Chubu Electric Power Co.,Inc. | December 2018 Regular Press Conference : President Katsuno's Message - Key Point of President's Regular Press Conference (2018)

Key Point of President's Regular Press Conference (2018) December 2018 Regular Press Conference : President Katsuno's Message

December 18, 2018

Chubu Electric Power Co.,Inc.

  • I will be discussing the following matters today:
    • Establishment of the Business Creation Headquarters
    • Reflecting on this year and the New Year’s resolution for next year

Establishment of the Business Creation Headquarters

  • First, I am going to address the “establishment of the Business Creation Headquarters”.
  • Chubu Electric Power has decided to establish the “Business Creation Headquarters” in April 2019 to strengthen new business-related efforts for the realization of the growth strategy. 
  • We will combine the resources of Chubu Electric Power and “Chuden CTI”, our group company, in regards to emerging technology such as AI and IoT, actively utilize personnel well versed in emerging technology and business development, and promote cooperation across industries. This will enable us to swiftly develop and provide services that meet the needs of our customers, the region, and society to realize our growth strategy.

Reflecting on 2018

  • Now, I am going to reflect on the past year.
  • This year, we experienced tight supply and demand due to the severe winter and extreme heat of the summer, and the large-scale outages due to natural disasters such as typhoons, earthquakes and heavy rains. I acutely felt society’s expectations for us to stably supply electricity under all conditions.
  • It again highlighted the fact that electricity has become the “most important power infrastructure” in modern society. We will continue to do our utmost in meeting society’s expectations.
  • Meanwhile, we worked toward being the chosen utility, not only in price but as a comprehensive service provider in an increasingly competitive environment.
  • The rapid development of digital technology also allowed us to actively introduce new services.
  • In the “Chubu Electric Power Group Management Vision” formulated in March of this year, we established our goal to “build a new business model” based on the separation of power generation and distribution. We also pledged to push forward the “provision of a new community” as a new growth area that will lead to the resolution of various social issues. We intend to make this area into a primary source of revenue.
  • I will now reflect on the following five points in more detail.
    • Stable supply of electricity
    • Building a new business model
    • Providing a new community
    • Sales activities
    • Efforts related to Hamaoka Nuclear Power Station

    (Stable supply of electricity)

    • In regards to the stable supply of electricity, I would first like to apologize for all the outages and overall inconvenience we have caused our customers regarding the many typhoons that passed over the Chubu area.
    • Our customers and municipalities were critical of our performance during this time. We have taken this to heart, as a manifestation of the mounting expectations for early recovery resulting from electricity being a utility and the “most important power infrastructure”.
    • We will continue to enhance preparations for natural disasters by steadily implementing countermeasures to challenges and reflections gathered during this typhoon season.

    (Building a new business model)

    • In regards to “building a new business model,” we have finalized our policy to integrate our thermal power generation business into JERA in April 2019 and unbundle the general distribution business and electricity sales business in April 2020.
    • This will allow each separated company to grapple with their own unique business environment and market. They will be managed autonomously and will be able to respond flexibly and swiftly to the challenges they face.
    • As Japan’s energy business system reaches a historical turning point, Chubu Electric Power has decided to build a new business framework to pursue further growth in entering this new energy era.

    (Providing a new community)

    • In regards to the “provision of a new community”, we have established in our “Chubu Electric Power Group Management Vision” that we will combine our “energy and telecommunications infrastructure” and the latest digital technology in order to advance the “community support infrastructure” that will help solve the various issues facing our customers and the local community.
    • As part of this initiative, we have started services to “watch children and the community” and “check in on the elderly”, and have received positive feedback.
    • Our “Chubu Electric Power Group Management Vision” outlines our aim to become a corporate group with a consolidated ordinary income of 250 billion yen in the second half of 2020s by “building a new business model” mentioned above, and building a “community support infrastructure”.

    (Sales activities)

    • In regards to sales, we have been promoting various initiatives as competition grows tougher across industries and areas.
    • We have strengthened our sales framework according to area, type of product, and target customer base by establishing “CD Energy Direct” with Osaka Gas in April, “CS Energy Service” with Chubu Gas in October, and by planning to establish “Chuden Energy Service (tentative name)”, a distributor directly managed by Chubu Electric Power, in February 2019.
    • In addition, we will be establishing “Korekara Denki” sometime after November 2019 as a new service for customers whose FIT contracts will be ending. We will create a marketplace where customers can trade in various forms the electricity that they have generated.
    • We will continue to cooperate with a diverse range of companies in various industries to gain awareness of the customer needs and to be competitive not only in price but also by providing services with high added value.

    (Efforts related to Hamaoka Nuclear Power Station)

    • Finally, I want to talk about our efforts at Hamaoka Nuclear Power Station.
    • The Nuclear Regulation Authority is currently conducting a regulatory review of Hamaoka Nuclear Power Station Unit 4. The review of design basis ground motion and design basis tsunamis have reached its critical stage. We are currently trying to explain how the fault that runs through and to the north of the station premises is not an active fault.
    • We have been explaining to the public the necessity of nuclear power plants and our safety improvement measures. Once the design basis ground motion and design basis tsunami is established, we will be able to explain the effectiveness of our safety improvement measures and the safety of the Hamaoka Nuclear Power Station from a more objective standpoint.
    • We will continue to respond to the review sincerely and do our best to ensure that the review team confirms the station’s conformity with the new regulatory standards as early as possible.
    • We aim to build a relationship of trust with the local community and society by explaining our efforts at Hamaoka in detail and answering and resolving every single one of your concerns and questions.

New Year’s resolution for next year

  • I would now like to address our New Year’s resolutions for 2019.
  • As I’ve talked about before, the thermal power generation business will finally be integrated into JERA in April of next year.
  • With this, JERA will become an integrated system of power generation from fuel procurement to generation. I hope this whole value chain will enable JERA to work synergistically to the fullest extent and enhance the strengths of JERA as Japan’s largest thermal power generator.
  • 2019 will be an important year for preparing for the unbundling of the general transmission and distribution business and retail electricity business in April 2020: a shift from taking on a new business model as a challenge to actually implementing it.
  • With the unbundling, our value chain from generation, transmission and distribution, and retail will be severed, but our mission of providing stable, safe, high quality, and environmentally friendly energy at a reasonable price will remain unchanged.
  • The various business areas will cooperate to increase the value provided and services of Chubu Electric as a whole while working to reduce prices and respond to customer expectations.
  • The “Business Creation Headquarters” mentioned above will take the lead in actively and steadily promoting more than ever our efforts to build community support infrastructure.
  • Chubu Electric Power will continue to grow the existing energy businesses and seek integration with new services to pioneer a new energy era and pursue further growth.
  • I will head Chubu Electric Power’s efforts in becoming a leading total energy service corporate group that provides customers with better-than-expected services ahead of competitors.
  • This ends my presentation.