Annual Report 2014

Transcription

Annual Report 2014

2-5, Marunouchi, Takamatsu, Kagawa 760-8573, Japan
Tel +81-87-821-5061
URL http://www.yonden.co.jp/
SHIKOKU ELECTRIC POWER
Yonden Group Annual Report 2014
2014
Yonden Group Annual Report
Business and CSR Activities
Year ended March 31, 2014
This report was printed on FSC®-certified paper using vegetable oil ink and a waterless printing process.
Printed in Japan
Contents
2
Financial Highlights
4
5
Yonden Group Vision
6
CSR Action Plans
7
8
A Message from the President
13
Yonden Group’s
CSR Activity Policies
An Interview with
the President
Business Activities
14 Electric Power Business
28 Taking on the Challenge of Creating
New Added Value
30 VOICE
32
CSR Activities
33 Promoting Compliance
34 Advancing Environmental
Preservation Activities
38 Practicing Transparent Management
39 Fostering Employee Motivation
Aiming to be a Multi-utility
Corporate Group
Supporting Work and Life
42 Coexisting in Harmony with Communities
44 VOICE
46
Corporate Governance
48
Board of Directors /
Audit & Supervisory Board Members
49
Main Communication Methods at a Glance
50
Outside Opinions
51
86
88
89
Financial Section
orporate Information
C
86 Organization
87 Subsidiaries and Affiliated Companies
Corporate History
Corporate Data and Stock Information
The Shikoku Electric Power Group supplies electric power
to customers in the Shikoku region. Since the establishment of the Company in 1951, we have continued to fulfill
the fundamental mission at the core of our electric power
business of contributing to regional development through
the stable supply of low-cost, high-quality electricity. At the
same time, through our various business activities, we are
also dedicated to helping to improve the lifestyle and culture of the residents of the Shikoku region and contributing
to the economic development of the region.
Editorial Policy
Caution Regarding Business Forecasts and Forward-Looking
Statements
In addition to historical facts regarding Shikoku Electric Power
Company and its subsidiaries and affiliated companies, this report
contains business forecasts and other forward-looking statements.
These statements are based on our assumptions and judgments in
consideration of the information available at the time, and are
therefore subject to risks and contain an element of uncertainty. It
is also possible that such forecasts will be revised at a later date
in light of changes in the operating environment or other
underlying assumptions for the forecasts. We ask that readers
please take these factors into consideration.
Shikoku Electric Power Company (SEPCO) has previously published its annual report
and CSR*1 report separately. For the fiscal year ended March 31, 2013, and onward,
these two reports will be integrated into a single report and published under the title
“Yonden Group Annual Report.” This was done in recognition of the importance of
providing a comprehensive explanation of both our financial activities and our CSR
activities. We hope this will enable stakeholders to better understand the business
operations of the Shikoku Electric Power Group.
For more-detailed data on SEPCO’s environmental preservation activities that
could not be included in this report, please refer to our website.
*1 Corporate social responsibility
“Yonden” is the nickname used to refer to Shikoku Electric Power. This name is well established and commonly used in the Shikoku region. “Yon” is another reading for the Chinese character for four, which is also
used in “Shikoku,” and “den” is a reading for one of the Chinese characters in the word for electricity.
Shikoku Region (As of October 1, 2013)
Area
18,793
km²
Population
3.91
million people
Japan
Shikoku Electric Power (As of March 31, 2014)
Number of Contracts
Power Stations
Substations
2.88
65
208
Converter Station
Distribution Lines
(Power line length)
166,559 km
million
Electricity Sales
28.4
billion kWh
1
Transmission Lines
(Circuit length)
6,377 km
Reporting Period
Publication Date
This report covers activities from the fiscal year ended March 31,
2014. More-current information leading up to the publishing date of
this report has also been included.
The end of August of each year
Scope of Reporting
This report covers SEPCO and its subsidiaries and affiliated companies.
(For more information, please refer to Subsidiaries and Affiliated
Companies on page 87.)
