Key Point of President's Regular Press Conference
Key Point of President's Regular Press Conference
December 2015 Regular Press Conference : President Katsuno's Message
December 22, 2015
Chubu Electric Power Co.,Inc.
- Today I will be reviewing the past year.
Looking back over the past year
- As we previously announced, the business environment surrounding Chubu Electric Power is experiencing a drastic change with reforms in electric power and gas systems. Examples include the full retail deregulation of electric power that starts next April, the legal unbundling of power transmission and distribution slated for fiscal 2020, and the gas business deregulation planned in fiscal 2017.
- In the face of this historic turning point, I took over as President in June 2015 and navigated Chubu Electric Power’s management.
- My responsibility was heavy, but I viewed the transformations in the business domain as a significant opportunity for Chubu Electric Power to make progress. This was a year in which business area expansion strategies, geared towards our continued development, had been put into practice while joining forces with our employees.
Full retail deregulation of electric power
(The three pillars of our sales strategy)
- I first would like to talk about our response to the full retail deregulation of electric power.
- For next April’s full retail liberalization, Chubu Electric Power will outperform competitors by boosting our earnings. This will be achieved through setting the following as our three sales strategy pillars and thereby broadening our business areas:
- New services for customers using the company’s electricity
- Business expansion in the Tokyo metropolitan area
- Entry into gas sales for household use
- In an effort to become a one-upped total energy service corporation, Chubu Electric Power is working to steadfastly identify customer needs and, ahead of competitors, offer services with high added value that goes beyond customers’ expectations.
(New services to Chubu region customers)
- We announced new services for Chubu region customers in September 2015.
- With our online member service KatEne, Chubu Electric Power will enrich and offer services that contribute to daily life. This will include delivering a variety of information and offering point services.
- By leveraging the smart meters that are being introduced to households, we will also visualize the quantity of consumed power and, based on usage conditions, we will distribute email messages.
- Thus far, KatEne has managed to acquire around 730,000 members (as of Dec. 20).
- Chubu Electric Power looks to invite more customers learn about the KatEne service, and will aim to gain a membership that amounts to 1,000,000 by the end of this fiscal year.
- Meanwhile, for business-related customers, a new offering will be provided through our web member service BizEne. This will allow for resolving energy issues as well as business matters in general, such as customer attraction, accounts, and legal and taxation issues.
(New rate menus)
- As we previously announced, the wheeling charge was approved by the Minister of Economy, Trade and Industry last Friday on Dec. 18.
- Electric retail utilities other than Chubu Electric Power will be devising rate menus for our area by building on the approved wheeling charge.
- We will continue to serve as a top-choice utility for customers by announcing rate menus next January that cater to consumer needs/lifestyles, or one that merges electricity- and daily life-supporting services.
- Customers will presumably have further heightened demands and expectations towards Chubu Electric Power.
- Attention will be given on customer feedback in an effort to supply high added value services that meet the expectations of clients. We will also continue to extensively review on partnerships with companies from different industries or business categories.
- We will inform about the business expansion in the Tokyo metropolitan area as well as the entry into gas sales for household use, amongst the three sales strategy pillars, as soon as we finish arranging them.
Measures implemented at Hamaoka Nuclear Power Station
- With the determination of not letting an accident similar to that of the Fukushima Daiichi Nuclear Power Station recur, Chubu Electric Power is working on both physical and non-physical measures and is carefully dealing with the Nuclear Regulation Authority’s review meeting.
- Regarding the compliance review for new regulatory requirements, we applied for Unit 3 in June 2015 following Unit 4, which we applied for in February 2014.
- The compliance review for Kashiwazaki-Kariwa Nuclear Power Station is currently underway in advance. Chubu Electric Power expects that reliably identifying KK’s review conditions and applying them appropriately to Hamaoka Nuclear Power Station would enable to accelerate the review for Hamaoka NPS.
(Physical and non-physical measures)
- Constructions for enhanced safety measures are progressing in a satisfactory fashion. The works for Unit 4 are scheduled to complete at around September 2016, and at around September 2017 for Unit 3.
- Ongoing constructions include the improved embankment for the tsunami protection wall’s east-west area, as well as installations of the gas turbine generator and the filter vent pipe.
