December 2014　Regular Press Conference : President Mizuno's Message

• 2014 will soon be over. The environment facing the electric power industry has changed drastically since the Great East Japan Earthquake. Chubu Electric Power, like others in the industry, continues to face serious challenges.
• Chubu Electric Power made many decisions this year in order to move forward.

(Application to increase of electricity rates)

• First, I would like to speak about the application to increase our electricity rates. 
• Due to increased fuel expenditure for thermal power due to the total shutdown of the Hamaoka Nuclear Power Station, we began implementing the first electricity rate increase since 1980 for customers of the deregulated sector starting April 1 of this year, and for customers in the regulated sector starting May 1 of this year. 
• We would like to once again offer our sincere appreciation to all our customers for their understanding of the electricity rate increase. 
• In order to minimize the burden on our customers due to the electricity rate increases as much as possible, management efficiency measures centered on fuel expenditures, personnel expenses, and the procurement costs of materials and equipment have been incorporated. 
• Currently, in regard to management efficiency improvement, the entire company has been working together with me taking the lead. As a result, we have emerged from three consecutive deficits, which was an unsound situation as a company, and expect to return to profitability this fiscal year. 
• However, regarding the dividends paid to our shareholders, we are forced to omit the interim dividends as well this fiscal year. We request your understanding under these circumstances.
• Chubu Electric Power will continue to fully use our ingenuity to achieve thorough efficiency and customer service improvement by making all-out efforts. 

(Regarding the Applications for Review of Compliance of Hamaoka Nuclear Power Station Unit 4)

• Next I will speak about the applications for review of compliance of Hamaoka Nuclear Power Station Unit 4 with new regulatory requirements.
• In February of this year, we filed an application to receive a review to verify that Hamaoka Nuclear Power Station Unit 4 complies with new regulatory requirements. 
• To date, there have been a total of 16 meetings conducted (2 overview explanation meetings, 10 plant examination meetings, 4 seismic examination meetings). When providing explanations and replying to the questions and opinions of the Nuclear Regulation Authority, Chubu Electric Power is making effort to offer information in a careful and easy-to-understand fashion.
• In October of this year, we compiled the items that should be reflected in the Hamaoka Nuclear Power Station Unit 4 safety improvement measures by reviewing the examination details of other power companies that are ahead in examinations, and we revised some part of the construction details in order to strengthen the measures aimed at improving site response capabilities mainly during serious accidents.
• As a result of the review of the construction details, approximately one additional year is expected to be required for the construction period, with an expected completion time of around September 2016 for Unit 4, and September 2017 for Unit 3.
• Chubu Electric Power will continue to put forward its best efforts to receive confirmation of conforming to new regulatory standards, while fully conducting safety improvement measures and sincerely responding to reviews by the Nuclear Regulation Authority.
• In addition, in order to further strengthen our voluntary and continuous efforts for improvement of safety for nuclear power, we compiled countermeasures and a timeline as a "Road Map" and released it in June of this year.
• The "Road Map" reflects our determination to "enhance governance," "enhance risk management," and "enhance risk communication."
• Thus far, we have enacted the "Chubu Electric Power Group Nuclear Safety Charter," a renewed pledge of Chubu Electric Power Group's determination to prevent a serious nuclear accident from ever happening again, and established the "Chubu Electric Power Co. Meeting on Improving Nuclear Safety Improvement Advisory Board" in order to receive advice and suggestions from external experts.
• Furthermore, with the goal to "enhance risk communication," we have decided to establish a "Communication Promotion Group," within the Public Relations Department as an exclusive department for nuclear communication, effective January 1, 2015.
• We are putting in more effort than ever into conveying information including risks in a careful and easy to understand manner to local residents and our stakeholders, while at the same time sincerely listening to and carefully responding to their worries and doubts with two-way communication.

(Comprehensive Alliance with TEPCO )

• Next, I would like to talk about the comprehensive alliance with TEPCO. 
• Chubu Electric Power has been performing various initiatives with the goal of realizing two growth strategies that were previously set forth in Chubu Electric Power’s “Management Vision 2030,” including the “Expansion of the domestic energy business area and scale” and the “Active overseas business deployment.”
• Against this backdrop, we proposed to TEPCO a comprehensive Alliance in May of this year, since we found that a comprehensive Alliance would be not only effective in securing national interests through a supply of energy on an internationally competitive basis, but also effective in realizing the two growth strategies mentioned previously.  
• Following this, as a result of negotiations held between both companies, three philosophies were shared with TEPCO that would become the foundation of the Alliance. Our company thus was chosen as the party to negotiate preferentially with TEPCO, leading to the conclusion of a Basic Agreement in October.
• The Alliance will be implemented starting with areas that will have a high impact and are easier to undertake. Areas of which the companies are to negotiate include fuel procurement and related business operations, including upstream fuel investments, fuel transportation, and trading, as well as new thermal power plant construction and thermal power plant replacement. Negotiations will also be held regarding overseas power generation and other areas. 
• We are currently moving forward with detailed negotiations toward the establishment of the Joint Venture to achieve the goal of this Alliance, and also striving to conclude a final agreement regarding this Alliance within this fiscal year.
• Furthermore, after ascertaining the impact of this Alliance, we will continuously consider more sophisticated and extensive Alliances step by step.
• That concludes my remarks for today.