Regular Press Conference for November 2011

• First, I will explain the partial revision of our Peak Load Supply and Demand Plan for this winter with Attachment 1 of Reference 1 in the handout material.
• Please look at Table 1.
• Table 1 shows our Peak Load Supply and Demand Plan for this winter, as announced on October 4. As announced, we predicted that we would be able to achieve a reserve margin of approximately 7% by means of measures including adjusting the timing of periodic inspections of our thermal power stations and revising repair procedures for our hydroelectric power stations.
• Following that announcement, we conducted further studies, attempting to further increase our supply capacity.
• Please look at Table 2.
• As a result of these studies, we have changed the periods for periodic inspections at certain of our thermal facilities, including Shin-Nagoya Thermal Power Station. We project that this will enable us to increase our supply capacity by 50 MW in January, when we predict severe supply and demand conditions will occur.
• The situation with regard to our ability to purchase power from other utilities was unclear on October 4, and was therefore not included in our plan. However, we have now ascertained that we will be able to purchase extra power, enabling us to add a maximum of 110 MW to our supply capacity in January.
• As Table 3 shows, this will mean a maximum 0.7-point increase in our winter reserve margin in January against the figure announced on October 4, and this is expected to give us a supply capacity with a reserve margin just slightly below the figure of 8-10% that serves as a benchmark for stable supply.
• However, with regard to the supply and demand situation this winter, we cannot claim to be sufficiently prepared to ensure a stable supply of power, because:

• We will be supported by an increase in our supply capacity achieved through the cooperation of our customers in power-saving initiatives and our own emergency measures, and
• We have not been able to ensure a reserve margin of 8-10%.

• Chubu Electric Power will be making every effort to ensure a stable supply by faithfully conducting prioritized inspections and maintenance on power stations and transmission and substation facilities and other equipment.
• While sincerely regretting any associated inconvenience, we must once again request our customers for their understanding and their cooperation in attempting to conserve power in ways that will not restrict their daily lives or production activities.
• Please see Reference 1, Attachment 2. This is an image of the daily status of supply and demand, which we will be displaying on our website.
• From December 1 on our website, we will be providing our customers with information on the daily status of supply and demand and actual methods that they can use to save power. We hope that this information will be of use to our customers in saving power and using power efficiently.
• Taking into consideration the status of power supply and demand this winter in the nation as a whole, we find that there are regions in which extremely severe supply and demand conditions can be expected. Given this, it is predicted that there will be cases in which electric utilities in these regions will request supplementation of power from us.
• When such requests are made, Chubu Electric will look at each case and give close consideration to its own supply and demand status, and decide whether or not to conduct a supplementation of power on that basis. As a company, we wish to contribute to ensuring a stable supply of power throughout the country, while always maintaining a stable supply for our own customers. We ask our customers for their understanding in this matter.
• Next, I would like to discuss the status of fuel procurement.
• Our main measure to bolster our supply capacity in view of the shutdown of all units of the Hamaoka Nuclear Power Station is to increase the output of our LNG-fired facilities.
• Because of this, while we projected an LNG requirement of approximately 8.4 million tons in our initial plan for this fiscal year, in the first half we procured an additional amount of approximately 3.8 million tons, and looking towards our measures to respond to supply and demand over winter, we predict that we will require a further amount of approximately 0.8 million tons. We predict that our additional LNG procurement will amount to a total of approximately 4.6 million tons, bringing our LNG requirement for this fiscal year to approximately 13 million tons, or about 1.5 times the figure in our initial plan.
• The outlook at present is that we believe we will be able to fulfill our requirement for this fiscal year through the procurement of additional LNG from producing countries such as Qatar.
• However, in the area of fuel procurement, it is not enough to simply establish a contract guaranteeing the necessary amount. Procurement is only completed when the procured fuel is safely stored in the company’s tanks.
• In an average year, about 170 tankers are needed for our procurement of LNG. This fiscal year, we expect the figure will be around 20% higher, or approximately 200 ships. This will mean a very significant increase in the operation of our fuel acceptance facilities such as docks for the tankers and LNG tanks. Given this, we will observe particularly meticulous care in our operations at our LNG acceptance facilities this winter, instituting measures including:

• Adjusting inspection periods to ensure that fuel acceptance equipment is able to operate continuously,

and

• Conducting preliminary studies to ensure that tankers are able to dock safely, and implementing optimal operational management through close and detailed communication.

