July 2011 Federation of Electric Power Companies of Japan Press Conference with Chubu Electric Executive Vice President Tomohiko Ohno

 (Background)

• Chubu Electric Power decided at a meeting of our Board of Directors on May 9 to suspend operations at Hamaoka Nuclear Power Station, Reactors No. 4 and 5, and to postpone the resumption of operations at Reactor No. 3.
• The suspension of operations at Hamaoka Nuclear Power Station will mean that our supply capacity will fall far short of peak load, and for this reason Chubu Electric Power on May 9 established an “Electric Power Supply and Demand Task Force,” with President Akihisa Mizuno as the chairman, and we have been studying various measures for ensuring a stable supply of electric power.
• Today I will talk about electric power supply- and demand-side measures Chubu Electric Power is taking.

(Supply-side measures)

• Please see “1 Supply-side measures” in Reference 1.
• First, on the supply side, there are seven measures we are taking.
• The first point is to change the periodic inspection schedule for thermal power stations and shorten the process.
  Power station periodic inspections that were scheduled for this summer under the original plan will either be moved up or deferred, or the process itself will be shortened.

Specific examples are:

• Periodic inspections of Shin-Nagoya Thermal Power Station, Unit No. 7-2 (output 243 MW) and Kawagoe Thermal Power Station, Unit No. 4-4 (output 243 MW) will be interrupted and the units will operate from late July to early September.
• In addition, the start of the periodic inspection of Yokkaichi Thermal Power Station, Unit No. 3 (output 220 MW) is being deferred from early June to mid-September.
• Also, the completion of the periodic inspection of Kawagoe Thermal Power Station, Unit No. 2 (output 700 MW) will be moved up 15 days, from late July to early July.

There are other similar examples as well.

• The second point is to stop supplementing electric power to the 50 Hz (East Japan) region.
  In light of Chubu Electric Power’s difficult electric power supply and demand situation, we stopped supplementing electric power to the 50 Hz (East Japan) region as of May 19.
• The third point is to defer a long term planned shutdown at a thermal power station.
  Because the resumption of operations at Hamaoka Nuclear Power Station, Reactor No. 3 (which was to occur in March of this year) has been delayed, our supply capacity includes output from Taketoyo Thermoelectric Power Station, Unit No. 3 (output 375 MW), which had been prepared for unexpected situations.
• The fourth point is to resume operations at thermal power stations that are under long term planned shutdown.
  We are making every effort to quickly complete the equipment inspections, parts replacements and so on that are necessary to resume operations, and as a result Taketoyo Thermal Power Station, Unit No. 2 (output 375 MW) will resume operations in late July.
  We have additionally decided to resume operations of the Chita Daini Thermal Power Station, Unit No. 2 gas turbine (output 154 MW) in January 2012.
• The fifth point is that we will be changing the work stoppage times at hydroelectric power stations.
  Work stoppages were changed to October or later at the Nikengoya Hydroelectric Power Station (output: 26 MW- Shizuoka City, Shizuoka Prefecture), Kitamatado Hydroelectric Power Station (output: 24.2 MW- Iida city, Nagano Prefecture), Miho Hydroelectric Power Station (output: 6 MW-Iida city, Nagano Prefecture) and others.
• The sixth point is to purchase electric power from other businesses. We will purchase 30 MW of electric power from businesses owning large scale power stations from July through September.
• The seventh point is three steps to support electric power supply stability.

These include:

• Urgently expanding the operating capacity of the Mie Higashiomi Line, which connects our power grid to that of the Kansai Electric Power Co., Inc. (+280 MW);
• Focusing inspections on power stations, related power transmission and transformer equipment, etc.; and
• Additional procurements of LNG and oil fuel for our thermal power stations.

 (Demand-side measures)

• Next, I’d like to talk about our two main demand side measures.
  Please see “2 Demand side measures.”
• The first point is to have customers who own private power plants generate more electricity, which we estimate will reduce the amount of electric power they receive from us by about 60 MW.
• The second point is to have corporate customers expand their planned adjustment contracts, which has resulted in an additional approximately 90 MW of adjusted power.