Reference Guidelines for Presentation of
Non-Financial Information
Global Reporting Initiative (GRI) Sustainability Reporting Guidelines
Version 3.1 (G3)*2
Environmental Reporting Guidelines (2012 version), Ministry of the
Environment of Japan
Contact Information
Shikoku Electric Power Company
Corporate Planning Group, Corporate Planning Dept.,
General Planning Division
TEL: +81-87-821-5061 (Receptionist) FAX: +81-87-825-3018
Email: [email protected]
*2 The Global Reporting Initiative is a non-profit organization (NPO) headquartered in the Netherlands
that is devoted to formulating and standardizing international guidelines for sustainability reports. A
number of organizations, including companies, NPOs, accounting federations, investment institutions, and labor unions, participate in the initiative, which has been active since fall 1997.
1
Financial Highlights
Data on Electric Power Business Volume of Electricity Sold
Million kWh
40,000
28,364
1,150
30,000
20,000
17,599
10,000
0
9,615
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
FY
■ Lighting ■ Power ■ Sales to other utility companies
Operating Revenues / Operating Income (Loss) / Net Income (Loss)
Billions of yen
Billions of yen
800
80
636.3
400
40
2.7
0
0
(3.2)
(400)
(800)
(40)
2004
2005
Operating revenues
2006
2007
Operating income (loss) (right scale)
2008
2009
2010
2011
2012
(80)
2013
FY
Net income (loss) (right scale)
Cash Flows
Billions of yen
200
100
2.7
65.7
0
(71.7)
(100)
(200)
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
FY
■ Net cash provided by (used in) operating activities ■ Net cash used in investing activities ■ Net cash (used in) provided by financing activities
Interest-bearing Debt / Shareholders’ Equity Ratio
Billions of yen
%
40
800
737.4
30
600
20.6
20
400
10
200
0
2004
2005
■ Interest-bearing debt
2
2006
2007
Shareholders’ equity ratio (right scale)
2008
2009
2010
2011
2012
2013
0
FY
The operation of all units of the Ikata
Nuclear Power Station has been
suspended since January 2012.
Electric Power Generation and Purchasing by Power
Million kWh
50,000
40,000
31,128 984
2,566
7,124
30,000
20,000
17,354
10,000
0
3,100
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
FY
■ Hydro ■ Nuclear ■ Coal ■ Fuel oil ■ LNG ■ Renewable energy
Capital Investment / Depreciation Expense
Billions of yen
120
90
73.8
66.2
60
30
0
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
FY
■ Capital investment Depreciation expense
Operating Income Margin / Return on Assets* / Return on Equity
%
16
8
0.6
0
0.4
(1.1)
(8)
(16)
2004
2005
Operating income margin
2006
2007
Return on assets
2008
2009
2010
2011
2012
2013
FY
Return on equity * (Ordinary income (loss) + Interest expense) / Average total assets
Dividend per Share / Dividend Payout Ratio / Profit Returned to Shareholders
Yen%
60
120
45
90
30
60
15
30
0
2004
■ Dividend per share
2005
2006
2007
Dividend payout ratio (right scale)
2008
2009
2010
2011*
2012*
Profit returned to shareholders (right scale)
2013*
0
FY
* Dividend payout ratio and profit returned to shareholders for the fiscal years ended March 31, 2012, 2013 and 2014, are not provided due to the recording of a net loss.
3
Yonden Group Vision
Drive Happiness Forward
The Shikoku Electric Power Group (“Yonden Group”) is committed to driving forward the happiness of customers
and community members alike. This desire is shared among all employees, and we are avidly working to contribute to the development of a safer, more secure, and more comfortable regional society as a multi-utility corporate
group supporting work and life.
Mission and Meaning of the Yonden Group
The Yonden Group is committed to the continuous provision of high-quality services, centered on energy,
that interconnect with the lives that people lead. In this way, the Yonden Group contributes both to comfortable,
safe, and reliable living and to the Shikoku region’s development.
