Chubu Electric Power Co.,Inc. | October 2016 Federation of Electric Power Companies of Japan Press Conference with President Katsuno - Press Releases and Other Company News(2016)
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Press Releases and Other Company News October 2016 Federation of Electric Power Companies of Japan Press Conference with President Katsuno

October 21, 2016

Chubu Electric Power Co.,Inc.

  • Today I would like to talk about Chubu Electric Power’s electricity and gas sales strategy.
  • We at Chubu Electric Power are regarding the drastic change in the business environment, prompted by the electric power and gas system reform, as an opportunity for us. We plan to expand our business domain and profitability by setting the following as our three sales strategy pillars, and prevail in the severe competition accordingly:
    1. New services for customers in the Chubu area
    2. Business expansion in the Tokyo metropolitan area
    3. Entry into gas sales for household use (gas & power)

Sales target

  • I’d like to begin from electric power sales.
  • The Chubu area is home to 6,000,000 customers. We at Chubu Electric Power will strive to continue serving as a top-choice utility for many of them.
  • For areas outside Chubu,
    • Attracting 100,000 customers in the Tokyo metropolitan area as early as possible; and
    • Reaching a 20,000,000,000 kWh/year electricity sales in 2030 mainly by Tokyo metropolitan area customers

    These are our short-term and long-term goals, respectively.

  • Meanwhile, in regards to household gas sales to which we are entering from next April, we are looking to attract 200,000 customers by the end of fiscal 2021 within Toho Gas Co., Ltd.’s supply area.
  • Our goal for 2030 is to make our total gas/LNG sales within and outside Chubu area reach an annual 3,000,000 tons.

Initiatives in the Chubu area

  • I next would like to separately talk about our electric power sales initiatives in the Chubu and Tokyo metropolitan areas.
  • As for the Chubu area, we are working to offer new services based on the concepts of “New Value,” “region,” and “helpful,” with low-cost and stable electricity supply to customers serving as a premise. The intent of this effort is to remain as a top-choice utility for the area’s customers, who have supported the development of our company.
  • I now would like to share the Chubu area rate menu we introduced this April.
  • Along with a menu based on the customer’s consumed electricity quantity, we can provide eight rate plans that reflect customer needs. Examples include:
    • Menus combining electricity rates with services instrumental in business or life
    • Menus that match the lifestyles of customers
  • Various household-oriented services are being rolled out through KatEne, our web member service.
  • This web service enables members to accumulate points through questionnaires or website views. Members can then use the points to pay electricity bills, or exchange the points for partner companies’ points.
  • Other services provided by KatEne include those instrumental in customers’ lives: For instance, shopping-related information of the Chubu area or reports with which customers can compare their electricity use with similarly-structured households.
  • Currently, 1,500,000 customers are registered to the service. With sights set to achieve a 2,000,000 membership during this fiscal year, we will offer services that cater to customer needs.
  • In regards to Chubu Electric Power’s partner companies, the number of firms collaborating with us has reached 50 thus far. Partners span a wide range of business categories, such as communications companies, financial institutions, and electrical appliance stores.

(Summary of Chubu area’s current conditions)

  • We are enjoying a positive response to the rate menu we introduced this April in the Chubu area. So far, the new menu succeeded in attracting nearly 960,000 applications.
  • In spite of this fact, we are assuming that many of the customers are still cautious, and that competition in Chubu would become fierce down the road.
  • We at Chubu Electric Power would like to continue our efforts to steadfastly identify customer needs and offer services with high added value, in turn outperforming others in the ever-intensifying competition by combining quality, price, and service.

Initiatives in the Tokyo metropolitan area

  • I next would like to talk about initiatives in the Tokyo metropolitan area.
  • By harnessing a series of routes, we are expanding our electric power sales operation for Tokyo metropolitan area households and small businesses. Examples include:
    • Direct marketing by Chubu Electric Power
    • Supply of wholesale electricity by Diamond Power Corporation
    • Through the agency/sales of partner companies
  • We obtained around 18,000 applications, mainly from household customers, within the Tokyo metropolitan area.
  • Diamond Power Corporation is a company serving a key role in our Tokyo metropolitan area sales strategy. In addition to supplying household/small business-oriented wholesale electricity to 12 city gas companies, Diamond Power also engages in the following:
    • Marketing commercial electric power, e.g. for office buildings/commercial facilities/schools
    • Supplying wholesale electricity to Cenergy, Chubu Electric Power Group’s subsidiary
  • The Tokyo metropolitan area market is sizable, and has a potential for high growth. Many operators are therefore selling electric power in the region, rendering competition there extremely severe.
  • Regarding the rate menu for the Tokyo metropolitan area we introduced this April, we set both the base and power rates lower than Tokyo Electric Power’s (TEPCO) meter-rate lighting contract this August. As a result, we changed the menu into one that enables customers to readily make comparisons and offers advantages to them regardless of the consumed electricity quantity.

(Summary of Tokyo metropolitan area)

  • I repeat again that the climate is tough in regards to electric power sales in the Tokyo metropolitan area.
  • The Chubu Electric Power Group will bring together all of its resources to secure 100,000 customers in this region at the earliest possible timing.

Deregulation of the gas retail market

  • I would like to move on to Chubu Electric Power’s gas sales initiatives.
  • Our gas sales started in 2001. Since then, we enjoyed a steady growth in the volume of factory-oriented sales; in FY2015 our gas sales reached 970,000 tons.
  • Meanwhile, regarding LNG procurement, we prepared an arrangement that allows for procuring LNG in an economical, flexible, and stable way. This was made possible by July 2016’s integration of the fuel procurement sectors of both Chubu Electric Power and TEPCO into JERA.
  • The full gas retail deregulation starting from next April is an excellent opportunity to expand our share within the gas market. We thus decided to make a foray into gas sales for household customers as well as such small businesses as restaurants, and accordingly applied last month to register for gas retail operations.
  • With a goal to gain 200,000 contracts in the next five years, our first step is to roll out operations for the approximately 2,300,000 Toho Gas service area customers in Aichi, Gifu, and Mie prefectures.
  • As a newcomer in the household-oriented gas sales domain, we will make efforts to step up sales and security, and live up to customers’ expectations by providing satisfying prices and services.
  • Gearing up for next April, we are now working out a low-cost, readily understandable gas rate menu. We will both announce this menu and start accepting applications next January.

Overall summary

  • As a leading total energy service corporation, Chubu Electric Power will, ahead of competitors, work to provide customers with better-than-expected services for both electric power and gas areas.