June 2012 Federation of Electric Power Companies of Japan Press Conference with Chubu Electric Executive Vice President Tomohiko Ohno

• First, I would like to talk about the electric power supply and demand outlook for the Chubu Electric Power service area this summer.
• As you are aware, Chubu Electric Power reported this summer’s supply and demand outlook on April 23 at the request of the Ministry of Economy, Trade and Industry. The content of our report was verified by the national government’s Supply and Demand Verification Committee before being reported to and confirmed by the Energy and Environment Council on May 14.
• I would like once again to discuss the details of Chubu Electric’s energy supply and demand outlook for this summer, which has been verified by the Energy and Environment Council.
• Please refer to the left-hand side of Attachment 1-1.
• First, I will discuss one-time peak load for this summer.
• Attempting to reduce maximum power demand, even if only by a small amount, Chubu Electric has:  

• Requested corporate customers to newly subscribe to summer holiday contracts;

and

• Requested customers with private generating equipment to increase their power output.  

• In subscribing to a summer holiday contract, corporate customers agree to shift days off from weekends to weekdays.
  This summer, we have been conducting visits to individual customers, seeking to reduce peak power usage by means of these contracts by 400 MW, a 40 MW increase against the contracted figure of 360 MW for last fiscal year (FY2011). We believe that with the understanding and assistance of our customers, we will be able to achieve this target.
• We have also made requests to customers with private generating equipment to increase their output, our target here being a 20 MW increase on the 80 MW contracted amount for last fiscal year (FY2011), taking us to 100 MW. This also appears to be achievable.
• Taking these demand-side measures together with the amount represented by the energy-saving measures that have become established in companies and households since last year, we project a one-time peak load for August of 26.48 GW, assuming high temperatures similar to those recorded in summer 2010.
• Turning to our supply capacity, we will:

• Commence commercial operation of Joetsu Thermal Power Station Unit 1-1 (Output: 595 MW) in early July;

and

• Continue operation of Taketoyo Thermal Power Station Unit No. 2 and other thermal power units under long-term planned shutdown.

• In addition, with government approval, we will postpone the periodic inspection of Kawagoe Thermal Power Station Unit No. 3-3 and other units beyond the legally prescribed deadline, meaning that all of the periodic inspections of thermal power stations scheduled for August will be postponed.  

These measures have increased the amount of power we are able to supply to 28.75 GW.

• In addition to this, we have decided to transmit power ‒ around 1 GW during the period of peak demand between 1:00 and 4:00 PM and around 2.3 GW during other periods ‒ to regional power companies forecasting a supply capacity shortfall. Maintaining stable supply in our own service area will of course be a prerequisite for this transmission of power.
• Therefore, our supply capacity to the Chubu Electric Power service area, including an emergency increase of 100 MW in thermal power output, will be 27.85 GW. This is equivalent to a reserve ratio of 5.2%.
• 8-10% is generally indicated as an adequate reserve ratio. This is the ratio with the maximum power three-day average. If we substitute the average for the maximum power three-day average (25.67 GW) for the one-time peak load that I discussed previously (26.48 GW), our reserve ratio is 8.1%, a level at which a stable supply of power can be ensured.

