Chubu Electric Power Co.,Inc. | Approval for electricity rates increase Media conference by the President - Press Releases and Other Company News(2014)
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Press Releases and Other Company News Approval for electricity rates increase Media conference by the President

April 18, 2014

Chubu Electric Power Co.,Inc.

  • Today I would like to talk about approval for electricity rates increase.
  • Chubu Electric Power applied with the Minister of Economy, Trade and Industry on October 29, 2013 to increase the electricity rates at an average of 4.95% to customers in the regulated sector. Upon review from the government, today we obtained an approval with the implementation scheduled for May 1, and the markup percentage at an average of 3.77%.
  • For customers in the deregulated sector, we have been inquiring electricity rate increases averaging 8.44% from this April. Based on the approval, however, we are revising the increase to an average of 7.21%.
  • We regret the inconvenience that the electricity rate increase is causing to our customers, and ask for their continued understanding.
  • The total shutdown of the Hamaoka Nuclear Power Station has increased our fuel cost for thermal power generation. This has seriously undermined our balance between earnings and expenses, forcing us into the extremely tough business condition of facing an imminent loss for the third consecutive business year. In the given circumstance, Chubu Electric Power filed for an increase in electricity rates in order to continue our most important mission; provide stable supply of electric power.
  • Our application for an electricity rate hike was made through the premise of implementing efficient management so as to minimize our customers’ financial burden as much as possible.
  • More specifically, the cost portion of electricity rates has been lowered through reducing the cost of labor with monthly wage review, cutting back on the procurement cost of tools, equipment and services by introducing greater competition, and reducing advertising spending, donations and industry association memberships.
  • While our request for increasing electricity rates has been granted this time, the approval has come with a strict instruction to further improve on efficiency, and reflect the outcome to the cost portion of the electricity rates, in addition to maintaining maximizing the efficiency of management already outlined in the application.
  • Respecting the instruction with sincerity, Chubu Electric Power will make company-wide efforts to keep striving for further efficiency, with no areas exempt from these efforts, and reflect the outcome to our future business management.
  • Many customers have pointed out our “lack of customer communication” and asked whether there could be any ways of suppressing the increase of customer burden.
  • Chubu Electric Power accepts these opinions and suggestions sincerely, as we renew our determination to take every opportunity to inform our customers about the newly approved electricity rates and subscription system carefully in plain language. We will also work on initiatives for providing useful information to our customers, such as how to use electricity more efficiently.
  • Let us reiterate our sincere apologies for our decision, based on the extreme business conditions we are placed in, to raise electricity rates, and cause an inconvenience to our customers. We ask customers for their continued understanding.
  • Chubu Electric Power will continue to work on thoroughly improving the efficiency of management, and contributing to community development through stable supply of electricity.
  • Finally, let us inform you of additional cuts in directors’ remunerations.
  • In view of the additional burden on our customers through a hike in electricity rates, and tough business conditions our company is in, Chubu Electric Power has decided to introduce additional cuts to directors’ remunerations.
  • Since October 2013, Chubu Electric Power has reduced annual remunerations for the Chairman and the President by 40% and for internal directors by 30% on average.
  • The scale of the cuts is to be expanded to 70% for the Chairman and the President, and the average of around 60% for internal directors.
  • The cuts take effect in April 2014 and remain effective for the time being.
  • This concludes my remarks for today.