October 2015 Regular Press Conference : President Katsuno's Message

(Summary of financial results)

• Our consolidated sales recorded 1,481.8 billion yen; a 44.2 billion yen decline on a year-on-year basis. This was a result of factors including reduced lighting power charges, caused by a decline of fuel adjustment costs in the electricity business, together with diminishing energy service sales in other businesses.
• The consolidated ordinary income marked 210.4 billion yen, which is a 171.9 billion yen rise year on year. This owes to the different-timing margin of fuel adjustment and fuel costs accompanied with the drop of fuel prices, along with reduced thermal power fuel costs following a boost in hydropower generation within the electricity business.nbsp;
• Turning to our non-consolidated financial results, sales decreased 52.6 billion yen year on year to 1,385.1 billion yen. The operating income increased 156.4 billion yen year on year for a profit of 220.2 billion yen; the ordinary income increased 171.8 billion yen year on year marking 202.6 billion yen; and the net income for the quarter increased 105.4 billion yen year on year, reaching 146.0 billion yen.

(Interim dividend)

• The interim dividend for this quarter has been set to 10 yen per share.

(Earnings outlook for FY2015)

• Regarding the earnings outlook for FY2015, the forecasted earnings values announced on July 31 have been corrected to reflect the latest performance trends.
• We expect a consolidated sales of 2,890 billion yen, an increase of around 30 billion yen from the previous announcement, due to an increase in fuel adjustment costs and other factors.
• In terms of the consolidated ordinary income, with the developing different-timing margin of fuel adjustment and fuel costs accompanying fuel price reductions, as well as reduced thermal power fuel costs following a boost in hydropower generation, we are expecting to see 200 billion yen; a 70 billion yen increase from our previous announcement.

(Conclusion)

• Chubu Electric Power will maintain company-wide efforts to streamline our management, and work to meet the expectations and trust of customers and society.

(Galloping-induced accident)

• With the 275,000 V Shinano-Toshin extra-high voltage transmission line stopping on March 2 of this year, a wide area ranging from the northern, eastern, and central parts of Nagano prefecture experienced a power outage. We thus forced many customers to endure an inconvenience.
• As we have notified in March, Chubu Electric Power concluded that this power outage was a result of transmission lines coming close to or contacting each other by galloping, in which the lines make vertical movements.
• This phenomenon takes place when the transmission line is subject to a particular amount of wind while having snow or ice adhered in a particular direction. Under these conditions, the accreted snow or ice functions in a fashion comparable to airplane wings, thereby causing the lines to violently move up and down.
• In response to this event, Chubu Electric Power decided to re-evaluate the analyses for all conditions on weather or transmission equipment installations, and select the areas that require measures against galloping.

(Summary on countermeasures)

• In terms of specific countermeasures, as we announced on October 23 last week, Chubu Electric Power concluded that the Shinano-Toshin transmission line needs countermeasures at 18 spans including between the No.2-4 towers where the galloping occurred, and has initiated constructions.
• The two countermeasures we will be carrying out are:
  • Installing a loose spacer. By employing rotatable and fixed parts for the section that holds the transmission line, this device prevents the transmission line-accreted snow or ice from developing into a winglike form, and it also suppresses major vibrations by rendering the wind effect experienced by each transmission line uneven.
  • Installing a phase spacer, which limits the amplitude of transmission lines and prevents the lines from coming close to or contacting each other.

  All countermeasures implemented at the Shinano-Toshin transmission line is scheduled to complete by the end of November before the height of winter is upon us.

(Conclusion)

• The electric power industry is expected to undergo heightened competition as with the full retail deregulations, but our mission to provide safe, stable, and quality electric power to customers remain unchanged in any operating environment.
• Chubu Electric Power will continue its endeavor towards establishing an electric power network including substations or transmission systems that can withstand lightning, snow, and other natural disasters. At the same time, we will strive to reliably conduct such safety management as patrols or inspections, and thereby work to offer stable supplies.

(Start of transfer construction)

• Chubu Electric Power today started land preparation and other civil engineering works with sights set on installing Mega Solar Kawagoe.
• The construction of Mega Solar Kawagoe includes transferring the 7,500 kW output Mega Solar Taketoyo’s power generation equipment to the premises of Kawagoe Thermal Power Plant, in conjunction with the development of Taketoyo Thermal Power Plant Unit 5.
• June 2016 saw the start of transfers including Mega Solar Taketoyo’s solar panels and other power generation equipment. Operations are planned to begin from FY2017.
• Drawing on the results of Mega Solar Taketoyo, we are expecting an annual electricity output of 11.4 GWh. This is equivalent to the annual electricity consumption of 3,200 average households.
• With the understanding and cooperation from relevant parties and the local community, we will carry forward the construction while placing top priority on safety

(Chubu Electric Power Group’s renewable energy development efforts)

• Renewable energy has low carbon emissions, and is a valuable domestic energy source for Japan as a nation with a low energy self-sufficiency rate.
• In a drive to achieve a widespread use of renewable energy, Chubu Electric Power Group will continue its efforts to cut costs and engage in development in a proactive manner.

• A study group session was held today by the national government to discuss the supply and demand of electric power, and the meeting issued a numerical target-free energy conservation request for this winter again.
• We informed our supply and demand on October 9; thus I am not providing a detailed briefing at this conference. With regard to the supply reserve margin, we are expecting to ensure a reserve margin of 8%, which serves as an indication of stable supply, for the maximum power three-day average.
• For this winter’s power supply and demand, we are predicting that customers will maintain electricity demand savings at a 650 MW level.
• We ask customers to engage in their energy-saving efforts in a continued manner within reasonable bounds.