April 2016 Regular Press Conference : President Katsuno's Message

(Summary of financial results)

• Looking at consolidated sales, lighting power charges dropped in the electricity business. Contributing factors were the mild winter and automobile-related production decreases that caused drops in both electric power sales and fuel cost adjustments.
• Other businesses also saw a decrease in energy service sales. Chubu Electric Power’s consolidated sales thus marked 2,854 billion yen, a 249.5 billion yen decline from the last term.
• The consolidated ordinary income rose 195.4 billion yen from the previous term, standing at 255.6 billion yen. This owes to the widening different-timing margin between fuel adjustment and fuel costs, associated with fuel price reductions in the electricity business, and another contributing factor was reduced thermal power fuel costs following an increase in hydropower generation.
• Turning to non-consolidated financial results:
  Sales dropped 250.6 billion yen from the last term, standing at 2,648.3 billion yen
  The operating income grew 174.3 billion yen from the last term, standing at 265.2 billion yen
  The ordinary income grew 191.7 billion yen from the last term, standing at 233.6 billion yen
  The net income grew 129.8 billion yen from the last term, standing at 157.2 billion yen
  

(Earnings outlook for FY2016 )

• I now turn to the earnings outlook for FY2016.
• Chubu Electric Power expects its consolidated sales to fall to 2,620 billion yen. This owes to decreased revenue resulting from a drop in fuel cost adjustments.
• We also expect a decrease to 130 billion yen for our consolidated ordinary income. This is a result of the narrowing different-timing margin between fuel adjustment and fuel costs, which is accompanying fuel price reductions.

(Dividend)

• I now turn to dividends.
• Chubu Electric Power’s basic stance is to invest in developing and managing equipment that is vital for the safe and stable supply of electric power, while also endeavoring to offer steady dividends on account of financial conditions.
• Progress was observed in FY2015 regarding efforts to streamline management. This enabled us to secure our income at levels exceeding the previous term, even upon excluding the temporary different-timing margins accompanied with the sharp fuel price decline.
• On top of these earnings circumstances, and on the premise of continuing our all-out efforts toward management efficiency, we made a comprehensive judgment on financial conditions while continuing to invest for equipment that is essential in safely and stably supplying electric power. We thereby decided on 15 yen per share for the FY2015 year-end dividend.
• We also made a comprehensive judgment on mid- to long-term financial and business conditions alike, on the premise of continuing to make every effort toward management efficiency, and thereby decided on 30 yen per share for the FY2016 dividend forecast.
• Chubu Electric Power will continue to streamline management in a company-wide fashion, and will work to cater to the expectation and trust from customers, shareholders, and the society alike.

• I now turn to the Kumamoto Earthquakes.
• We extend our deepest condolences to the people who lost their lives in the earthquakes, and our thoughts go out to those suffering in its aftermath.
• Kyushu Electric Power is making every effort to swiftly restore the earthquake-induced blackout around Kumamoto Prefecture, and utilities that accepted the company’s request for assistance are dispatching workers and such cars as generator vehicles.
• Chubu Electric Power also started sending vehicles and personnel on April 16. Since April 19, some 230 members have been engaging in support activities to restore electric power in Aso, Kumamoto.
• Under Kyushu Electric Power’s directions, we thus far have been employing generator vehicles to resolve the blackout.
• With the temporary restoration work for the earthquake-affected transmission equipment completing, transmission from network services restarted today.
• Chubu Electric Power will continue to provide full assistance to bring the quake-affected local residents back to their regular lives as soon as possible.

• I now turn to measures implemented at Hamaoka Nuclear Power Station.

(Suspension of Hamaoka Nuclear Power Station’s operations based on request from the Prime Minister)

• Next month will mark five years since Hamaoka Nuclear Power Station suspended its operations.
• On May 6, 2011, less than two months after the Great East Japan Earthquake, Chubu Electric Power received a request from the Prime Minister of the time to suspend operations at Hamaoka Nuclear Power Station. In response, we shut down Units 4 and 5 on May 13 and 14, respectively, and suspended the resumption of operations at Unit 3.
• I can recall how all management members engaged in a series of discussions under former President Mizuno.
• We saw this request from the Prime Minister as a consequence of growing unease amongst the public toward nuclear power, following the Fukushima Daiichi Nuclear Power Station accident, and discussed from all aspects what response we should make.
• Our decision to suspend operations was predicated on the belief that the trust from relevant parties, including the community around the station, is vital for Chubu Electric Power to leverage nuclear power over an extended period.
• It was a bitter, yet the best decision that Chubu Electric Power could make.
• Today I will talk about works to enhance safety and the current status of nuclear emergency preparedness, both of which are initiatives that we are making full commitment to.