• We will work continuously to ensure safe and steady procurement of fuel in order to make possible a stable supply of power.
• Changing the subject slightly, I would like to say a few words in relation to fuel procurement more generally.
• As we have already reported, yesterday the Chita LNG terminal, which we operate jointly with Toho Gas Co., Ltd., received its 3,000th LNG tanker safely and without incident.
• Close to 34 years have passed since we received our first shipment of LNG in 1977.
• At the time of the first oil shock in 1973, 80% of our power was generated by petroleum-fired facilities. Following this, based on the lessons learned from the oil shocks, we focused on reducing our level of dependence on petroleum, and worked to achieve the optimum mix of power sources, combining a well-balanced range of resources including nuclear and coal, in addition to introducing LNG-fired facilities.
• As a result, last fiscal year (FY2010), our level of dependence on power generated by petroleum-fired facilities dropped to 4%, while our ratio of power sourced from LNG-fired facilities increased to 46%, from coal-fired facilities to 26%, and from nuclear facilities to 15%. These results did not happen overnight, and represent the outcome of repeated efforts over the course of more than 30 years.
• We have continued to work to spread out risks such as the potential for interruption of the supply of a specific fuel and rapid increases in price by achieving a well-balanced combination of various fuels, without over-reliance on any single energy source, and utilizing a range of procurement sources for each fuel. We believe that these efforts will be extremely important in future in terms of realizing a stable supply of power.
• Energy security is a fundamental issue that must be considered from a realistic, ongoing, and long-term perspective. A clear view of the situation must be taken a few years from now, and onwards to 10, 50, and even 100 years in the future.
• Chubu Electric Power will go on working into the future in order to achieve the optimum ratio of power sources to enable a continuous, stable, economical and safe supply of electricity.
• We hope that we can rely on the support of all our customers in these efforts.

• Next, I will discuss our hosting of “Chuden Ecosession for Elementary School Students 2011.”
• Please look at Reference 2.
• Chubu Electric Power Company considers measures to combat global warming and other environmental preservation issues to be one of our most important management issues.
• Again, this year, as one of these “environmental communication activities,” we will be holding the “Chuden Ecosession for Elementary School Students 2011” on December 14 in order to increase the awareness of children, who will lead the next generation, concerning energy and the environment.
• Energy and the global environment are long-term issues, and we therefore believe that it is important to bequeath appropriate ways of considering the issues and approaches towards their resolution to the next generation.
• To this end, we strive to contribute to environmental education, offering these future leaders opportunities to think about energy and the environment.
• The “Chuden Ecosession” was commenced at the time of the Exposition of Global Harmony in July 2005, and this will be the sixth time that we have hosted the event.
• The event, to be held in Nagoya, will bring together approximately 550 students from six elementary schools in five Chubu region prefectures to offer presentations on the results of environmental studies for everyday issues conducted at each school.
• Following this, we will hold an “Eco Talk” session, in which I will participate with the well-known actor and weather forecaster Yoshizumi Ishihara in exchanging opinions with the students around the theme “Let’s think about the amazing ways to save energy and generate power that we will have 50 years in the future!”
• This will be my second Chuden Ecosession, following on from last year, and I look forward to another opportunity to be exposed to the students’ original ideas and to exchange opinions with them.
• I would be delighted if you would join us at this event that brings together elementary school students with hopes and dreams for the future of the planet. I hope to see you there.
• That concludes my remarks for today.