Key Point of President's Regular Press Conference

Key Point of President's Regular Press Conference

Regular Press Conference for March 2010

March 24, 2010
Chubu Electric Power Co.,Inc.

Today, I will be discussing two items:

  • Key points of Chubu Electric's Operating Objectives for FY2010
  • Summary of FY2010 Electric Power Supply Plan

Key points of Chubu Electric's Operating Objectives for FY2010

  • First, I would like to talk about our "Operating Objectives" for FY2010.
    If you could, please look at Reference 1.
  • Chubu Electric's "Operating Objectives" include the group's "Enterprise Group Image Goals" and "Management Objectives," as well as "Specific Efforts" and other approaches that we are taking to achieve these. Each year we announce these aims to the broader community.
  • I'd like to give you a brief overview of our efforts.

(Enterprise Group Image Goal)

  • First, Chubu Electric's "Enterprise Group Image Goal" is still to be "a multi-energy services group based in the Chubu Region. As such, it seeks to protect the global environment while achieving sustainable growth."

(Basic Policy on Sales Target and Allocation of Operating Cash Flow)

  • Next, I would like to look at our Basic Policy on Sales Targets and our Basic Policy on Allocation of Operating Cash Flow. First, we have established "Electric Power Sales Targets" to be reached by the end of FY2010, as follows:
    - In the residential sector, "Increase the number of all-electric homes to over 600,000"
    - In the commercial and industrial sectors, "Create 800,000 kW of demand by promoting the use of electricity for kitchens, air conditioning, etc." We are actively promoting sales activities towards the achievement of these targets.
  • As of the end of February 2010, all-electric contracts have reached a cumulative total of about 525,000 homes, and promotion of electricity use has created new demand of about 629,000 kW.
  • Next, looking at our "Sales target for gas, LNG, and on-site energy businesses," we are working to expand these areas of business, with a target of achieving total sales for the three areas of ¥45 billion by the end of FY2010.
  • As of the end of FY2009, we project that sales will have reached around 38 billion yen.
  • FY2010 is the final fiscal year for the achievement of these targets.
    The current business environment is a difficult one in which to achieve any of these targets.
    However, we are implementing sales activities aiming to achieve customer satisfaction. We are actively working in the household sector to provide environmentally friendly, comfortable, and continually evolving all-electric living, focusing in particular on customers considering home renovations, and in the business sector to provide solutions that are able to realize cost reductions and reductions in CO2 emissions.
  • Next, I would like to discuss our "Basic Policy on Allocation of Operating Cash Flow." We continue to firmly adhere to the basic principle that we have followed to date, which is to prioritize the use of resources for investments that are essential to providing a stable supply of electric power, and to provide our shareholders with steady dividends.
  • In addition to this, as strategic investments aimed at business growth and development, we are also conducting investments in energy businesses overseas and gas, LNG, and onsite energy services businesses in Japan.
  • In keeping with these policies, our capital investment in FY2010 and FY2011 will remain at a level of about ¥300 billion per fiscal year, as was the case in the FY2009 Plan, as we endeavor to operate our business stably over the long term.
  • In addition, separately from these capital investments, we have newly established the goal of investing a total of approximately ¥100 billion in overseas energy businesses by about 2015, and we will work towards the achievement of this goal.
  • We have designated the period through FY2010 for development of overseas energy industries, and we have been working in this area to secure new sources of revenue.
    As a result of these efforts, we are able to project steady revenues from already completed projects. Given this, we have now established a target for the scale of our investments, and we will continue to actively expand our business ventures in this area, making full use of the experience and expertise that we have developed up to the present.
  • Specifically, while maintaining close attention to business efficiency and risk management, we will be seeking to engage in superior projects in the areas of power generation business, in particular high-efficiency gas thermal generation, and environment-related business, with a focus on Asia, North America, and the Middle East, regions in which we already have experience in project participation.
  • Through our overseas energy business, we are seeking not only to further expand our revenue base, but also to make an active contribution to the societies in which we are investing and to the protection of the global environment.

(Four Management Pillars/Specific Efforts)

  • The "Specific Efforts" the Chubu Electric Group will continue to undertake are the "Four Management Pillars" shown here:
    - Sales Efforts Geared Toward Customer Satisfaction
    - Stable Generation and Reliable Supply of Affordable, High-Quality Energy
    - Fulfilling our Corporate Social Responsibility (CSR) Through Protecting the Global Environment and Other Means
    - Strengthening our Business Foundation to Enhance Corporate Value
    We will continue to advance steadily on the basis of these specific efforts.


