July 2014 Regular Press Conference : President Mizuno's Message

• First, I would like to talk about our FY2014 First Quarter Financial Results.

(Consolidated)

• Consolidated sales increased in this quarter. In our electricity business, factors including an increase in fuel cost adjustment and electricity rate increase saw an increase in lighting power charges, and in other businesses as well, from the increase in sales in the energy business to 723.1 billion yen, an increase of 99.8 billion yen against the same quarter last fiscal year.
• In the area of consolidated ordinary profit (loss), factors including increased electricity rates and fuel cost adjustments saw an increase on our results, making an ordinary income of 15 billion yen, an increase of 61.4 billion yen against the same quarter last fiscal year.

(Non-consolidated)

• Next, turning to our non-consolidated results,
  Sales increased 95.4 billion yen year on year to 681.4 billion yen
  Operating income increased 59.9 billion yen year on year for a profit of 20.3 billion yen
  Ordinary income increased 55.3 billion yen year on year for a profit of 9.3 billion yen
  Net income for the quarter increased 35.6 billion yen year on year for a profit of 7.3 billion yen
  

(Earnings outlook for FY2014)

• Next, let’s look at the earnings outlook for FY2014.
• he forecasted earnings values announced on April 28 have been corrected to reflect the latest performance trends.
• Due to factors such as the yen remaining stronger than expected for the exchange rate, we project that ordinary income will increase by 10 billion yen from the previous announcement: consolidated results are expected to be 30 billion yen, and non-consolidated results are expected to be 20 billion yen.
• In addition to an increase in ordinary income, from the outlook of accounting for the settlement money, etc., related to failure events of our equipment as extraordinary income, the current net income is projected to increase by 26 billion yen from the previous announcement, with consolidated results expected to be 38 billion yen, and non-consolidated results expected to be 33 billion yen.

• Next, I would like to talk about changes made to the construction plans involving the dry storage facility for spent fuel at Hamaoka Nuclear Power Station.
• With regard to the spent fuel generated at nuclear power plants, operators are responsible for proper storage and management until exporting to the reprocessing plant.
• In order to strengthen our storage capabilities for spent fuel, Chubu Electric officially announced construction plans of a dry storage facility for spent fuel in December, 2008. We have been moving forward with geological surveys of the planned construction site and design of the facility.
• Following this, based on the New Regulatory Requirements introduced in July, 2013, Chubu Electric established a standard ground motion Ss1 (1,200 gal) reflecting the latest knowledge.
• We have been reviewing the seismic design considering this standard ground motion. The basic design has been completed, and we finalized changes to the construction project.
• As a result of the seismic design review, seeing that additional shear walls are necessary for the storage building in order to strengthen seismic capacity, the spent fuel storage area will be reduced.
• Due to the decrease in storage area, the storage capacity will be reduced from the 700 ton uranium scale of the original plan (approximately 4,000 fuel assemblies) to a scale of 400 tons of uranium (approximately 2,200 fuel assemblies).
• Due to the review of seismic design, the target date to begin use will be postponed two years from the original plan of FY2016 to FY2018.
• The construction site will remain as planned as the north side of the turbine building at Hamaoka Nuclear Power Station Unit 4.
• We at Chubu Electric would like to conduct an Application for Authorization of Nuclear Reactor Installation Change as soon as we are prepared.
• We will carefully explain the changed details of the plan to everyone involved, including local communities.

• Next, I would like to talk about the construction permit acquisition involving the Freeport LNG Project.
• Chubu Electric and Osaka Gas Co., Ltd (“Osaka Gas”) obtained a construction permit (=approval of the final environmental impact assessment report) on July 30, local time (Japan time, today), from the Federal Energy Regulatory Commission (“FERC”) for the Freeport LNG Project in Texas, USA, planned for LNG procurement from 2018.
• This approval means that all major licenses have been obtained, and both companies will promptly move forward with preparations for the final investment decision in the future.
• In order to reliably procure LNG from the Freeport LNG Project, we will continue to cooperate with Osaka Gas and Freeport LNG Development, L.P., to launch the project.

• Moving on the last topic, on the 1st of this month, Unit 4 of the Hekinan Thermal Power Plant stopped operation due to a partial equipment failure.
• We apologize for the worry we caused. Following the operation stop, repairs and inspections were completed, and as the soundness of equipment was confirmed, operations were resumed on July 22.
• Although demand continues growing, Chubu Electric will conduct intensive and focused inspection and maintenance of power stations and transmission and conversion facilities, and together with our customers’ efforts to conserve energy, we will strive to provide a stable supply of power in our own service area.
• We will flexibly supplement power to Western Japan where supply shortages are expected, and help ensure a stable supply of power.
• That is all for me.