Regular Press Conference for April 2011: President Mizuno’s Message

(Introduction)

• First, I would like to talk about our “Operating Objectives for FY2011” overview.
• These “Operating Objectives” summarize the directions the Chubu Electric Power Group wishes to take over the medium term as well as specific measures for achieving them, and it is our practice to publicize these objectives widely every year.

(Objectives Reflect the Great East Japan Earthquake)

• The damage caused by the Great East Japan Earthquake has had serious impacts all over eastern Japan. The disaster led to a major accident at the Fukushima Daiichi Nuclear Power Station of the Tokyo Electric Power Co., Inc. and created power shortages in eastern Japan so that even now it is having serious impacts on the people of Japan.
• As we have become more aware of the circumstances following the earthquake, Chubu Electric Power, as an electric utility, has been reminded of the heaviness of our role and responsibility to provide a “stable supply of electric power.”
• Chubu Electric Power intends to fully execute our public mission to provide a safe and stable supply of the “energy indispensable to life,” especially in the Chubu Region.
• Our recently established “Operating Objectives for FY2011” summarize medium-term measures in accordance with “Management Vision 2030,” which we established in February. These objectives put the highest priority on disaster countermeasures, including countermeasures to large-scale earthquakes.

(Our position on nuclear power)

• We are aware that the public is feeling more anxious about nuclear power following the major accident at Tokyo Electric Power Co., Inc.’s Fukushima Daiichi Nuclear Power Station during the recent major earthquake.
• Following the earthquake, Chubu Electric Power has also heard from many parties, including customers and members of the local community, with a variety of comments about our Hamaoka Nuclear Power Station. Some of these comments express anxiety or concern about the station.
  In many cases, these comments voice particular concern about earthquakes and tsunami.
• Chubu Electric Power has checked the safety of the Hamaoka Nuclear Power Station to earthquakes and tsunami.
• Additionally, we have taken a number of steps to strengthen disaster countermeasures and enhance power station safety, including:

• Measures to prevent tsunami from entering the station
• Measures anticipating tsunami entering the station
• Measures against emergency situations, such as power loss or equipment failure if a tsunami enters the station

• We pledge to continue listening sincerely to the comments of our customers and members of the local community. We are additionally working to collect information about the Fukushima Daiichi Nuclear Power Station accident. If we determine that new countermeasures are necessary, we will respond promptly and appropriately and put every effort into winning the understanding of the local community.
• In resource-poor Japan, we consider nuclear power to be an important and indispensable energy source for ensuring a stable supply of energy over the long term and solving global environmental problems. We furthermore intend to pursue nuclear power to ensure that we thoroughly fulfill our obligations as an electric utility, all the while earning the understanding of the community in which our station is located and more broadly from the citizens of Japan with safety as the highest priority.

(Medium-term policy directions)

• Our “Specific Efforts” are the four missions described in the “Management Vision 2030” established in February.

• Mission 1
  “Ensure stable supply of low-carbon, high-quality energy at reasonable prices.”
• Mission 2
  “Become the “top corporate group in energy services.”“
• Mission 3
  “Increase revenues through active overseas business deployment.”
• Mission 4
  “Establish a business base that ensures growth.”

Based on these four missions, we will continue steady initiatives to achieve our aim of being “a corporate group that satisfies all energy-related needs and keeps growing.”

(Postponement of target-setting)

• Up to now, Chubu Electric Power has been conducting studies in preparation for setting new management targets, but damage from the recent Great East Japan Earthquake has caused the external environment affecting our business to change greatly, and because it is difficult to predict the future with a certain degree of accuracy, we have decided to postpone setting financial and other management targets.

(Summary)

• The Chubu Electric Power Group will continue to fulfill our social responsibility as a good corporate citizen delivering “assurance,” and we will respond to the trust and expectations that our customers, members of the community, shareholders, investors, business partners and others have in us.

• Next, I would like to discuss the “appointments of personnel to our executive body.”
• I mentioned this previously when talking about our “Operating Objectives,” but we at Chubu Electric Power have been reminded of the importance of fulfilling our public mission to provide a safe and stable supply of the “energy indispensable to life” and to contribute to community development.
• To fulfill this public mission, the first thing we must do as our highest priority is work to ensure the safety of nuclear power.
• Additionally, in order to keep responding to the trust and expectations that our customers and community have in us, it is necessary to steadily fulfill the missions that were written to help us become the kind of company we wish to be.
• These points were taken into consideration as we appointed personnel under our management system this time. Along with this, we are changing the organization of our power generation department. The three key points are as below.
• The first point is that we will strengthen our organization so that nuclear power is operated even more safely and stably.
• In order to meet our highest priority of steadily ensuring nuclear power safety, we will make our system of responsibilities clearer and strengthen safety management under a more perfect system than before. Specifically, we are making the nuclear power department independent of the Power Generation Division and establishing a new Nuclear Power Division.
• We are appointing Director and Executive Vice President to head up the Nuclear Power Division.
• Within the Power Generation Division, we are also setting up a Thermal Power Department and a Civil Engineering and Construction Department, which will have jurisdiction over hydroelectric power stations, and Director and Executive Vice President will also be appointed as leaders of these units as we make every effort to ensure safe and stable operation of our thermal and hydroelectric power stations.
• The second point is that we will strengthen our business strategizing function.
• It is becoming increasingly difficult to foresee the business environment facing Chubu Electric Power at a time when, for example, there are questions about Japan’s energy policies, including nuclear power.
• At the same time, we must work steadily to become the ideal spelled out in the Chubu Electric Power Group Management Vision 2030: “a corporate group that satisfies all energy-related needs and keeps growing.”
• To enable us to respond promptly and strategically to these many issues, we have decided to strengthen our business strategizing function.
• Specifically, we have assigned a senior managing director from the board to serve as Deputy General Manager under the General Manager of Corporate Planning & Strategy Division and deal appropriately with the wide range of management issues.
• The third point is that we are making sure to appoint the right person to the right position so we can solve these issues, and in particular we are choosing young people.
• It is worth repeating that Chubu Electric Power faces a more severe business environment than before.
• To help us overcome these challenges and grow and develop into the future, we intend to make appropriate assignments of human resources who have thorough, practical knowledge of their individual fields and show leadership, strategic thinking and the ability to act.
• Additionally, like last year, we are appointing numerous young people capable of acting strategically to serve as department and branch office directors.
• Compared to last year, we have greatly increased the scale of personnel transfers, but in all cases we are assigning people who are ready to act immediately in what we consider an optimal management system.
• This is also my second year to serve as President, and I understand this is truly a critical moment for us.
• The new management team members will work together to solve the various issues facing us, and we look forward to everyone’s cooperation in this endeavor.

• Finally, I’d like to talk about the succession of our real estate leasing business by company spin-off. You can see more information in the material entitled “Succession of Real Estate Leasing Business by Company Spin-Off.”
• Chubu Electric Power and Chuden Real Estate Co., Inc. decided today to transfer part of Chubu Electric Power’s real estate leasing business to Chuden Real Estate by way of company spin-off. The absorption-type split is scheduled to take place July 1.
• Our aims in consolidating the Chubu Electric Power Group’s real estate leasing business at Chuden Real Estate include increased work efficiency. Let me note that this move will have only a slight effect on the Group’s consolidated results.
• That concludes my remarks for today.