Key Point of President's Regular Press Conference

Regular Press Conference for June 2012: President Mizuno’s Message

June 27, 2012
Chubu Electric Power Co.,Inc.

Hello, my name is Akihisa Mizuno, and I am President of Chubu Electric Power.
At today’s General Meeting of Shareholders and the subsequent meeting of the Board of Directors, I was officially appointed to serve as President of Chubu Electric Power.

Issues that need to be addressed

First, I would like to talk about three key issues for us in light of the current business environment facing Chubu Electric Power.
The environment facing the electric power industry has changed greatly since the Great East Japan Earthquake of March 2011, but the Group’s mission as an electric power utility—to provide a stable supply of safe and inexpensive energy for our customers—remains unchanged.
To continue fulfilling this mission, Chubu Electric Power will need to have a good balance of a variety of power sources, including nuclear, thermal and renewable energy.
Particularly in a resource-poor nation like Japan, we have to deal with the issues of high fossil fuel prices and global warming. Ensuring stable energy into the future means we must continue to use nuclear power, as it is a critical energy source.
In light of the situation I have just described, the following three issues are the most critical for Chubu Electric Power right now.
The first issue is “working to further enhance safety at the Hamaoka Nuclear Power Station,” and we aim to steadily carry out tsunami countermeasures and enhance disaster countermeasures.
The second issue is “working for a stable supply of electric power,” which refers to ensuring that our customers have a stable supply of electricity despite the tight supply and demand situation caused by the suspension of operations at the Hamaoka Nuclear Power Station.
The third issue, in light of our income and expenditure challenges, is “working for greater management efficiency,” or seeking to reduce fuel costs by operating our thermal power stations efficiently and seeking to maximize efficiency in fuel procurement and business management.
I would like to reaffirm that Chubu Electric Power is prepared to make every effort to deal with these three issues.
Chubu Electric Power is facing the most challenging business environment we have encountered since our founding, but as I take the helm, I know that our Group will work as one to get through the crisis and find a new way forward.
Chubu Electric Power hopes that at all times, it can continue to be an enterprise that changes to meet its customers’ expectations and support their lifestyles in response to their trust.

Supply and demand this summer

Next, I would like to talk about electric power supply and demand this summer.
July begins next week, so we are really heading into summer.
Looking ahead to this summer, Chubu Electric Power has been encouraging customers to sign up for new services such as summer holiday contracts, and at the same time we have asked private power facilities to increase output.
The help promised as a result of these efforts is about 100 MW greater than our initial target.
I would like to take this opportunity to thank our customers for their help.
Thanks to everyone’s help, we forecast that we will be able to ensure a reserve margin of 8-10% for our service area, which is our benchmark for supply stability.
However, the nation as a whole, especially Western Japan, is expected to face extremely challenging conditions this summer.
On June 16, the national government decided to restart Kansai Electric Power Company’s Ohi Power Station Units 3 and 4.
However, the national government forecasts supply and demand challenges in various parts of Western Japan, even after Ohi Power Station Unit 3 has restarted, and therefore the government has set a target of a 4% reduction in peak power use compared to the summer of 2010, which means continuing to ask customers in our service area to save energy.
As we mentioned on May 18, with our customers’ efforts to conserve energy, Chubu Electric Power hopes to do all we can to ensure a stable supply of power to Western Japan, while putting a priority on maintaining a stable supply to our own service area.
While we apologize for the inconvenience, we again ask that our customers make a particular effort, within reason, to conserve energy on weekdays between 1:00 - 4:00 PM, which is when electric power demand is especially high, between July 2 and September 28, the period during which the government is calling for energy conservation.
As we head into summer, Chubu Electric Power has maximized our supply capacity by continuing to operate facilities such as Taketoyo Thermal Power Station Unit No. 2, which we had intended to put under long-term planned shutdown, and by adjusting the periodic inspection schedules at thermal power stations.
Chubu Electric Power will continue to steadily conduct prioritized inspections and maintenance of our power stations and transmission and substation facilities, and will make every effort to ensure supply stability in our service area.

Company-wide disaster drill

Finally, I would like to talk about a Company-wide disaster drill we are planning to conduct.
On July 18, we will conduct a Company-wide disaster drill with the scenario of a major earthquake, such as a Tokai/Tonankai/Nankai triple-interlocked earthquake.
This is our second major Company-wide disaster drill since the Great East Japan Earthquake (the first was in September 2011).
As a business providing a lifeline for the Chubu Region, Chubu Electric Power understands how important it is to prevent disasters, or if that is impossible, to restore electricity to customers as quickly as possible after disasters.
Therefore it is extremely important to be sufficiently prepared with appropriate countermeasures for our nuclear power and other facilities, and to have all arrangements and rules in place for ensuring that those countermeasures are conducted without fail.
The upcoming drill, which covers all Chubu Electric Power workplaces (about 100 sites), will take place with the two following objectives.
First, to improve our initial response capacity, including setting up centers to oversee countermeasures and communicating information to parties inside and outside the Company.
Second, to verify the effectiveness of our nuclear power disaster system, which we revised following the accidents at Tokyo Electric Power Company’s Fukushima Daiichi Nuclear Power Station.
First, I’d like to talk about the scenario we are using for this drill.
The scenario anticipates a magnitude 8 earthquake that hits from an area offshore of the Tokaido area to an area offshore of Shikoku, a so-called Tokai/Tonankai/Nankai triple-interlocked earthquake.
It also anticipates that the earthquake will cause a tsunami that impacts the coastal area.
As a result, the scenario anticipates that the Hamaoka Nuclear Power Station will lose all power, creating a situation falling under Article 10 of the Act on Special Measures Concerning Nuclear Emergency Preparedness.
The upcoming drill will assume that Reactors No. 3-5 at Hamaoka Nuclear Power Station will be in operation at the time of the disaster.
The scenario also anticipates major damage to other electric power supply facilities, such as:

Earthquake and tsunami damage that would reduce the supply capacity from thermal and hydroelectric power stations, and
Damage to substations, transmission lines and distribution lines that would result in simultaneous large-scale power outages.

Next, I’d like to give an overview of the drill.
The key part of the drill is our initial response when a natural disaster such as earthquake happens simultaneously with a nuclear power disaster.
This includes:

Simultaneously setting up a disaster countermeasures office to respond to the earthquake or other natural disaster and a crisis countermeasures offices to respond to the nuclear disaster.
The major content of the drill involves communicating information to parties inside and outside the Company and operating the various facilities used in emergencies.

Additionally, in light of the accidents at the Fukushima Daiichi Nuclear Power Station, we have set up a new support system run by countermeasures personnel from outside the nuclear power department to help respond to a nuclear disaster.
We will be verifying the effectiveness of the new support system during this drill.
This includes:

A drill to establish a nuclear disaster call center to convey the status of our nuclear power station rapidly to customers, and
Drills to ensure that screening personnel are prepared for a situation in which radioactive material is spreading and that they know how to operate equipment, among others.

Chubu Electric Power will continue to prepare crisis management systems and countermeasures for large-scale natural disasters, including a Tokai/Tonankai/Nankai triple-interlocked earthquake, based on the objectives of strengthening facilities against disasters and creating a disaster-prevention system designed for a quick recovery.
That concludes my remarks for today.

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