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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

June 12, 2009

Chubu Electric Power Co.,Inc.

Today I will be talking about two items:

  • Trends in electricity demand in the Chubu Region
  • The state of electricity supply and demand this summer.

     

Trends in electricity demand in the Chubu Region

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

     (Reference 1) Year-on-year rate of increase in amount of electric power sold, by high-volume industry sector (Final).  
  • The rate of growth in sales of electric power to large corporate customers, so-called "high-volume electric power," in April 2009 declined by 25.9% year-on-year, with April representing the ninth consecutive month of decline against the previous fiscal year.  
  • Figures for May are presently being compiled, but we expect that they will record a similar year-on-year decline to April (-25.9%), making May the tenth consecutive month of decline against the previous fiscal year.  
  • We have not experienced a ten-consecutive-month decline in the rate of growth in sales of high-volume electric power since the 21-consecutive-month decline from November 1997 to July 1999 due to the effects of the Asian financial crisis.  
  • A double-figure decline in the rate of growth has continued since December, making this a very serious situation.  
  •  However, among other signs that we are witnessing an easing of the economic downturn, production indices for the mining and manufacturing sectors in the Chubu Region have recorded positive growth for two consecutive months since March, and the inventory indices for the same sectors have declined for three consecutive months, implying that inventory adjustment is underway.  
  • Although the situation with regard to sales of high-volume electric power remains severe, we have witnessed a slight reduction in the magnitude of the decline in the rate of growth since the figure of 33.7% recorded in February, and this seems to indicate that the rate of decline has leveled off.  
  •  I believe that these signs will manifest themselves even more clearly in future electricity demand.  
  • 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 industries, such as basic materials industries, and one that has a significant effect on these industries.
  • We are also seeing new trends in the Chubu region which herald future development, including the movement into the region of new industries such as nanotech-related and aeronautics industries, and the hosting of the tenth Conference of the Parties to the Convention on Biological Diversity, COP10, in 2010, and the work being conducted in preparation for that event.  
  • I personally feel that the Chubu Region has entered early on a path of recovery from the present extraordinary economic crisis, and I have high expectations that this, in combination with the new, forward-looking trends in the region, will see it once again leading Japan towards economic growth.  

The state of electricity supply and demand this summer.

  • I will now discuss the state of electricity supply and demand this summer.
  • Nagoya has experienced numerous cloudy days due to the effects of troughs of low pressure and moisture in the atmosphere, and the Nagoya Local Meteorological Observatory announced on June 9 that the Tokai Region had entered the rainy season.  
  • Our peak demand last year, recorded on August 5, was 28.21 million kW, a record figure for us. Due to the effects of the present recession, among other factors, we predict a peak demand of approximately 27.13 million kW this fiscal year.  
  • On the supply front, operation of Hamaoka Nuclear Power Station Reactor Nos. 4 and 5 is presently suspended due to increases in the hydrogen concentration in their off-gas systems. Reactor No. 3 is also scheduled to be shut down for a periodic inspection on June 14, the day after tomorrow.
  • We are presently inspecting equipment and conducting a variety of tests in order to determine the cause of the increased hydrogen concentration in the off-gas systems of Reactor Nos. 4 and 5.
  • Up to the present, we have identified a number of factors that have resulted in a decline in catalyst performance. We are continuing our investigation into the causes of the increase in hydrogen concentration in Reactor Nos. 4 and 5, and are adopting countermeasures against a reoccurrence.  
  • At this stage, I cannot yet provide a schedule for the recommencement of operation of the reactors. However, we will spare no effort to ensure that, having fully identified the causes of these incidents, and having received the understanding of local residents, we are able to recommence operation by the beginning of the summer peak demand period, following the end of the rainy season.  
  •  If the shutdown of Reactor Nos. 4 and 5 was to be ongoing, we predict that the status of electricity supply this summer will become severe. With safety as our highest priority, we are seeking to recommence operation of the Hamaoka Nuclear Power Station as quickly as possible. In order to ensure that all possible measures are taken to achieve a stable supply of power, I today established an Electricity Supply Strategy Department, of which I will be the head.  
  • In order to respond to potential risk, the Electricity Supply Strategy Department will be instructed to conduct repairs and adjustments of thermal power plants and to restart thermal power plants that had previously been taken out of operation. In addition, the department has been instructed to thoroughly review procedures for intensive and detailed inspection of important facilities, measures for conserving electricity at our places of business, and other essential measures.  
  • Chubu Electric will proceed through the course of this summer sparing no effort to ensure a stable supply of electricity.


That concludes my remarks for today.