Three Key Points in Realizing the Yonden Group Vision
Eco-friendly
Community coexistence
Creating the future
The Yonden Group of the Future
Aiming to be a Multi-utility Corporate Group
Supporting Work and Life
We aim to evolve and grow as the most trusted partner
for customers in the Shikoku region, and as a corporate
group capable of providing one-stop access to a full
range of integrated energy, telecommunications, and
business and lifestyle support services.
Integrated Energy
Three Business Domains
Telecommunications
Three Challenges to Realizing Our Group Vision
1 Contribute to realizing a low-carbon energy society driven by electricity
ursue the best mix of power sources appropriate to the era along with safe and
P
dependable operations
Form reliable electric power networks
Promote a further “shift to electricity” in the residential and industrial sectors
2 Continually strive to create added value beyond the core electric power business
3 Foster the human resources that will pave the way forward
4
Business and
Lifestyle Support
Yonden Group’s CSR Activity Policies
In accordance with the Yonden Group Action Charter, the Group has defined seven priority areas for the focus of
its CSR activities, which it has dubbed the 7 CSR Pillars.
Yonden Group Action Charter
The Yonden Group is committed to its basic stance: coexisting with the community, moving forward with the community,
and prospering with the community. In accordance with this stance, we recognize the importance of strengthening the
bonds of trust with stakeholders who play an important role in supporting our operations and fulfilling our responsibility
to the greater society, which is crucial to our ongoing growth and progress of the Group.
SEPCO has defined the following principles to serve as guidelines for its directors and employees in practicing corporate activities that emphasis compliance, corporate ethics, and transparency. Based on these principles, the Group will
strive to live up to the high expectations of society and gain greater levels of trust.
Our Commitment to Our Customers
We are committed to providing society with useful products
and services, with full consideration for public safety, while
placing our number one priority on customer satisfaction.
We provide safe, stable, reliable, and low-cost electric energy
according to our social mission as an electric power supplier.
Our Commitment to Our Investors
We are dedicated to improving our corporate value continuously over the long term while operating our business in a
sound and transparent manner.
We are committed to the proactive disclosure of accurate information to our investors.
Our Commitment to Our Suppliers
We treat our suppliers as good and reliable partners of equal
standing with whom we engage in free and fair trade.
Our Commitment to Our Employees
We respect the personality and individuality of each employee.
We are committed to providing safe and comfortable working
conditions and to creating a cheerful and open corporate
culture.
Our Commitment to Society
As a full member of society, we shall contribute to the progress
of the communities.
We shall maintain sound and normal relations with statesmen
and government administrators.
We shall stand firmly against antisocial forces that menace civil
society.
Our Commitment to the Planet
We recognize the importance of environmental preservation
and shall strive to minimize the environmental impacts caused
by our business operations.
The 7 CSR Pillars
SEPCO has defined seven priority areas for the focus of
its CSR activities, which have been dubbed the 7 CSR
Pillars. The Group is applying the PDCA (plan–do–
check–act) cycle to ensure the effectiveness of its CSR
activities in these areas.
The 7 CSR Pillars
Realizing a Stable
Electric Supply
Promoting
Compliance
Advancing
Environmental
Practicing
Transparent
Management
Entrenching
a Customer-First
Mindset
Fostering
Employee
Motivation
Coexisting in
Harmony with
Communities
5
CSR Action Plans
The Yonden Group establishes CSR action plans to guide its CSR activities. We are also communicating these
activities to a wide range of stakeholders through this report.
We create a wide range of communication opportunities, and the valuable opinions and requests gained on
these occasions are taken into consideration in our CSR activities. We also confirm the progress of each CSR
activity. The findings of these efforts are consequently incorporated into action plans for subsequent years to
enhance future CSR activities.