• Next, I’d like to talk about energy conservation in the Chubu Electric Power service area.
• Please refer to the right-hand side of Attachment 1-1.
• As you are aware, on May 18 the government requested customers in Chubu Electric’s service area to make efforts to conserve energy this summer.
• While no specific numerical targets have been indicated, the government has requested people throughout the country to conserve power between 9:00 AM and 8:00 PM on weekdays from July 2 (Mon.) to September 28 (Fri.). In the Chubu Electric service area, customers have been asked to reduce the maximum power use recorded in summer the year before last (2010) by a further 5% between 9:00 AM and 8:00 PM on weekdays from July 2 (Mon.) to September 7 (Fri.), excepting the period of the Obon holidays, from August 13 to 15.
• Based on this request from the government, on May 18 we asked our customers to make similar efforts to last year’s in conserving energy, in particular between the hours of 1:00 and 4:00 PM on weekdays, when power demand is particularly high.
• We regret the inconvenience that will be caused, but I would like to take this opportunity to once again request the cooperation of our customers in conserving energy.
• I will now explain our rationale for indicating that we will be able to meet the power-saving target suggested by the government if our customers cooperate in saving energy to the same extent as they did last year.
• Please refer to Figure 2.
• The energy conservation target indicated by the government, a 5% reduction against the 2010 figure, corresponds to a reduction of 1.35 GW against demand for 2010.
• However, the figure for maximum power demand in our service area this summer has already taken into consideration factors including new subscriptions to summer holiday contracts and increased output from private generation facilities, reducing it by around 370 MW against the figure for 2010.
• Because of this, the extra energy saving necessary to the achievement of the target is 1.35 GW minus 370 MW, or 980 MW.
• This is basically equivalent to the figure of 1 GW achieved by the energy conservation efforts of our customers last summer.
• The government’s suggested energy conservation target of a reduction of 5% against 2010 figures is therefore achievable with the same level of cooperation from our customers in saving power as was displayed in summer last year, when each of the customers in our service area worked to save power during particularly tight supply and demand conditions.
• A lot of people have been conserving energy since last year, for example by replacing light globes with LED lights. Efforts of this type will automatically have an energy-saving effect this summer.
• We estimate that these already established measures represent energy savings of around 600 MW. What we are asking now is for people to make an extra effort in order to realize a further saving of 380 MW, shown as the yellow section of the middle bar graph in Figure 2.
• Because power demand in summer is particularly high between 1:00 and 4:00 PM on weekdays, we will particularly request cooperation between these hours.
• Please refer to “2(3) Provision of information concerning status of supply and demand, energy conservation methods, etc.” in the lower right of Attachment 1-1.
• From late June, we will be providing information on the daily status of supply and demand on our homepage.
• We will also inform customers of effective methods of energy conservation and request their cooperation in conserving energy using a variety of methods, including television and radio commercials, the distribution of leaflets when meters are read, and direct mail to corporate customers.

• To conclude today’s press conference, I would like to discuss one of Chubu Electric’s future initiatives.
• Please refer to Attachment 1-2.
• Since the year before last (2010), the Ministry of Economy, Trade and Industry has been conducting a program entitled Demonstration of Next-Generation Energy and Social Systems, which seeks to build smart communities in four areas of the country (*), including Toyota City in Aichi Prefecture.

(*) The four areas in which the Demonstration of Next-Generation Energy and Social Systems is being conducted:
Toyota City, Aichi Prefecture; Yokohama City, Kanagawa Prefecture; Keihanna Science City (Kyoto); and Kitakyushu City, Fukuoka Prefecture

• As part of these demonstrations, Chubu Electric is conducting proving trials involving a maximum of 160 households in Toyota City and the surrounding area, aiming to effectively reduce customers’ power use or encourage them to change their periods of peak use in response to demand in the service area.
• In concrete terms, the customers involved in the trial will be provided with a mock-up of a power fee menu on which power fees increase in periods in which tight supply can be envisaged, for example from 1:00 to 4:00 PM during the summer.
• This power fee menu and the previous day’s power usage data for each period of the day will be displayed on tablet terminals that will be distributed to each household.
• We will record data concerning the customers’ power use on our server system, enabling us to study changes in their power use, the acceptability of the mechanism, and other parameters.
• Chubu Electric Power will continue into the future to conduct a variety of studies aimed at enabling our customers to make effective use of power.

• This summer, the state of power supply and demand is predicted to be even more severe than last year, in particular in west Japan.
• Chubu Electric Power will spare no effort in ensuring a stable supply of power in its service area by continuing focused inspection and maintenance of its generation and transmission facilities.
• At the same time, with the cooperation of our customers in conserving power, we wish to make the greatest possible contribution to maintaining a stable supply in regions predicting a shortfall by transmitting power to supplement supply.
• That is all for me today.