Key Point of President's Regular Press Conference

Key Point of President's Regular Press Conference

December 2017 Regular Press Conference : President Katsuno's Message

December 26, 2017
Chubu Electric Power Co.,Inc.

  • Today I will be discussing the following matters:
    • Looking back over the past year and plans for the coming year
  • Regarding drastic changes in the business environment as opportunities for achieving sustained growth, this past year we at Chubu Electric Power have aggressively promoted efforts for laying a new foundation.
  • In terms of sales, the full retail deregulation of gas started in 2017 following that of electric power. This year has been a historical turning point for the energy industry.

Addressing full retail deregulation

  • To cope with changes in the sales-related business environment, Chubu Electric Power has established the following as its three sales strategy pillars and has been committed to rolling out sales activities in corresponding business fields:
    • New service to continue serving as a company of choice for Chubu area customers
    • Expansion of electricity business in the Tokyo metropolitan area
    • Entry into gas sales for household use
  • In terms of electric power sales in the Chubu area, we are enjoying a positive response to our new rate menus. As of December 21, we have attracted around 1,270,000 applications.
  • This likely was a favorable response to our customer need-reflecting rate menus and services. Meanwhile, a growing number of customers are switching over to other companies, making us realize that the competition is further heating up.
  • By promptly providing services with high added value amid the severe competition, we hope customers will view Chubu Electric Power from the aspects of both price and service.
  • Turning to the Tokyo metropolitan area, we have attracted around 150,000 applications as of December 14.
  • Given our lack of an operation base in the area around Tokyo, Chubu Electric Power has been rolling out sales activities through various routes including: direct sales from us; electricity wholesale utilizing Diamond Power; and special price plan with partner companies.
  • Chubu Electric Power Group will put all its efforts into sales activities so that the Group can swiftly achieve its goal of attracting 200,000 customers. The Tokyo Sales Department, which was established this April, will serve a central role in this effort.
  • Turning to household gas sales, some 90,000 customers have applied as of December 24. This is a good start, and likely is a result of customers generally being in favor of the following points we worked out as a new entrant into gas sales:
    • Low-cost and easy-to-understand rate menu
    • Security system enabling customers to reliably use our gas
    • Improved convenience by collectively billing gas and electricity usage
  • More customers are consulting Chubu Electric Power with rate simulations and are inquiring about the safety of and inspections for gas equipment. Chubu Electric Power’s gas business is slowly but surely becoming more commonly accepted by customers.
  • For the time being, we will put our best effort into achieving 100,000 applications within this fiscal year. Then we will reinforce gas sales activities to swiftly achieve our next goal of attracting 200,000 applications by fiscal 2022.

Measures implemented at Hamaoka Nuclear Power Station and at thermal power stations

  • I now turn to measures implemented at Hamaoka Nuclear Power Station and the development of thermal power stations.
  • Determined not to let an accident similar to the Fukushima Daiichi Nuclear Power Station recur, Chubu Electric Power has been steadily working on physical measures geared toward enhancing Hamaoka Nuclear Power Station’s safety, and has also been fully committed to non-physical measures, e.g. developing emergency response systems and enhancing drills.
  • As previously announced, the Nuclear Regulation Authority (NRA) review meeting’s screening on earthquakes judged the approach to evaluations concerning earthquakes between plates, active faults around the site, and earthquakes within oceanic plates as generally appropriate.
  • Currently Chubu Electric Power is briefing the NRA on evaluations concerning faults within the site, so as to have NRA confirm that faults existing within the station site are not active.
  • Reviews for Hamaoka Nuclear Power Station is making steady progress. One example is the start of reviews this September on design basis tsunami.
  • We will continue to carefully respond to the reviews, and make effort to have the station deemed compliant with new regulatory requirements as early as possible.
  • In the meantime, as a measure to strengthen Hamaoka Nuclear Power Station’s non-physical measures, Chubu Electric Power signed an agreement with Tokyo Electric Power Holdings and Hokuriku Electric Power this March on mutual technical cooperation for improving nuclear safety.
  • Based on this agreement, Chubu Electric Power will cooperate with the other two firms in:
    • Assisting evacuation of local residents and accident recovery activities alike, capitalizing on the companies’ geographical proximity
    • Improving operator skills and sharing operation knowledge
  • Cooperation among the three companies is expected to further enhance the effectiveness and responsiveness of reactions made in the event of nuclear emergencies.
  • The Hamaoka Nuclear Safety Advisory Board, the establishment of whom I referred to in my presentation back in October, performed its activity late last month.
  • The board’s members are specialists who have long been involved with nuclear power. They are now compiling a recommendation which is scheduled to directly be reported to me, the president, by the end of January.
  • I’m expecting to see an outspoken, knowledge- and experience-based recommendation that leaves cost, difficulty, or social valuation out of view and looks to purely contribute to the safety of Hamaoka Nuclear Power Station’s field workers.
  • Chubu Electric Power will go beyond the new regulatory requirements and continue to further enhance the safety levels of Hamaoka Nuclear Power Station.
  • Moreover, Chubu Electric Power will offer thorough explanations to local residents and society at large about measures at Hamaoka Nuclear Power Station, and address every concern and doubt that such parties harbor to build a relationship of trust.
  • Turning to thermal power generation, this September saw the start of commercial operations at Nishi-Nagoya Thermal Power Station No. 7-1, which boasts a world-class LNG thermal power efficiency of around 62%.
  • In October, Chubu Electric Power received a definitive declaration from Japan’s Minister of Economy, Trade and Industry on the environmental impact evaluation for Taketoyo Thermal Power Station’s replacement plan. The declaration stated there is no need to make changes to the environmental impact evaluation document.
  • Development plans for thermal power stations are making steady progress. We have set measures for coping with global warming and other environmental preservation efforts as part of important management issues, and will plan and operate thermal power generation in view of both achieving economic efficiency and maintaining the global environment.