Activity Areas
Realizing a Stable
Electric Supply
Promoting Compliance
Provided stable supply of electricity in consideration of the restart of the Ikata Nuclear Power Station
Nuclear power generation
teadily implemented safety measures at the Ikata Nuclear Power Station in response to new safety standards
S
Took steps to raise understanding by the community with regard to safety measures
Thermal power generation
dvanced construction of replacement facilities at Unit No. 2 of the Sakaide Thermal Power Station and impleA
mented stringent safety and quality management measures
Renewable energy
Implemented necessary measures to facilitate grid connections from solar and wind power generation systems
Power network
aintained and strengthened infrastructure for ensuring a stable electricity supply by addressing aging power
M
network facilities and conducting appropriate maintenance and management
Maintained reliability of supply capabilities by conducting efficient countermeasures for aging distribution
facilities
Steadily implemented smart meter introduction initiatives
Compliance
onducted compliance training in consideration of social changes
C
Further promoted Groupwide compliance
Stringent confidential information
security
Comprehensive information
management
Advancing
Environmental
Practicing Transparent
Management
Entrenching a
Customer-First Mindset
Fostering Employee
Motivation
Coexisting in Harmony
with Communities
6
Major Activities in the Fiscal Year Ended March 31, 2014
Energy mix that enables stable
supply and efficient balance
between supply and demand
Instituted e-learning and other educational programs for all employees to strengthen confidential information
management through increased awareness
Reconfirmed confidential information management measures of subcontractors
Steadily instituted measures to promote information security improvements throughout the Group
Global warming prevention measures
Formulated and instituted further CO2 emissions reduction measures in consideration of trends in government
energy and environmental policy
Regional environment preservation
activities
Remained compliant with environmental laws and regulations
Promotion of a recycling-based
society
Promoted effective use of waste
Environmental management
Conducted efficient, effective environmental education
Communication with society
Conducted efficient, effective environmental communication activities
Strengthening of corporate
governance
Implemented effective self-evaluations of work activities
Promoted appropriate risk management
Substantial information disclosure
ontinued actively disclosing information related to the Company’s management, including that pertaining to the
C
nuclear power generation
Improvement of corporate value
through IR activities
eld explanatory forums regarding the Company and tours of power plants and other facilities
H
Disclosed information for investors and analysts
Customer-oriented sales activities
onducted various support activities to improve customer satisfaction
C
Offered proposals and consulting in response to a wide range of energy-use needs
Creation of new value
dvanced Pikara Optical Cable Internet Services on a Groupwide basis
A
Steadily advanced initiatives in the business and lifestyle support business
Investigated possibility of a BoP business (meter recycling business) that entails introducing watt-hour meter
maintenance technologies into the Philippines
Respect for employee individuality
and diversity
Enhanced initiatives for supporting female employees and systematically trained female managers
Development of a comfortable workplace environment
romoted efficient workflow processes and supported work-life balance
P
Improved trust between management and employees by enhancing meetings and information exchanges
Stringent occupational health and
safety measures
ctively promoted Groupwide safety activities
A
Facilitated health maintenance and improvement through healthcare guidance and other initiatives
Proactive promotion of employee
education
ducated the young and middle-rank employees that will support future growth and development
E
Strengthened the onsite capabilities required to support the continuation of the electric power business
Proactive community
development activities
Conducted activities to help invigorate the region
Harmonic coexistence
with communities
Continued promoting harmonic coexistence with communities at all operating sites
Support for the education of the
next generation
Continued providing energy education to the next generation
A Message from the President
Today, the Shikoku Electric Power Group is faced with trials and
changes the likes of which we have not experienced even once
during our long history spanning back to 1951. The trials I speak
of come in the forms of, the tight supply and demand situation for
electricity and the worsening of our performance and financial
position as a result of the suspended operation of all units of the
Ikata Nuclear Power Station. By changes, I refer to the revisions
to regulatory systems for electricity and other factors that are
creating a more competitive operating environment.
