Chubu Electric Power Co.,Inc. | December 2019 Regular Press Conference : President Katsuno's Message - Key Point of President's Regular Press Conference (2019)

Key Point of President's Regular Press Conference (2019) December 2019 Regular Press Conference : President Katsuno's Message

December 24, 2019

Chubu Electric Power Co.,Inc.

  • Today, I’d like to talk about “Reflection on 2019 and Resolutions for Next Year.”
  • But first, let me talk about the Chubu Electric Power Group’s initiative for expanding the real estate business.

Initiative for expanding the real estate business

  • The Chubu Electric Power Group states, in its management vision, the goal is achieving at least 250 billion yen in consolidated ordinary income by the late 2020s. Of the target figure, about 20 billion yen is to be generated by affiliates.
  • Among business categories handled by affiliates, the real estate business, in particular, is expected to evolve into a main pillar of our business revenues in the future, as it can expand our revenues by utilizing lands owned by the Chubu Electric Power Group and also contributes to the energy business and our commitment to providing a new form of community.
  • This is why we have decided to accelerate capital and business partnership between ES-CON Japan and Chuden Real Estate, signed in August last year, to “boost the operating income of the partnership by 1.5 times by FY2022,” a new target added to actualize the management vision.
  • At present, Chuden Real Estate’s sales foundation is brought together with ES-CON Japan’s know-how on property development and administration to establish a structure that generates synergy. In fact, the two companies have today announced joint development of a condominium complex in the City of Nagoya.
  • In the future, we plan to incorporate our community support infrastructure services into shopping malls, medical or childcare facilities and other complexes handled under the partnership. Through this initiative, we will promote Chubu Electric Power’s unique community development that provides a sense of security and comfort to local residents, thereby solving social issues and achieving revenue expansion at the same time.

Reflection on 2019

  • Now, let me reflect upon the year that has just passed.
  • This year was no exception in that numerous natural disasters causing power outages, strongly highlighting the fact that “electricity is one of the most important infrastructures that support people’s living and economic activities.”
  • With some linking the increase in the number and intensity of natural disasters to global warming, there is a heightened need for carbon reduction and increased risks on fuel procurement, including geopolitical risks.
  • In view of these circumstances, 2019 was the year when we renewed our awareness about the importance of the so-called “S+3E” initiative, i.e. an initiative for achieving energy security, economic efficiency and environmental compatibility at the same time on the grand premise of ensuring safety.
  • At the same time, this was also a year that reminded us that compliance must be at the foundation of our business management, following a scandal in which Kansai Electric Power Company betrayed the trust of its stakeholders.
  • We have been making preparatory work on developing the corporate brand and organizational structure in a lead-up to the upcoming company split into a power transmission / distribution business and a retail electricity business in April next year. This year has made us renew our recognition that “S+3E” and “compliance” form universal business foundations the Chubu Electric Power Group must continue to work on even after the split.
  • Now, let me look back on 2019 in more detail with a focus on the following three points:
  • Resilience reinforcement
  • Carbon reduction
  • Provision of a new form of community
  • First, about our efforts to reinforce resilience…
  • Following Typhoon No. 21 (Jebi) and Typhoon No. 24 (Trami) of 2018, the Chubu region was once again struck by the powerful Typhoon No. 19 (Hagibis) in 2019, which brought record-breaking rainstorms across Nagano and leaving some 140,000 households without power.
  • After last year’s typhoons, we have drawn up an action plan for typhoon preparedness. It had a certain level of effects, in terms of identifying the extent of damage and progress of power restoration at an early stage and disseminating outage information on social media.
  • We are currently verifying the action plan, identifying new tasks and exploring how to address those tasks. The findings of the government’s “Working Group on Electricity Resilience” are also reflected to our efforts to further reinforce our electric services.
  • Next, with regard to our initiative for carbon reduction…
  • Building a low-carbon society has become an urgent task even on the global scale. To this end, we believe it is essential to expand the use of renewable energy and make full use of the Hamaoka Nuclear Power Station at the same time, while improving its safety.
  • We have made about 10% progress toward the goal of “developing new renewable energy facilities with the capacity of at least 2GW by 2030” when the new mega solar power plant called “Miyako Kuzakai Solar Park” in Iwate Prefecture went operational in May. We will continue to accelerate our initiative to maximize the use of zero-emission power sources.
  • The Hamaoka Nuclear Power Station is currently receiving a review on its compliance with the New Regulatory Requirements. Once the “design-basis seismic ground motion” and “design-basis tsunami” are confirmed, we will be able to explain to local residents the necessity of nuclear energy and its high level of safety.
  • We will continue to ensure compliance with the New Regulatory Requirements and further enhance the establishment of and training for emergency preparedness so as to boost Hamaoka’s safety in terms of both hardware and software and provide a detailed explanation to local communities.
  • Next, about our efforts to provide a new form of community…
  • We are promoting an initiative, under the keywords of “digitization,” “customer-orientation” and “carbon reduction,” to evolve existing energy infrastructures into “community support infrastructures.”
  • In April, we set up the Business Creation Division as well as an internal fund for investing in venture businesses in an effort to actively promote collaboration with various companies.
  • In November, in a strategic development to invest in high-growth areas, Chubu Electric Power and Mitsubishi Corporation were chosen as the preferred buyers in a bid for the Dutch Energy Company “Eneco.”
  • Chubu Electric Power’s accumulated insight into the energy business and new service know-how for community-support infrastructures will be combined with the expertise of Eneco to boost its corporate value.
  • As for sales, amidst intensifying competition in retail electricity, Chubu Electric Power has introduced services such as Mimamori (tagging for children and the elderly) and indoor environment quality to meet the target of “selling combined electricity – gas service packages to 100,000 households by the end of FY2020.”
  • We will continue to offer a wide range of services to not only sell electricity, gas and other energies but also provide comprehensive service packages that “enrich customers’ living.”
  • Now, let me share our resolutions for the next year.
  • In April next year, Chubu Electric Power will completely shift into a new business model that separates a power transmission / distribution business, to be handled by Chubu Electric Power Grid, from a retail electricity business, to be run by Chubu Electric Miraiz.
  • It will be a major turning point that can be described as the “second business foundation.” The two companies will share the Group-wide business foundation of “S+3E” and “compliance,” while promoting their respective businesses autonomously to respond to the trust and expectations of our customers.
  • The Group will operate with a combination of commitments to “stable supply,” to be achieved by a solid partnership between the two companies, and “value creation” by way of providing a “new form of community.” This way, we will strive to grow into a corporate group of even greater robustness.
  • Under the new corporate slogan of “Musubu (= Connect) Hiraku (= Open),” I will take the lead in ensuring that Chubu Electric Power will connect various communities together to open new potential and a new future.
  • This ends my presentation.

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