Key Point of President's Regular Press Conference

April 2014 Regular Press Conference: President Mizuno’s Message

April 28, 2014
Chubu Electric Power Co.,Inc.

FY2014 Operating Objectives

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.

Following the suspension of operations at the Hamaoka Nuclear Power Station in May 2011, Chubu Electric Power’s fuel costs for thermal power have increased significantly, and we continue to face extremely challenging conditions.
Although we are making the utmost efforts to cut costs through increased management efficiency, even with maximum management efficiency, it has become a difficult situation for us under the previous tariff levels to cover the necessary fees for accomplishing our most important mission of providing a safe and stable supply of electric power.
Due to this situation, we applied to the Minister of Economy, Trade and Industry for an increase in electricity rates. As previously notified, an increase of 3.77% on the average rates for customers in the regulation section was approved on April 18 this year, to be implemented starting May 1.
We apologize to customers for the burden that will be faced by this increase in electricity rates, and we would like to ask for your understanding.
In order to continue our most important mission of providing a safe and stable supply of electric power, we will continue to strengthen our “initiative to further enhance safety of Hamaoka Nuclear Power Station,” our “initiative for stable supply of electric power.” Furthermore, the entire company will work with no areas considered off limits, to further strengthen our “initiative for management efficiency.”

I would like to talk about the first of these “Three Key Initiatives,” namely the “Initiative to further enhance safety of Hamaoka Nuclear Power Station.”
In addition to earthquake, tsunami, and other serious accident countermeasures that have been voluntarily worked toward thus far, necessary additional countermeasures will be implemented with the aim of promptly adapting to the new regulatory requirements of the Nuclear Regulatory Authority which came into force in July, 2013.
Regarding measures to increase safety, we will strive to enhance training and prepare disaster management systems, and strengthen disaster-prevention countermeasures in cooperation with national and local governments, in addition to facility side equipment initiatives pertaining to facilities.
Regarding these initiatives, we will make our utmost efforts to carefully explain the situation to the society and community for your understanding and without being limited to responding to new regulatory requirements, initiatives to further enhance the safety of Hamaoka Nuclear Power Station will proceed voluntarily and continuously.

Next, I would like to talk about our “Initiative for stable supply of electric power.”
Among a significant decrease of supply capacity associated with the suspension of operations at the Hamaoka Nuclear Power Station, with our customers’ efforts to help conserve energy and commercial operations such as the start of the Joetsu Thermal Power Station and continuous operation of aged thermal power machines, we have been able to maximize measures on the supply side, and has been able to supply the Chubu region with a stable supply.
Through initiatives on the supply side in the summer of 2014, it is forecasted that a reserve margin acting as an indication of stable power supply can be secured.
However, as the stable power supply foundation is not steady while the operation of Hamaoka Nuclear Power Station is suspended, focused inspections will continue to be conducted for power plant and power transmission facility.
While securing the necessary supply capacity for the stable supply of the Chubu region, we will continue to maximize cooperation for the stability of supply and demand across the entire country, such as the implementation of support flexibility at the request of other power companies that may be tight on supply and demand.

Regarding “initiative for management efficiency,” in order to reliably achieve management efficiency incorporating authorization costs of electricity rates based on the strict assessment policy in the electricity rate review, we will continue to make every effort for a strong commitment to greater efficiency across all aspects, including the reduction of equipment and service procurement costs, improvement of thermal efficiency, inexpensive fuel procurement, and efficient business operations.
Regarding the reduction of equipment and service procurement costs, by leveraging the functionality of smart meters together with initiatives for the standardization of specifications and expansion of competition orders, we are proceeding with management efficiency.
A low-cost structure can be achieved through initiatives for continual management efficiency, which will lead to the strengthening of competitiveness.

Together with these “Three Key Initiatives,” we will aim to achieve “What We Aim For” to be “a corporate group that satisfies all energy-related needs and keeps growing.”
Regarding the electric power system reform, full-fledged discussions are underway aimed at ensuring further neutrality of the power distribution department and introducing full deregulation of retail electric power.
Not only limited to electric power system reform, deliberation of gas system reform is also underway. In the future, the business environment surrounding energy will continue to change significantly./li>
Under these “Operating Objectives,” in order for Chubu Electric Power to continue to respond to the expectations and trust of our customers and the society, we will seize these changes as large opportunities, and complied the following as initiatives to actively strive to achieve “What We Aim For” as a group:

Chubu Electric Power will continue to fulfill its mission of providing a safe and stable supply of electric power. At the same time, we will fulfill our social responsibility as a good corporate citizen that gives people peace of mind, by listening sincerely to our customers and local communities and responding to their expectations and trust.
That is all from me today.