In order to overcome the trials we face, we are utilizing thermal
power plants as a substitute source of supply capacity while also
pursuing efficiency and rationalization throughout all areas of
management. At the same time, we are offering our full cooperation
to the inspections being conducted by the Nuclear Regulation
Authority to confirm the compliance of Ikata Unit No. 3 with the
new regulatory standards. We thereby aim to restart this unit at
the earliest date possible. It will of course be important to
strengthen management constitution to ensure responsiveness to
future operating environment changes and guarantee our survival
on a playing field characterized by such change. However, we
must also undertake bold advancement geared toward taking
advantage of the earnings opportunities that will fuel future
growth. Based on this recognition, we will develop and expand
new services that originate from our technologies and other
strengths or from customer needs.
In consideration of these factors, returning to normal operation
and strengthening the management constitution while exploring
growth fields will be positioned as important management
priorities in the fiscal year ending March 31, 2015. The entire
Group will unite as we work to accomplish these goals. In this
endeavor, we will continue striving to fulfill our fundamental
mission of contributing to regional development through the
stable supply of low-cost, high-quality electricity, with the concept
of working for the “public good” always at the forefront of our
minds. This concept has been our guide until today, and we
remain central to our business, no matter how the operating
environment may change. Through such efforts, we hope to
develop our business and organization in a manner that lives up
to the expectations of our various stakeholders.
I would like to ask our stakeholders for their continued
understanding and support of the Shikoku Electric Power Group
Returning to normal operation and
strengthening the management constitution while exploring growth fields will be
positioned as important management
priorities. The entire Group will unite as
we work to accomplish these goals.
as we continue to grow into the future.
August 2014
Akira Chiba
President and Director
7
An Interview with the President
Akira Chiba
Q
What are your thoughts on the fiscal year ended March 31, 2014?
Amidst the difficult conditions created by the prolonged halt of operations at the Ikata Nuclear Power Station, we sought to return
SEPCO to its proper course. To this end, we worked throughout the year to ensure the quick restart of Ikata Unit No. 3 and provide a stable supply of electricity while also pursuing efficiency and rationalization throughout all areas of management and
raising electricity rates.
In the fiscal year under review, the fiscal year ended March 31,
the impact on performance of the rising expenses for purchasing
2014, operations remained stopped at all units of the Ikata
thermal power fuel to compensate for the stop at the Ikata
Nuclear Power Station, our core power source. Nevertheless, we
Nuclear Power Station. By cutting repair costs and other
did everything we could to return SEPCO to its proper course.
expenses, we were able to reduce overall expenses by approxi-
With regard to nuclear power, we hope to resume operations at
mately ¥45.0 billion, much higher than we had anticipated. At
the Ikata Nuclear Power Plant as soon as possible, with safety of
the same time, we gritted our teeth and made the difficult deci-
course being the most important prerequisite for this. After the
sion to raise electricity rates for the first time in 33 years.
Nuclear Regulation Authority released the new regulatory stan-
Nevertheless, the inability to restart operations at the Ikata
dards in July 2013, we were quick to act by submitting the nec-
Nuclear Power Station weighed heavily. In the fiscal year under
essary applications to confirm the compliance of Ikata Unit No. 3
review, we managed to secure a slight profit on the operating
with these standards. We have continued to respond appropri-
level, with consolidated operating income of ¥2.7 billion, but
ately to the inspections by the authority that followed.
consolidated ordinary loss of ¥1.7 billion and consolidated net
As for the electricity supply, the high levels of operation con-
loss of ¥3.2 billion were recorded. These results forced us to
tinued at thermal power plants as we worked to secure the supply
forego dividend payments. It is most regretful that we were
capacity necessary for the high-demand summer and winter
unable to recover performance to a greater degree.
months. We took the utmost care in operating and maintaining
Looking back at the fiscal year under review, this truly was a
thermal power plants, implementing measures to prevent facility
year in which we fought to overcome the trials presented by an
trouble and ensure stable operation. The range of measures we
exceptionally difficult operating environment. Faced with this
instituted were exhaustive, and included delaying periodic
adversity, we pulled together to realize wide-reaching improve-
inspections at thermal power plants on a special-case basis and
ments in efficiency and otherwise strengthen our management
purchasing electricity from other holders of generation facilities.
constitution. These triumphs will form the foundation for the
We somehow managed to continue providing a stable supply of
ongoing growth of the Shikoku Electric Power Group, and will
electricity during the entire year, but we were in a state of crisis
help shape a better future for the Group even in the midst of ever-
throughout the year.
more intense competition.
