Deregulation, Bulk Procurement to Cut Electricity Costs for Seven-Eleven Stores by 5%

Seven-Eleven Japan Co., the country's largest convenience store operator, began bulk procurement of electricity for about 700 stores it operates in the Kyushu area. This arrangement, through Mitsui & Co., a leading Japanese trading company, began at the end of May 2005.

Taking advantage of Japan's gradual deregulation of electric utilities, which officially began on April 1, 2005, the Seven-Eleven Japan ended its low-tension power contract (up to 50 kilowatts, the same as households) with Kyushu Electric Power Co. and entered a lower-cost high-tension power contract (up to 500 kilowatts) with Mitsui. The company expects savings per store amounting to 5 percent of the average annual electricity cost of 2.8 million yen (about U.S.$26,000) due to the price difference between low-tension and high-tension contracts.

Mitsui sells electricity procured from power generation companies in Japan such as Kyushu Electric Power by installing and maintaining utility poles and transformers, which draw high-tension power and convert it to low-tension at each store .This is the first time that Mitsui has entered the retail electricity business in Japan.

Seven Eleven Japan aims to further reduce electricity charges by expanding this approach it has taken in Kyushu to other regions in Japan, including Chubu and Kinki.



Posted: 2005/08/29 09:42:57 AM
Japanese version