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Press Releases and Other Company News Summary of Remarks at Press Conference held by the Federation of Electric Power Companies of Japan and Toshio Mita, President of Chubu Electric Power Co.,Inc

July 18, 2008

Chubu Electric Power Co.,Inc.

Today, I will be discussing

-Trends in electricity demand in the Chubu Region and

-The state of electricity supply and demand this summer.

 

I will begin by considering trends in electricity demand in the Chubu Region.  

 

In the period from January to May this year, the total amount of electricity purchased by large corporate customers increased by 4.1% against the same period last year. Sales have continued to grow steadily, with results for May recording a 3.2% year-on-year increase, the 34th consecutive month of growth.

 

The manufacturing industry is strong in the Chubu Region, and one of the distinctive characteristics of the region is that the production of machinery represents approximately 40% of regional manufacturing.

 

This category includes a variety of products, including automotive-related products and liquid crystals and semiconductors for digital home electronic goods. The manufacture of such products is an industry that involves a broad range of other industries, such as basic materials industries, and one that has a significant effect on these industries.

 

The production of machinery drives industry in the Chubu Region. In the period from January to May this year, electricity sales to the machinery industry recorded an overall year-on-year increase of 6.7%, and this contributed to the increase in the total amount of electricity purchased by large corporate customers.

 

Preliminary figures for June, which have not yet been analyzed in detail, show a 0.4% decrease in electricity sales to large corporate customers against the same period last year. Despite this, a 1.3% year-on-year increase was recorded in electricity sales to the machinery industry.

 

Electricity sales to large corporate customers vary with the operation of generators possessed by the customer.
We therefore believe that it will be necessary to observe conditions for a longer period in order to determine the degree to which results have been affected by economic conditions.

 

However, it is clear that the Chubu Region has also been affected by spiraling materials costs and other factors, and there has been a distinct increase in concern over the economic future.
I myself intend to pay even closer attention to trends in economic conditions in the future.

 

I will go discuss the state of electricity supply and demand this summer.

 

While the rainy season is almost over, humid days continue in Nagoya, and residents are looking forward to the arrival of summer proper.

 

We predict that the peak demand on Chubu Electric this summer will be approximately 27.86 million kW. As of yesterday, July 17, we had recorded a total demand of 26.68 million kW.

 

On the supply front, operation of LNG-fueled Unit 8-3 of the Shin-Nagoya Thermal Power Station Group No. 8 commenced on July 15.

 

The total output of Group No. 8 will be 1.5344 million kW. Since April this year, we have successively begun operation of three of the four units in this group, and we believe that it will make a significant contribution to our supply of electricity this summer.

 

Shin-Nagoya Group 8 displays a thermal efficiency of approximately 58%, the highest level in Japan, and thus will also benefit the environment.
We expect that with the operation of all four units, we will reduce our annual emissions of CO2 by approximately 1 million tons, corresponding to around 1.5% of annual emissions.   

 

In addition, while Reactors 1 and 2 at our Hamaoka Nuclear Power Station have been shut down for periodic inspections, Reactors 3-5 are scheduled for stable operation.

 

We expect to be able to ensure a reserve capacity of 11.7% for August, summer's hottest month, and believe that we will be able to maintain a stable supply of electricity to our customers throughout the summer.

 

Allow me to note that a 1°C increase in summer temperatures would increase demand on Chubu Electric by approximately 800,000 kW due to increased demand from cooling systems.

 

The Nagoya Meteorological Observatory predicts that temperatures in the Tokai Region this summer will be as high or higher than normal average temperatures.

 

Chubu Electric has prepared for unforeseen circumstances such as facility problems and has spared no effort in order to ensure a stable supply of electricity, and we are confident that we will proceed through the rest of the summer without incident.

 

That concludes my remarks for today.