Looking at income and expenditures, we undertook a widereaching efficiency improvement campaign aimed at lessening
8
Q
Regulatory systems for electricity are undergoing revisions, and the complete deregulation of the retail
electricity market is one revision in sight. How will SEPCO develop its business in light of these changes?
The goal of the revisions to the regulatory systems for electricity is to truly benefit users through a stable supply of low-cost power.
The Shikoku Electric Power Group will continue making contributions toward the accomplishment of this goal. Also, we view
such changes in the operating environment as prime opportunities for the Group to grow further. For this reason, we are leveraging the combined strength of the Group and its management assets to advance new initiatives in various areas geared toward
boosting competitiveness and expanding the range of earnings opportunities available to us.
Part of the regulatory system revisions is the movement toward
Furthermore, in ensuring future business growth, I believe
complete deregulation of the retail electricity market. This
that it will be crucial to secure a competitive position in the
movement took its second major step forward when the revision
generation field, and then effectively utilize this position.
to the Electricity Business Act was approved and enacted by the
SEPCO’s power portfolio is characterized by the high ratio of
National Diet in June 2014. This revision is expected to accel-
electricity provided by affordable sources, such as coal-fired
erate competition in the energy field going forward. The goal of
thermal power. Nuclear power will also represent a high ratio
the series of revisions is to truly benefit users through a stable
when the Ikata Nuclear Power Plant resumes operation. We are
supply of low-cost power. The Shikoku Electric Power Group will
considering various options for utilizing this characteristic of
continue making contributions toward the accomplishment of
our portfolio to access a wider range of earnings opportunities.
this goal while also pursuing ongoing growth. In this endeavor,
Possible options include expanding sales through the Japan
it will be more important than ever that we boost competitive-
Electric Power Exchange and commencing retail sales outside
ness in all business fields and expand the range of earnings
of the Shikoku region.
opportunities available to us, and this must be done while
addressing changes in customer needs and social values.
tive, it is clear that we will need to replace existing power sup-
Looking at operations from a medium- to long-term perspec-
Our core electric power business will be particularly affected
ply facilities and construct new facilities if we are to maintain
by the movement toward deregulation. In order to ensure users
our competitiveness, more so if we hope to become more
choose SEPCO in a free market, we will work to strengthen the
competitive. Taking into account the future electricity supply
connections with customers that we have formed over the years.
and demand situation, we will develop concrete facility
One facet of these efforts will be offering appealing electricity
upgrade plans going forward. Plans will be created based on a
rates. In addition, we will develop a diverse lineup of pricing
comprehensive evaluation of the age of existing facilities, their
plans that match customer usage patterns while offering pro-
generation efficiency, and maintenance and management
posals for our high-quality technical services.
costs, and will also consider options such as alliances with
other companies.
Schedule of Electricity Regulatory System Reforms
Expanded Operations of Cross-regional electrical grids
Expanded Operations of Cross-regional electrical grids will
help secure stable electricity supplies and spread the
introduction of renewable energy systems.
Complete deregulation of the retail and
generation markets
The complete deregulation of the market will offer consumers
a wider range of choices while creating additional opportunities for business operators.
Legal separation* of the power transmission and
distribution sectors to raise impartiality
Increasing the impartiality of the industry and its independence will allow all business operators free access to the
power transmission and distribution sectors.