Summary of FY2010 Electric Power Supply Plan

  • Next, allow me to tell you about our Electric Power Supply Plan.
  • The three main points of our Electric Power Supply Plan are:
    - Ensuring a stable supply of electric power
    - Taking proactive initiatives to protect the global environment
    - Promoting greater efficiency in order to overcome competition
    Today, Chubu Electric filed its Electric Power Supply Plan, centering on these three points, with the Ministry of Economy, Trade and Industry.
    If you could please look at Reference 2.

(Projected demand)

  • First, I will discuss our projected demand. Please refer to Table 1 in Reference 2.
  • We estimate that the amount of electric energy sold in FY2019, the final year of the current plan, will be 140.2 billion kWh, with average annual growth of 0.7% from FY2008 to FY2019, after correction for temperatures.
  • Peak load is expected to reach 27.35 million kW in FY2019, with average annual growth of 0.2% from FY2008 to FY2019, after correction for temperatures.

(Power Sources)

  • To continue, I will discuss our Power Generation Facilities Plan. Please refer to Table 2 in Reference 2.
  • The development of electric power sources requires a good balance of different power sources as well as consideration for efficiency, supply stability and protection of the global environment.
  • In the area of nuclear power, we are steadily moving ahead with our nuclear power plans with safety as our highest priority, continuing stable operation of the Hamaoka Nuclear Power Station and working towards the commencement of operation of Hamaoka Reactor No. 6 between 2018 and 2023.
  • We are also steadily moving forwards with the development of the LNG-fired high-efficiency combined cycle Joetsu Thermal Power Station.
  • In addition, as part of our efforts to protect the global environment and promote renewable energies, we are planning to conduct development in the areas of solar generation (including the recently announced Mega Solar Iida), wind and biomass generation, and small-scale hydroelectric generation.
  • The plan for the construction in FY2012 of 13 wind power turbines each with an output of 2,000 kW, in an area stretching from Toyohashi City in Aichi Prefecture to Kosai City in Shizuoka Prefecture, is not at present expected to win the approval of local residents, and has therefore been suspended and dropped from our supply plan.

(Supply and Demand)

  • As shown in Table 3 on the upper right of Reference 2, through FY2019, the final year of the current plan, Chubu Electric expects to have an appropriate spare capacity of 8 to 10%, and thus to be able to provide a stable supply of electric power.

(Distribution Facilities)

  • Next, I would like to mention our plans for distribution facilities.
    If you could please look at Reference 3.
  • In the area of distribution facilities, we are striving to achieve greater efficiency through initiatives such as the introduction of new technologies and the achievement of further advances in safety equipment. At the same time, we are working to ensure a stable supply of power, formulating systematic facility design plans that include the Joetsu Thermal Power Line and the Sekigahara-Kitaoumi Line, which will be the secondary linkage line with the Kansai Electric Power Co., Inc.


  • Domestic economic conditions have displayed a significant decline. While we can presently see signs of a recovery, against the background of Japan's declining population, concerns remain over the future course of economic growth.
  • Turning our attention to the rest of the world, we can see that we are approaching a major historical turning point, for example with the competition for energy resources and subsequent price increases, and the introduction of environmental initiatives that seek large-scale reductions in greenhouse gas emissions.
  • Against this background, I only believe more firmly that even in an era of accelerating speed of change, our commitment to the cornerstones of our business - responding appropriately to the needs and expectations of our customers and contributing solidly to the development of our regional community - must never waver.
  • To that end, we have set ourselves numerous challenges to achieve, including:  
    - With a firm focus on the foundations of our business, to develop a new perspective enabling us to achieve greater productivity and to supply low-cost electricity at a higher level of quality  
    - To supply energy with a low environmental impact, by moving ahead with nuclear generation, increasing the efficiency of our use of fossil fuels, and expanding our use of new energies, including solar and wind power
  • As individuals involved in power provision and energy businesses, every member of the Chubu Electric Group will, in performing their daily work duties, continue to challenge themselves to stand in the customer's shoes and carefully consider what would be best for the customer, and on that basis to act and to make changes.
    It is my hope that, as a result, we will continue to be of service to our customers, irrespective of the changing times.

This concludes my remarks for today. Thank you.


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