December 2016 Regular Press Conference : President Katsuno's Message

• The environment surrounding the energy business is undergoing a drastic change. Examples include the full retail deregulation of electric power that started this April, and the liberalization of gas retail scheduled for April 2017.
• We at Chubu Electric Power have interpreted such historic turning points as a re-experiencing of our company’s inauguration process. Throughout this year, we have been reaffirming our company’s future course and working united as a team to establish a new foundation.

(Chubu Electric Power Group’s Management Vision)

• In February, we compiled Chubu Electric Power Group’s Management Vision and launched an effort toward achieving our ideal: a leading total energy service corporation.

(Initiatives for management issues)

• March saw the announcement of our initiatives for management issues, through which we presented concrete approaches to realizing the Management Vision.
• Our medium-term quantitative objective set in these initiatives was: “becoming a corporate group that can, by FY2018, gain 150 billion yen or more in terms of consolidated ordinary income.”
• With Hamaoka Nuclear Power Station out of operation, this is a considerably challenging objective for us, but we are striving to achieve it by Group-wide streamlining and development-propelling initiatives.

(Launch of the internal company system)

• This April, Chubu Electric Power launched an internal company system in the business fields of power generation, power transmission and distribution, and retail.By operating independent business formats that better combine responsibilities and authorities under the lead of Company Presidents, we prepared a system that can swiftly and flexibly address changing business trends.
• The internal companies will work to anticipate the shift in trends and provide valuable services to customers at a faster pace. This will in turn broaden Chubu Electric Power’s business areas and increase our revenue.

• I now turn to the full-scale deregulation of electric power retail, which started this April.

(Electric power retail sales in the Chubu area)

• We at Chubu Electric Power are enjoying a positive response to the rate menus introduced into the Chubu area this April. As of December 8, the menus succeeded in attracting around 1,050,000 applications.
• The favorable reaction is likely a result of harnessing several routes for conveying the rate menus to customers, including KatEne and CHUBU DENRYOKU HAJIMERU BU, in addition to rolling out services and rate menus reflecting customer needs.
• In spite of this fact, there are many customers who remain cautious. We are thus expecting competition in the Chubu area to heat up.
• It is our wish to continue providing service to as many customers possible among the approximately 6,000,000 Chubu area households. To this end, we will maintain our efforts in identifying customer needs and offering services with high added value.

(Electric power sales in the Tokyo metropolitan area)

• I now turn to undertakings in the Tokyo metropolitan area.
• One of Chubu Electric Power’s key strategies is to expand business in the Tokyo metropolitan area, but we lack an operating base in the region. Our business in the capital area is thus being rolled out through a series of different routes. Examples include direct marketing by Chubu Electric Power, the supply of wholesale electricity by Diamond Power Corporation, and through the agency/sales of partner companies.
• The collective efforts of the Chubu Electric Power Group have been translating into steady results. The number of applications reached around 50,000 as of December 8.
• We will work to acquire 100,000 customers in the greater Tokyo area at the earliest possible timing.

(Gas retail sales)

• The next topic is the full-scale deregulation of gas retail, which is to start from April 2017.
• The full liberalization of gas retail is an excellent opportunity for Chubu Electric Power to broaden its share within the gas market. We accordingly decided to venture into household customer-geared gas sales starting next April, in the service areas of Toho Gas. The goal we set is high: Acquiring 200,000 new customers in five years.
• Chubu Electric Power was registered for gas retail operations on November 24. Currently we are in the process of considering a low-cost, readily understandable gas rate menu, which is scheduled to be announced in January 2017.
• We also believe that in order to enable customers confidently use the gas supplied by Chubu Electric Power, it’s essential to establish a reliable sales and security system. As a newcomer in the gas sales domain, we will strive to step up our sales and security to encourage customers to select our service.
• Chubu Electric Power will continue to put ourselves in the position of customers and think from the perspective of customers as well, thereby aiming to serve as a daily-life coordinator that straddles energy domains and satisfies all clients.

• I now turn to undertakings related to Hamaoka Nuclear Power Station.

(Physical measures)

• Determined not to let an accident similar to the Fukushima Daiichi Nuclear Power Station recur, Chubu Electric Power has been working on both physical and non-physical measures geared toward enhancing Hamaoka Nuclear Power Station’s safety.
• This September saw the completion of the key construction projects of Unit 4, designed by Chubu Electric Power. The Unit now has stronger power, coolant injection, heat removal, and other primary functions.

(Review meeting)

• In terms of responses to the review on Hamaoka Units 3 and 4’s compliance with new regulatory requirements, Chubu Electric Power is giving priority to Unit 4.
• We have finished briefing about each plant review item. At the moment, we are being screened jointly with utilities that own BWR plants.
• Regarding the screening on earthquakes and other issues, reviewers have expressed general understanding toward Chubu Electric Power’s approach both to interplate earthquake assessments and active faults in the site’s vicinity. We will be moving on to reviews related to design basis tsunami and ground motion settings, as well as on-site fault assessments.
• We at Chubu Electric Power will continue to carefully respond to the reviews, and make every effort to have the Nuclear Regulation Authority verify our conformance to the new regulatory requirements.
• We will be preparing to put Unit 3 under review after Unit 4.

(Non-physical measures)

• Efforts are underway to establish a system to prevent on-site accidents, and recover from such incidents if they occur. Non-physical measures are being promoted as well to provide for such accidents developing into one that affects local residents.
• Chubu Electric Power is working all-out at the moment to prepare disaster prevention measures and amplify training. At the same time, we are strengthening partnership with the national government and local authorities to boost the effectiveness of resident evacuations and other emergency responses.

(Conclusion)

• Chubu Electric Power will go beyond responding to the new regulatory requirements, and continue to further enhance safety levels.
• Moreover, regarding initiatives for Hamaoka Nuclear Power Station, Chubu Electric Power will continue to thoroughly offer explanations to local residents and society at large. We will also engage in communication efforts to address each concern and doubt of such parties, thereby building a relationship of trust.

• I now turn to JERA.
• JERA is an institution Chubu Electric Power established in April 2015 jointly with Tokyo Electric Power. Existing fuel, overseas power generation and energy infrastructure businesses of both utilities have been integrated into the company this July.
• With this business merge, JERA established a framework to integrally and optimally manage the supply chain, spanning from fuel upstream stake and procurement, overseas power generation, to the new development and replacement of domestic thermal power plants.It is our belief that combining the two utilities’ assets, technology, and knowledge developed thus far will enable JERA to play a central role in the international energy market.
• We at Chubu Electric Power hope that providing a stable supply of internationally competitive electric power, gas, and other energy sources through JERA’s business rollout will result in enhancing Chubu Electric Power Group’s corporate value.
• Chubu Electric Power will continue reviewing the integration of existing thermal power operations so as to form a decision at around the spring of 2017.

• Chubu Electric Power’s development is founded on customer trust, which we cultivated through our longstanding efforts to stably supply power. This trust will remain unchanged, regardless of how our business environment may change.
• We at Chubu Electric Power will continue to work toward fulfilling the unwavering mission of ours: Providing environmentally-friendly, high-quality energy in a safe, reasonable and stable manner.
• Meanwhile, we will harness such new technology as ICT to live up to diversifying customer expectations, and maintain our efforts to create new value on account of the changing times.
• I will continue to lead Chubu Electric Power’s efforts in order for the company to become a leading total energy service corporation that provides better-than-expected services ahead of competitors.