METI Outlines License Revocation Procedure for Dormant Electricity Retailers

Following the July 2026 amendments to the Electricity Business Act, the Ministry of Economy, Trade and Industry (METI) will be able to revoke a retail license if, without a justifiable reason, the retailer (i) fails to commence its retail electricity business within one year of registration or (ii) suspends its business for one year or more. These measures addressing ‘dormant retailers’ are expected to take effect by the end of April 2027.

The revocation procedure will be as follows:

METI will determine whether a retailer is dormant by reviewing supply records in its filings, including supply plans, monthly generation and electricity receipt reports, electricity transaction reports, and suspension notifications.
METI then will assess whether a justifiable reason exists on a case-by-case basis, if a retailer does not have a justifiable reason, its retailer license will be revoked.

Justifiable reasons currently include unforeseeable and unavoidable circumstances, provided that the retailer plans to commence or resume retail supply within a reasonable period. One example is a generator’s failure to supply electricity to the retailer.

Misconduct involving dormant retailers has emerged in recent years, with some cases leading to criminal proceedings. In one case, parties acquired dormant retailers and carried out fraudulent customer-switching procedures (METI). Last year, a METI expert committee confirmed that more than 700 electricity retailers were registered, but approximately one-third were dormant.

🔍 Shulman Commentary:

METI’s measures targeting dormant retailers should strengthen discipline in the retail sector by ensuring that only genuinely active companies remain registered. Together with the new requirement for retailers to secure supply capacity one and three years ahead from FY2029 onward, the measures can improve market transparency and supply predictability, which can further alter market dynamics.

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