Regular Press Conference for March 2012

(Introduction)

• I will be providing an overview of our Operating Objectives for FY2012. Please refer to the attachment 1, “Overview of Operating Objectives for FY2012.”
• These Operating Objectives outline directions for the Chubu Electric Group over the mid-term, and present concrete measures to enable us to realize these directions. Every year, we make them known to a wide range of stakeholders and other interested parties.
• The Operating Objectives that we have formulated at this juncture focus on measures that we believe the Chubu Electric Power Group should adopt in view of recent changes in the operating environment including the Great East Japan Earthquake, the incident at Tokyo Electric Power Co., Inc.’s Fukushima Daiichi Nuclear Power Station, and the suspension of operation of Chubu Electric Power’s Hamaoka Nuclear Power Station.

(Future optimal power supply)

• Since the earthquake, we have seen major changes in the business environment for electric utilities, but there has been no change to the Chubu Electric Power Group’s mission as an electric utility – the stable supply of safe and low-cost energy to our customers.
• In order to enable us to continue to fulfill this mission into the future, it is essential for us to achieve a good balance between a diverse range of energy sources, encompassing nuclear, thermal, and renewable energies.
• In particular, we believe that the continued use of nuclear power as an important energy source will be indispensable to Japan’s ability, as a resource-poor nation, to respond to the rising cost of fossil fuels and the issue of global warming and to ensure a stable supply of energy into the future.

(Three Important Initiatives)

• Given this, we intend to work to further increase the safety of Hamaoka Nuclear Power Station in order to ensure that the people of the region in which the plant is situated, and the people of Japan more generally, can be assured of peace of mind in this respect.
• The suspension of operation of Hamaoka Nuclear Power Station continues to place the company in a very difficult position, necessitating efforts to ensure a stable supply of power in addition to increasing fuel costs.
• Taking this business environment into consideration, we have formulated Three Important Initiatives to be implemented by our company in realizing our Operating Objectives, and we will spare no efforts in putting these measures into effect. Our Three Important Initiatives are

• Initiatives to further increase the safety of Hamaoka Nuclear Power Station
• Initiatives to ensure a stable supply of power
• Initiatives for the realization of greater operating efficiency

(Initiatives to further increase the safety of Hamaoka Nuclear Power Station)

• I will begin my discussion of these Three Important Initiatives by looking first at initiatives to further increase the safety of Hamaoka Nuclear Power Station. In addition to proceeding steadily with tsunami countermeasures, including the breakwaters that are currently under construction, we will formulate necessary measures as appropriate in response to new findings in order to further increase the safety of the plant.
• In addition to these equipment- and facility-based measures, we will also work to enhance system-based disaster prevention measures.
• Specifically, while enhancing our disaster prevention systems as a Group we will also strengthen our cooperation with the national and local governments to enable integrated measures to be adopted in the event of an emergency.

(Initiatives to ensure a stable supply of power)

• Under the category of initiatives to ensure a stable supply of power, first, we will work at our full capacity to implement measures enabling us to respond to the energy supply and demand situation with the suspension of operation of Hamaoka Nuclear Power Station.
• Turning to the power supply and demand situation in the summer months of FY2012, at present we are unable to provide an estimate of peak demand, given that it is necessary to conduct a detailed study of the effect of energy conservation measures based on results achieved in the period in which these measures were in effect, up to the end of March this year.
• With regard to our ability to supply power, we will continue to modify our schedule for periodic inspections of thermal power stations, and in addition, with the commencement of operation of Joetsu Thermal Power Station Unit 1-1, we will increase our supply capacity to around 28.1 GW. This represents a supply capacity offering a reserve margin of around 7% against maximum supply in FY2010 before the earthquake and tsunami disaster, and around 12% against maximum supply in FY2011, when energy conservation measures accounted for around 1 GW after the earthquake and tsunami disaster.
• In addition to ensuring supply capacity, we will also work conscientiously in the areas of inspection and maintenance of our power stations and related transmission facilities and procurement of fuel to be entirely certain that stable supply can be maintained.
• As a result of these efforts, it will be possible to avoid blanket calls for energy conservation, which have a significant social impact, or calls for large-scale operational adjustments at the level of industries, as was the case in FY2011.
• We will also proceed with efforts from medium- to long-term perspectives to ensure the safety and stability of our supply of power.
• First, because of delays in the construction schedules for other companies’ nuclear power stations, in order to ensure future supply capacity while reducing fuel consumption and CO2 emissions, we have advanced our schedule for commencement of operation of Nishi-Nagoya Thermal Power Station Group No. 7, the construction of which is now in the preparation stage, from FY2019 to FY2017.
• In addition, pursuing the introduction of renewable energies in order to realize a low-carbon society, we will proceed steadily with the development of Tokuyama Hydroelectric Power Station, and work as a Group to develop mega solar, wind power, and small- and medium-scale hydroelectric projects.

(Notification of formulation of Electricity Supply Plan)

• Today, we have notified the Minister of Economy, Trade and Industry of our FY2012 Electricity Supply Plan, which reflects the discussed measures towards enabling the continuation of stable supply.
• At present, we are proceeding with construction work for tsunami countermeasures at Hamaoka Nuclear Power Station, looking towards their completion by December 2012. However, we are not able to forecast when Hamaoka Nuclear Power Station will commence operation, or whether we will be able to receive power from nuclear power stations belonging to other companies.
• In addition, as I have already discussed, we are not at present able to project supply and demand conditions for summer FY2012.
• Because of this, we have notified the Minister that our plans with regard to nuclear power stations and the balance of supply and demand are uncertain.
• However, given that tight supply and demand conditions are predicted throughout the country for FY2012, in order to ensure a stable supply in all parts of the country rather than the Chubu region exclusively, we will examine the possibility of power interchanges with other companies within the scope of the surplus power we have available.

(Initiatives for the realization of greater operating efficiency)

• With regard to initiatives for the realization of greater operating efficiency among the Three Important Initiatives, in view of the current burden on our balance sheet due to factors including a significant increase in the cost of fuel for our thermal power stations to make up for the shortfall in nuclear power, we will work to implement improvements in order to realize the maximum operating efficiency.
• Specifically, on the facility front, in addition to reducing fuel costs through measures including the introduction of high-efficiency combined cycle generation, we will work to reduce facility maintenance costs through the rationalization of inspection and maintenance procedures, for example by means of the rigorous selection of the items to be inspected and the development of new maintenance methods.
• We will also make active efforts to increase the efficiency of our business operations, seeking to maintain or increase an already high level of labor productivity.

(Chubu Electric Power Group Management Vision 2030: Vision for Our Company)

• We formulated the Chubu Electric Power Group Management Vision 2030 in February 2011 to provide a vision for the company that we seek to be in 2030. We will work steadily towards the realization of this vision of our company, in addition to implementing the Three Important Initiatives, while always remaining aware of changes in the business environment.
• Among initiatives towards the realization of the vision for our company that form part of our Operating Objectives, we believe that the following in particular have increased in importance since the earthquake and tsunami disaster:

• Promoting renewable energy
• Enhancing stability, economy and flexibility in fuel procurement
• Creating a next-generation network
• Becoming the top corporate group in energy services
• Implementing initiatives to enable continuation of business in the event of a large-scale disaster

(Conclusion)

• As well as realizing its mission as an electric utility, the Chubu Electric Power Group will continue to fulfill its social responsibility as a good corporate citizen, delivering “assurance.” In doing so, we will respond to the trust placed in us and the high expectations held of us in all quarters, including the members of our regional community, our shareholders, investors, and business partners.
• That is all from me for today.