Phase 1
Scheduled tentatively
for 2015
Phase 2
for 2016
Phase 3
for 2018–2020
Establishment of Organization
for Cross-regional
Coordination of Transmission
Operators, Japan
Complete deregulation of the
retail market
Abolishment of wholesale
regulations
Abolishment of
electricity rate
regulations
Legal separation of
the power transmission and distribution sectors
* Additional provisions included in the revised Electricity Business Act (revised in November 2013) state that legal separation measures will be reworked as necessary during the examination process.
9
Moving on, the Yonden Group describes the goal of our busi-
At the Shikoku Electric Power Group, we view changes in the
ness activities as becoming a multi-utility corporate group sup-
operating environment as prime opportunities for further grow.
porting work and life. Aiming to accomplish this goal, the Group
We are leveraging the combined strength of the Group and its
will pursue new earnings opportunities in the areas of inte-
management assets to transform into a corporate group that
grated energy, telecommunications, and business and lifestyle
customers and the community as well as shareholders, inves-
support services, working always to become a corporate group
tors, and other stakeholders will continue to choose, support,
capable of providing one-stop access to a diverse range of ser-
and trust.
vices. As part of these efforts, we will diligently examine possibilities for creating new services by combining businesses
that were previously advanced separately within the Group.
Q
‌‌The safety and reliability of nuclear power plants is becoming increasingly important. What is SEPCO’s
stance toward nuclear power? Also, what initiatives are you implementing in this area and what do you
believe is necessary for the stable operation of a business using nuclear power?
SEPCO is constantly pursing higher levels of safety with regard to nuclear power. The extreme importance of voluntary and ongoing effort in this area is a fact that is recognized throughout the entire organization, and SEPCO continues to push forward with
its own safety initiatives. I also believe it is important to clarify the duties of public and private entities to ensure that private
companies can conduct stable nuclear power operations, even when faced with competition.
At the moment, we are lending our earnest efforts to advanc-
For the human side, we continually conduct drills to ensure that
ing the inspections being conducted by the Nuclear Regulation
employees are ready for emergency situations.
Authority to confirm the compliance of Ikata Unit No. 3 with
In addition, SEPCO participates in the activities of the
the new regulatory standards. We aim to restart this unit at the
Japan Nuclear Safety Institute, an organization that has
earliest date possible. Compliance with standards is necessary
declared its missions as making Japan’s nuclear power indus-
to operating a nuclear power plant. However, it is not enough
try the safest in the world. Moreover, in the fiscal year ending
to merely comply with government regulations.
March 31, 2015, we will advance initiatives designed to
As a responsible business operator using nuclear power,
strengthen risk management systems and further improve
SEPCO is constantly pursing higher levels of safety. The extreme
safety at the Ikata Nuclear Power Station. Specifically, we
importance of voluntary and ongoing effort in this area is a
have adopted probabilistic risk assessment (PRA) methodol-
fact that is recognized throughout the entire organization, and
ogy with regard to earthquake, tsunamis, and other natural
we are advancing various initiatives accordingly.
phenomenon, and have also established the Nuclear Risk
For example, we began implementing our own voluntary safety
Management Committee*. Guided by the seasoned leadership
initiatives at the Ikata Nuclear Power Station immediately after
of SEPCO’s senior management team, this cross-divisional
the incident at Tokyo Electric Power Company, Incorporated’s
committee shares risk information throughout the organization
Fukushima Daiichi Nuclear Power Station. These initiatives tar-
and steadily advances the measures necessary for improving
geted improved safety in terms of both facility and human ele-
safety. The committee also provides advice to the president to
ments. As facility-based measures, we multiplexed power lines
help him make appropriate management decisions.
for supplying electricity to the Ikata plant from outside sources
and water-proofed various areas of the plant to prevent flooding.
10
* For more information regarding the Nuclear Risk Management Committee, please refer to page 21.
