Receipt of Cease and Desist Order, Surcharge Payment Order, etc. from JFTC for City Gas Supply to Large Volume Customers in Chubu Area

Chubu Electric Power Co., Inc. (President and Representative Director: Kingo Hayashi, "Chubu Electric Power") and Chubu Electric Power Miraiz Co., Inc. (President: Shinya Otani, "Miraiz") were subjected to on-site inspections by the Japan Fair Trade Commission ("JFTC") on April 13, 2021 and October 5, 2021 for alleged violation of the Antimonopoly Act (unreasonable restraint of trade), and have since been fully cooperating with the JFTC's investigation.

Chubu Electric Power received a surcharge payment order, and Miraiz received a cease and desist order and surcharge payment order, respectively under the Antimonopoly Act from JFTC today in connection with the city gas supply to large-volume customers in the Chubu area.
Also, Miraiz received a warning concerning the city gas supply for residential use in the Chubu area, and Miraiz and its subsidiary, Cenergy Co. (President: Minoru Yasui, "Cenergy") received a warning concerning the supply of liquefied natural gas in Aichi, Gifu, and Mie prefectures respectively from JFTC.

We sincerely apologize to our customers, shareholders, local residents, business partners, and other stakeholders for any inconvenience or concern this may cause.
We will make further efforts to ensure compliance in order to avoid such orders and warnings in the future.

1. Cease and Desist Order and Surcharge Payment Order

(1) Overview of the cease-and-desist order

A. Subject company

Chubu Electric Power Miraiz

B. Summary of Order

Chubu Electric Power (now Miraiz) and Toho Gas Co., Ltd. jointly determined the prospective contractor to receive orders for specified large-volume city gas and, by allowing the contractor to receive orders, effectively restricted competition in the specified large-volume city gas trading field, contrary to the public interest. Since this action constitutes an unreasonable restraint of trade as defined in Article 2, Paragraph 6 of the Antimonopoly Act and violates the provisions of Article 3 of the same Act, the companies were ordered to take necessary measures to prevent similar actions from being taken in the future.

(2) Overview of the surcharge payment order

As a result of an application for the surcharge payment reduction and exemption system to the Japan Fair Trade Commission, a 30% reduction of the payment has been approved.

(3) Impact on business performance

Based on the draft surcharge payment order received on December 20, 2023, a provision for allowance for losses related to the Antimonopoly Act was recorded as an extraordinary loss in the third quarter of the fiscal year ending March 31, 2024, and the full-year earnings forecast remains unchanged.

2. Summary of Warning

Miraiz is warned that it may violate the provisions of Article 3 of the Antimonopoly Act in connection with the supply of city gas for residential use in the Chubu area and the purchase of electricity under the feed-in tariff system for renewable energy sources after the expiration of the buyback period, and that it will not engage in such activities in the future.
Miraiz and its subsidiary, Cenergy, are also warned not to engage in such activities in the future with respect to the supply of liquefied natural gas in Aichi, Gifu and Mie prefectures, as they may violate the provisions of Article 3 of the Antimonopoly Law.