Key Point of President's Regular Press Conference(2006) July 2006

July 28, 2006
Chubu Electric Power Co.,Inc.

Today I will be talking about three items:

1.FY2006 first quarter financial results

• • First I'd like to talk about Chubu Electric's financial results for the first quarter of FY2006.

(Summary of quarterly financial statement)

• • In the electricity business, growing volume pushed sales up to a total of 516.4 billion yen, a gain of 37.4 billion yen.
• • Costs in the electricity business, however, increased by 30.9 billion yen. Personnel costs and depreciation and amortization expenses declined, but fuel costs increased.
• • The net result was ordinary income of 75.7 billion yen, an improvement of eight billion yen over the same period last year.
• • Our nonconsolidated financial statement for the first quarter shows sales of 499.5 billion yen and ordinary income of 75 billion yen. As with the consolidated profit and loss statement, both figures represent increases year on year.

(Cashflow outlook for FY2006)

• • The volume of electric power sales is expected to decline 1.8% year on year to 128.2 billion kWh. Because of this and other factors, consolidated net sales are predicted to fall to 2.135 trillion yen.
• • As for costs, Chubu Electric has been effecting cost reductions affecting our entire business management, but increasing fuel prices and the stoppage of Hamaoka Nuclear Power Station Reactor No. 5 are expected to increase our fuel costs.
  As a result, consolidated ordinary income and consolidated net income are both expected to decline, to 95 billion yen and 57 billion yen respectively.
• • Turning now to the outlook for non-consolidated cashflows, we forecast that sales will be about 2.50 trillion yen, ordinary income about 85 billion yen, and net income about 52 billion yen.
  As a result, we anticipate that both the consolidated and non-consolidated financial statements will show declining revenue and profit.
• • The consolidated and nonconsolidated profit and loss statements have not changed since the performance estimates revision of July 11.
• • Chubu Electric will continue to work for a stable power supply with safety as the highest consideration and to pursue cost savings as well as greater streamlining and efficiency throughout management.

2. This summer's electric power supply and demand situation

• • Next I'll talk about this summer's electric power supply and demand situation.
• • This year's rainy season has brought record rainfall to Japan. Finally the Tokai area is nearing the end of the rainy season and we are heading into the real summer season.
  Chubu Electric's maximum output so far this summer was on July 14, which set a new record of 26,450,000 kW.
• • On the supply side, we have experienced problems at Hamaoka Nuclear Power Station Reactor No. 5, but we have been able to keep up a supply margin of about 8% by running Taketoyo Thermoelectric Power Station Nos. 3 and 4, which had been idle, and purchasing power from other companies.
• • Also, as we've announced earlier, on July 10 we activated an electricity supply and demand task force, which I am chairing.
• • Specifically, this task force establishes a clear command system with the chairman at its center and helps us deal more quickly with changes in electricity supply and demand.
• • We are expecting very hot weather to continue, but we have all the systems in place to ensure a steady supply of power to our customers.

3. Our participation in a Malaysian project to generate power from oil palm empty fruit bunch biomass

• • Finally, I'd like to tell you about Chubu Electric's overseas energy business.
• • During the five-year period through FY2010, Chubu Electric is getting more heavily involved in overseas energy projects, and we are being proactive in this area right now.
  This overseas energy business will be developed in two major directions: one is "power generation," which seeks to meet our goal of securing stable revenue over the long term, and the other direction is "environmental projects," which seek to secure both revenue and CO₂ emission rights.
• • Under the category of "environmental projects," we have recently decided to take part in Malaysian project to generate power from oil palm empty fruit bunch biomass.
• • Oil palm empty fruit bunches are what is left after the fruit, which is the raw material for oil, is removed.
  Ordinarily, most empty fruit bunches are disposed of as waste and ends up releasing the greenhouse gas methane to the atmosphere.
• • The project we are joining uses the empty fruit bunches as fuel. Two power stations, each with 10,000 kW of output, will be developed.
  This is expected to result in better environmental protection in the region and CO₂ emission rights for Chubu Electric.
• • The project has already received the approval of the United Nations CDM Executive Board as a Clean Development Mechanism (CDM) project and is forecast to earn CO₂ emission rights worth about two million tons.
• • With operations targeted to commence in March 2008, construction is set to begin very soon on one of the power stations.
• • Other projects in which Chubu Electric is using the Kyoto Mechanisms include investments in the World Bank Carbon Funds and Japan GHG Reduction Fund and involvement in a project to better the environment by generating power from rice husks in Thailand.
• • The long-term idling of Hamaoka Reactors No. 1 and 2 and other factors are making it very challenging to achieve our CO₂ reduction goal, that is, reducing Chubu Electric's FY2010 CO₂ emissions intensity by 20% from FY1990 levels.
  Even so, we will continue to pursue environment-related overseas energy projects to help us move closer to this target.

That is the end of my presentation. Thank you.