Receipt of a Notice of Reassessment from the Mexican Tax Authority

Chubu Electric Power Co., Inc. (“Chubu Electric Power”) received a notice of reassessment (“the Notice”), ordering the payment of 9,521 million Mexican pesos (Note) (approximately 75.9 billion yen) from the Mexican tax authority on December 17, 2022 for the transaction in which we succeeded our overseas electricity generation and energy infrastructure business to JERA Co., Inc. (“JERA”), an equity-method affiliate, as part of the company split on July 1, 2016.

In the transaction, Chubu Electric Power succeeded Chubu Electric Power Company International B.V. (“CEPCOI”), which was a wholly owned subsidiary, to JERA. The Notice orders Chubu Electric Power to pay taxes on the net assets (adjusted for inflation) of CEPCOI as of December 31, 2015, which had invested in the Valladolid gas-fired thermal power generation project and the Falcon gas-fired thermal power generation project in Mexico.

We believe the reassessment is unreasonable and goes against the Japan-Mexico Tax Treaty and Mexican tax law, and are preparing to file an appeal to the authority.

As we are preparing to appeal the Notice as described above, we will not recognize a provision for the reassessed amount. This will not affect our financial results at present.

We will promptly announce our response to this matter as soon as it is decided.

(Note) 1 Mexican peso = 7.97 yen (as of December 16, 2022)