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Kansai Electric’s ethics called into question!

Repeated acts of breach of trust by Kansai Electric Power Co. left us dumbstruck.

It was recently learned that employees and others in the sales segment of the public company illegally browsed information on customers of power producers and suppliers (PPSs) that are rivals to the Osaka-based regional utility.

The sneak peek amounted to unscrupulous obstruction of fair competition. The utility should express deep remorse for the misconduct, investigate its causes and take thorough measures to prevent a recurrence.

A defect in the data system of a power transmission and distribution subsidiary of Kansai Electric allowed workers of the parent company access to information pertaining to PPS subscribers, including their names, phone numbers and power usage.

The Electric Utilities Industry Law forbids data of this nature to be leaked to parties other than power transmission and distribution companies.

The industry ministry’s Electricity and Gas Market Surveillance Commission (EGC) ordered Kansai Electric earlier this week to explain itself, obliging the utility to cooperate with utmost sincerity.

Kansai Electric officials said 330 or so workers were privy to customer information on around 1,300 PPS subscriptions during the most recent one-week period alone.

However, the actual scale of illegal access appears to be much larger as the data apparently had been accessible since the power retail market for households was liberalized in 2016.

Kansai Electric officials explained that the information in many cases was used when staff handled customers who were switching subscriptions. But the industry ministry suspects the utility misused the data for the purpose of soliciting subscriptions and analyzing PPS trends.

What remains unclear is why so many people had access to the information and if they were authorized to do so in an orchestrated attempt to keep or win new customers. The authorities are obliged to ferret out the facts and punish the utility rigorously.

The power transmission and distribution arms of major utilities were allowed to retain regional monopolies, even after the retail market was liberalized, in light of the nature of their operations. They are, however, required to remain neutral toward the retailers that use their power grid and are obligated to enforce strict information control.

The latest irregularity trampled on the aims and purposes of the liberalization that sought to achieve reasonable prices and service through fair competition. The utility’s gross disregard of the rules  emasculated the objectives of the spinoff of the power transmission and distribution segments.

In our view, Kansai Electric is woefully lacking in awareness, ethics and discipline worthy of an operator of power supply infrastructure that is highly public in nature.

Kansai Electric has been plagued by a succession of serious scandals in recent years.

In 2019 it emerged that the utility’s executives and other workers had received cash and other gifts from a local government official and from companies with links to him.

It was also later learned that Kansai Electric had secretly made up for a cut in remuneration for its directors that was slashed after the utility’s business performance worsened following the Fukushima nuclear disaster of 2011.

Last year, the Fair Trade Commission conducted a probe into Kansai Electric on suspicion the utility had formed sales cartels with other major utilities. It is believed Kansai Electric approached the other utilities with a proposal for the cartels.

Kansai Electric’s top management emphasized, when it announced a change of company president this past spring, that reform for compliance and corporate governance had made headway. But the latest finding of rampant misconduct until quite recently disproves this assertion.

As an operator of nuclear power plants and an industry leader, Kansai Electric wields considerable clout on Japan’s energy policy.

The fact the utility has not been able to shed its institutional mold for slighting the rules has given rise to an extremely serious situation.

Kansai Electric should radically rethink what it is being called on to do to fulfill its responsibility to society.

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