(Electric power supply and demand outlook)

• I would like to discuss this summer’s electric power supply and demand outlook, with these supply- and demand-side measures taken into account.
  Please see (Table 1) and (Table 2) under “1 Monthly supply and demand plan” in the upper part of Reference 2.
• The supply-side measures discussed previously will make it possible to add up to 2,320 MW of additional supply capacity.
  Specifically, the supply capacity of 25,740 MW (generating end) in July (which fell to that level as a result of stopping all reactors at Hamaoka Nuclear Power Station) has now been increased to 28,060 MW (generating end).
• Additionally, the peak loads for July and August have been revised to reflect demand side measures.
  July and August peak load is anticipated to be 26,220 MW (generating end), or 150 MW lower than in the plan in effect when Hamaoka was shut down.
• The reserve margin was negative as a result of stopping all reactors at Hamaoka Nuclear Power Station, falling to the point where we would be unable to supply electric power to our customers, but with our supply- and demand-side measures, the outlook indicates a monthly reserve margin of 6 - 7% this summer.
  However, this still does not meet the 8% - 10% reserve margin that is the usual criterion for stable supply.
• Next, please take a look at “2 Weekly supply and demand plan” in the lower part of Reference 2.
• Chubu Electric Power has determined it would be more appropriate to provide more detailed supply and demand outlooks that incorporate the adjustments in manufacturing and operations that our customers have agreed to make. Therefore, we have indicated our weekly reserve margins in addition to our usual monthly ones.
• Even with our various supply- and demand-side measures, our reserve margin will fall below the 8% - 10% criterion for stable supply in the third and fourth weeks of July, the fourth and fifth weeks of August and the second week of September.

(Plea for energy conservation)

• Power demand peaks during the daytime on summer weekdays.
  The automobile manufacturing industry has agreed to shift Thursday and Friday operation to Saturday and Sunday this summer.
  Even with this, however, we anticipate that electric power supply and demand will be very tight during the hours of 1:00 – 4:00 PM on Monday – Wednesday.
• Chubu Electric Power is making every effort to ensure a stable supply by faithfully conducting prioritized inspections and maintenance on power stations and related transmission and substation facilities and other equipment.
• We regret any inconvenience to our customers, but we ask that they try to conserve energy between the hours of 1:00 – 4:00 PM on Monday – Wednesday.
  In particular, because our reserve margin will fall below the 8% - 10% criterion for stable supply between the hours of 1:00 – 4:00 PM on Monday – Wednesday during the third and fourth weeks of July, the fourth and fifth weeks of August and the second week of September, we expect supply and demand to be especially tight during those times, so we ask our customers to especially conserve energy then.
• Along with this plea to our customers to conserve energy, Chubu Electric Power has prepared the “CEPCO Electricity Forecast” to show our daily electric power supply and demand status in a readily understandable way. This information, which will be offered on our standard and mobile web sites June 27 – September 30, can be used by our customers to help them conserve energy.

(Summary: Acknowledgment of energy conservation efforts and resolve to provide stable supply)

• Finally, I would once again like to thank our corporate and residential customers and the entire region for their efforts.
  The automobile manufacturing industry has recently agreed to shift production industry-wide to conserve energy. Additionally, many other businesses are cooperating with steps such as changing their non-business days. These truly exceptional measures are being taken with great sacrifice on the part of these businesses.
  I would like to take this opportunity to sincerely thank them.
  In addition, regional offices and branches in our service area are receiving inquiries from area citizens about specific ways to conserve energy.
  We deeply appreciate the support and cooperation everyone has given.
• As the birthplace of craftsmanship, the Chubu Region is home to the automotive and other industries so crucial to supporting Japan’s economy, and is additionally actively involved in the fostering of future industries like aircraft and nanotechnology.
• Heading into this challenging summer, Chubu Electric Power will make full use of our supply capacity and our customers’ generous cooperative efforts, and we will do all we can to ensure a stable supply of the electric power that supports the regional economy.
• This concludes my remarks.