JERA

  • I now turn to JERA.
  • Areas that would highly benefit from and have little obstacles in integration have been the first in undergoing mergers since the establishment of JERA in April 2015. With business rollout efforts harnessing economies of scale, the benefits of integration are being steadily brought in.
  • This June, Chubu Electric Power signed a joint-venture agreement with TEPCO Fuel & Power Company in relation to integrating existing thermal power generation businesses into JERA.
  • With the aim of integrating their business within the first half of FY2019, the two companies are holding concrete discussions about business facilities that are to be transferred to JERA.
  • Integrating existing thermal power generation businesses will result in establishing a value chain that covers fuel upstream stakes and procurement, as well as power generation and the wholesale of electric power and gas.
  • As a global energy company that can compete on an equal footing with rivals in the international energy market, JERA will stably supply electric power, gas, and other energy that’s globally competitive. This effort is expected to merit customers and contribute to raising Chubu Electric Power Group’s value.

Plans for the coming year

  • Now turning to plans for the coming year: Chubu Electric Power is entirely reorganizing itself next April, and that initiative is to include the reinforcement of each internal company. With this initiative, Chubu Electric Power seeks to develop a system further capable of swiftly and flexibly addressing changes in the business environment, and to drastically enhance profitability and competitiveness.
  • Chubu Electric Power will work to promote workstyle reform: an initiative for arranging a good work environment. This is to enable our employees, who are the driving force for the reorganization, more flexibly and efficiently engage in their respective operations while maintaining their health and stable living standards.
  • We have been making efforts so that employees can achieve a good work-life balance. Such efforts include supporting employees in balancing their work and child-rearing/caregiving duties, as well as promoting workstyles geared toward limiting long working hours and improving labor productivity (e.g. introduction of flextime work systems and establishment of days in which employees can leave the office early).
  • In order to establish workstyles that match the various lifestyles of employees, Chubu Electric Power will deliberate about having all its business sites adopt a flextime work system and about introducing telecommuting.
  • Chubu Electric Power will also develop a highly satisfying workplace by promoting a “diversity management” approach, which enables various human resources to fully fulfill their potential.
  • By having employees attain their self-set goals and in turn experience a feeling of achievement as a result of the company offering a better work environment, I hope employees would come to see their workplace as a platform for self-actualization.

Conclusion

  • As mentioned earlier, the business environment surrounding Chubu Electric Power Group is changing significantly, but Chubu Electric Power’s mission of providing environmentally-friendly, high-quality energy in a safe, reasonable and stable manner remains unshaken.
  • In the meantime, Chubu Electric Power hopes to keep actively working on digital innovations that change social structures in major ways, in turn developing services characteristic of Chubu Electric Power.
  • We will push hard to become a leading total energy service corporation that provides customers with better-than-expected services ahead of competitors.
  • This ends my presentation.

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