doing everything possible as a Group to ensure that we act with full neutrality, fairness, and transparency in this new capacity. We are committed to working with gas retailers to expand the safe and stable supply and use of gas so that customers can use gas with confidence. In the electricity retail market, we will be offering new services and purchasing options, and our aim is to make customers glad that they switched to Tokyo Gas and ensure that “the true number one for electricity is the number one for customer satisfaction .”
We will continue to evolve as a total energy group that remains the customer’s choice and to contribute to the enrichment of society by serving as a one-stop shop for gas, electricity, and value-added services.
We are integrating our hitherto separate procurement and production operations into a single unit called the Gas Resources & Energy Production Division. This will improve coordination between LNG procurements and our LNG terminals and power plants, contributing to more stable energy supply and competitive LNG prices.
We are working to diversify our sources of LNG, terms under which procurements are made, and LNG network. We plan to receive our first shipments of U.S. LNG from the Cove Point project in the first half of fiscal 2017 and will commence procurements from the Ichthys project in Australia in the same year as part of our efforts to diversify our sources and contract terms. We are also pursuing new forms of LNG trading, such as swaps, in order to optimize transportation costs, and to this end we signed partnership agreements on LNG procurements with Kansai Electric Power in April 2016 and Kyushu Electric Power in April 2017, and an agreement on mutual cooperation with Centrica LNG of the United Kingdom in November 2016. We will continue to explore further partnerships with LNG players in Japan and around the world to diversify our LNG network.
Maintaining a close eye on conditions and developments facing the energy market, we will pursue these procurement initiatives to ensure continued delivery of affordable gas and electricity to the customer in the medium to long term.
We have responded to full liberalization of the gas retail market by adopting a set of rules entitled Regulations on Proper Performance of Transmission Service Operations . We have also set up a Transmission Service Center to handle applications and inquiries concerning use of transmission services. The center’s offices are physically isolated and information on transmission supplies is strictly controlled to prevent it from being used for any purpose other than that intended to ensure neutral, fair, and transparent access to our pipeline network.
We are collaborating with gas retailers on disaster drills and other activities to ensure safety in the event of a disaster so that customers can be confident of gas safety post-liberalization. We have also accelerated plans to enhance our gas pipeline network through, for example, construction of the Koga-Moka Line, which is scheduled for completion in around the fall of 2017.
In all these ways, we are working to ensure safety, supply stability, and wider use so that customers can use gas with confidence.
In fiscal 2017, we established the Power Business Division to take our development as an electricity utility to the next stage. We will be stepping up our development of power generating capacity and further enhancing our power trading and supply and demand management capabilities.
In concrete terms, we will pursue construction of a plant for Kobelco Power Moka (which will be Japan’s first full-scale inland thermal power plant) and consider building other new power plants to expand power generating capacity. We are also involved in projects supported by a variety of business schemes that make use of a full range of renewable resources, including solar, wind, and biomass power, in order to steadily expand our renewable power generating capacity. One such venture is the Prominet Power Co., Ltd., which was established in August 2017 to develop photovoltaic power generation projects.
The newly established Power Marketing & Trading Department will be introducing new risk management arrangements to improve the risk management techniques that we use. Competitiveness will be raised while controlling risks on both the procurement and sale sides as we work to optimize our short- and medium-term procurement and selling portfolios.
Initiatives such as these will allow us to optimize the procurement and sale of electricity and bring stable, affordable supplies to more and more customers.
Alongside selling energy in the form of gas and electricity, we will introduce new value and services to enrich customers’ lives.
In April 2017, we consolidated various “general appliance services” for residential customers that had hitherto been dispersed throughout the Group under a new holding company with three subsidiaries called Tokyo Gas Living Holdings Co., Ltd. We are also preparing new services and payment options for residential customers, and the entire Group will be working harder than ever to offer solutions that enrich customers’ lives and make us the one-stop shop of choice for gas, electricity, and other services.