- In terms of non-physical measures, Chubu Electric Power is making every effort by preparing disaster prevention measures, amplifying training, and strengthening partnership with local governments to secure the effectiveness of resident evacuations and other emergency responses.
- In this manner, we will carry forward physical and non-physical measures for Units 3 and 4 on a steady basis and will also respond in earnest to NRA review meetings.
- Regarding Unit 5, equipment-level soundness evaluations based on the influence of seawater flow-ins were completed and reported to the Nuclear Regulation Authority on Dec. 15 last week.
- From the evaluations, Chubu Electric Power views that Unit 5’s operations will not experience any impact despite the need for some equipment repairs and replacements.
- We will consider on implementing a comprehensive soundness evaluation for the plant. This will be upon taking required steps based on per-equipment soundness evaluations and reviewing the integrity of both systems and equipment.
(Units 1 and 2)
- Units 1 and 2, which currently are in the decommissioning process, underwent change approval applications in March 2015 as a lead-up to transitioning to the second stage. Thus far, we submitted partial revisions of the application twice.
- Chubu Electric Power is preparing to swiftly transition into the second stage after obtaining approval.
- Decommissioning is an undertaking that involves decontamination to reduce worker exposures. The process lasts over a long period, i.e. around 30 years, given that equipment with high radiation levels are removed in a carefully-planned manner upon waiting for the levels to drop.
- We will continue to make effort while placing top priority on ensuring safety.
- I have referred to per-unit initiatives carried out at Hamaoka Nuclear Power Station, but the key factor is to gain the local residents’ understanding towards our efforts.
- Regarding the measures implemented at Hamaoka Nuclear Power Station, Chubu Electric Power will continue to thoroughly offer explanations for local residents and the society at large.
- Under the comprehensive alliance between Chubu Electric Power and Tokyo Electric Power (TEPCO), JERA Co., Inc. has been established on Apr. 30, 2015. This firm looks to become a global energy company that occupies a strong competitive position in the international energy market.
- Since its establishment, JERA has initiated new developments for fuel upstream and domestic/international IPP businesses, and also started to review new fuel procurements. Chubu Electric Power and TEPCO’s existing fuel shipment and trading businesses have been integrated from October 2015.
(Agreement on Step2)
- Chubu Electric Power and TEPCO today agreed to integrate into JERA the existing fuel, overseas power generation and energy infrastructure businesses in July 2016.
- This agreement is in line with the roadmap presented upon the institution’s launch.
- Integrating these businesses will signal the establishment of a framework for JERA to integrally and optimally manage the supply chain. This spans from fuel upstream stake and procurement, overseas power generation, and the new development or replacement of domestic thermal power plants.
- Harnessing the technology, human resources, equipment, and other management resources owned by Chubu Electric Power and TEPCO, JERA will engage in the following three initiatives:
- Aiming for Japan’s top thermal power generation player and newly establishing/replacing domestic power
- By expanding the thermal power generation business, obtaining new earning bases in emerging nation markets in which major energy demand growths are being experienced
- Achieving fuel procurement that can flexibly respond to the business environment, customer needs, and other changes in energy demands
- These initiatives will serve to increasing the enterprise value of Chubu Electric Power Group.
- We will be concretely reviewing the integration of existing thermal power generation businesses while setting our goal to finalize decisions in the spring of 2017. This will be predicated on confirmations for JERA business results, as well as on schedules for establishing an independent corporate structure based on TEPCO's management reform development.
Launch of the internal company system
- As I announced in last month's press conference, Chubu Electric Power decided to launch an internal company system in April 2016 to flexibly and swiftly address changes in the business environment.
- By delegating authority and setting goals on a per-company basis for power generation, power network, and retail, Chubu Electric Power will create an independent business operating framework that further unites responsibilities and control.
- Chubu Electric Power’s mission to supply eco-conscious, safe, and quality energy on a stable and low-cost basis will remain unchanged under any future business environment.
- While consistently fulfilling this mission, we will work under the internal company system to develop as a total energy service corporation that transcends boundaries existing between electricity and gas, supply areas, or Japan and abroad.
- That concludes my remarks for today.