(Works to enhance safety)

• Regarding physical measures, i.e. works to enhance safety, we completed tsunami protection walls late last month. This includes the east and west embankment.
• Current efforts underway include:
  • Start-up tests of six gas turbine generators established in an elevated area 40 m above sea level
  • Unit 4 pipe installation work for filter vents
  • Work to establish a water barrier preventing flooding from the water intake chamber

   

• Works to enhance safety will complete in September 2016 and September 2017 for Units 4 and 3, respectively.

(Nuclear emergency preparedness)

• Turning to non-physical measures, I will share the primary items from details reported on April 15 to Mr. Hayashi, the Minister of Economy, Trade and Industry.
• The report provides the current status of nuclear emergency preparedness in the station’s neighboring areas, along with such accident recovery activities as field response capabilities in the wake of emergencies.

(Accident recovery activity)

• To swiftly bring the situation under control when Hamaoka Nuclear Power Station experiences an accident, Chubu Electric Power is carrying forward the following efforts:
  • Developing a field response framework
  • Stepping up training
  • Boosting up deployment of materials and equipment

   

• In terms of developing a framework, Chubu Electric Power launched an Emergency Readiness Team in July 2014. This is an organization of field response specialists that start taking action from initial stages of accidents.
• The Emergency Readiness Team is the first to come to the field and perform initial responses. They also lead the assembled emergency response personnel and engage in field responses.
• Given that initial responses during accidents are key to preventing the accidents from escalating, we plan to have the Team reside at the station 24 hours a day, all year round.
• With routine-basis training,
  • The competency to immediately decide the best measure during emergencies and reliably performing it
  • The competency to address a wide array of fields in a flexible manner, e.g. processing debris and operating mobile equipment

  the Team will upkeep technological expertise such as the following that allows for swift and accurate initial responses.

• Apart from the Emergency Readiness Team, our measures to bring the accident under control include:
  • Assigning to all 600 personnel, excluding Hamaoka Nuclear Power Station operators, roles as emergency response personnel
  • Role-based training, e.g. controllers, field personnel, operators
  • Encouraging members to obtain qualification to handle special vehicles/heavy equipment

   

• Swiftly recovering from accidents requirerequires developing a framework, along with improving and maintaining the individual skills of working employees.
• Chubu Electric Power will continue to train its employees in a drive to make appropriate responses in the wake of emergencies.
• Along with our own initiatives introduced thus far, we will achieve further ties with other nuclear operators and the emergency support organization, co-established by nuclear operators, thereby working to further boost accident recovery activities.

(Nuclear emergency preparedness)

• Measures for the station’s neighboring areas are crucial nuclear emergency preparedness steps that must be drawn up in tandem with measures implemented at Hamaoka Nuclear Power Station.
• Chubu Electric Power will be fully prepared to prevent accidents in the station and to swiftly recover from it in the wake of such events, but we will also arrange measures to provide for accidents developing into a local resident-affecting emergency.
• When nuclear emergencies occur, Chubu Electric Power will communicate information to the station’s neighboring local governments, Shizuoka Prefecture, and the national government in a timely and appropriate manner. At the same time, we will dispatch our employees to the off-site center to provide information.
• When residents must evacuate, Chubu Electric Power will serve its role as an operator regarding transportations for temporary relocations, screening, monitoring, and other undertakings required for swift evacuation processes.
• We have thus far been establishing nuclear emergency preparedness, regarding it as a responsibility that nuclear operators should take. We seek to further strengthen our ties with neighboring local governments and Shizuoka Prefecture alike.
• With these efforts serving as a stepping stone, we will scale up screening and other skills needed for evacuation through training in an effort to both enhance the effectiveness of nuclear emergency preparedness and to make flexible, progress-based responses.

(Summary)

• With our strong commitment to preventing any events similar to the Fukushima Daiichi Nuclear Power Station accident, we will have our members thoroughly understand that nuclear safety measures are never-ending processes.
• Without being self-complacent on complying with new regulatory requirements, Chubu Electric Power will make unremitting efforts to improve the safety of Hamaoka Nuclear Power Station. This will be achieved by maintaining physical and non-physical measures alike to further step up the station’s safety, and steadfastly enhancing the technology and skills for both operation and maintenance.
• As I referred to at the beginning of my message, the trust from relevant parties, including the community around the station, is vital in resuming the operation of Hamaoka Nuclear Power Station. Chubu Electric Power thus plans to thoroughly illustrate our activities.