Striving to earn greater trust from the communities in
plans to be formulated and implemented with regard to
which we operate, SEPCO was one of the first in the industry
nuclear power operation. These frameworks will be absolutely
to adopt a prompt, highly transparent disclosure approach.
essential in ensuring that private companies can conduct sta-
Through this approach, which has come to be known as the
ble nuclear power operations even when faced with intensify-
“Ikata System,” any situation that deviates from normal oper-
ing competition in the electric power business.
ation is immediately reported to the local government authori-
ties. This system is often referred to as an example of superior
Strategic Energy Plan, which states that “Nuclear power is an
disclosure in Japan. We also openly communicate with the
important base-load power source” and that it is capable of “con-
local community, conversing directly with the people who live
tributing to stability of energy supply-demand structure.”
nearby the Ikata Nuclear Power Station and soliciting their
Conversely, Japan’s nuclear power industry is currently in need of
opinions. These community-rooted activities have continued
certain frameworks, including systems for compensating for
for a quarter of a century and will be carried on into the future
damages from nuclear power accidents as well as an appropriate
to gain higher levels of trust.
nuclear fuel cycle. These frameworks will be important to ensur-
The Shikoku Electric Power Group will keep advancing the
ing that stable nuclear power operations can be continued over
concerted effort to improve safety of the Ikata Nuclear Power
the long term, and I believe it is important for the duties and
Station and earn greater trust. We also recognize the necessity
responsibilities of public and private entities to be clarified in
for frameworks that will allow for forward-looking business
order for these frameworks to be created.
Q
In April 2014, the Cabinet Office of Japan approved the new
What are your performance forecasts for the fiscal year ending March 31, 2015?
Specific income forecasts have not been formulated due to the inability to establish an outlook with the necessary degree of
accuracy at this point in time. However, what I can say is this: we will work to limit expenses and expenditures as much as
possible in order to depart from recording losses and return to profitability.
In the fiscal year ending March 31, 2015, we expect total elec-
On the income level, however, we have not formulated fore-
tricity sales to decline 1.5% year on year, to approximately 27.9
casts at this point in time. This decision was made in light of the
billion kWh, largely due to the rebound from the highly favorable
difficulty in projecting the timing at which Ikata Unit No. 3, the
temperature patterns seen in the fiscal year under review.
most vital unit of our core power source, will be restarted and an
Regardless, operating revenues are forecast to increase 3.7%, to
inability to estimate the related expenses. When we are able to
around ¥660.0 billion, as a result of the benefits of the electric-
establish a forecast with the necessary level of accuracy, we will
ity rates raise instituted last year and an increase in the fuel price
quickly disclose this forecast.
adjustment amount.
11
While our outlook has yet to be solidified, I am committed to
reliability of our supply capabilities. Repair costs and other
putting an end to the deterioration of our financial base and
expenses are included within the scope of these measures.
departing from recording losses. Returning to profitability in this
However, these emergency outlay postponement measures
manner is essential to maintaining the soundness of our business
have their limits, and cannot be continued for an extended
management. To accomplish this recovery, we will continue pur-
period. In order to stabilize the electricity supply and demand
suing efficiency and rationalization throughout all areas of man-
situation and realize a true recovery in performance, it is critical
agement while also working to limit expenses and expenditures
that we restart Unit No. 3 of the Ikata Nuclear Power Station as
as much as possible. Accordingly, we are developing measures to
early as possible.
postpone any outlays that can be deferred without impacting the
Q
What are your policies for future shareholder returns?
SEPCO’s basic shareholder returns’ policy is to issue stable dividend payments. To accomplish this, we are working to quickly
returning to normal operation and stabilizing our performance and financial position.
SEPCO’s basic shareholder returns’ policy is to issue stable divi-
dend payments. In consideration of this policy, decisions regard-
or other details regarding the resumption of dividends.
ing dividend payments are made based on comprehensive
Nonetheless, all of us at the Shikoku Electric Power Group are
consideration of factors such as performance, financial position,
doing our best to return SEPCO to normal operation and ensure
and medium- to long-term projections for the operating environ-
that dividend payments can be resumed at the earliest date pos-
ment. For the fiscal year under review, the prolonged halt of
sible. We are simultaneously advancing forward-looking initia-
operation of all units of the Ikata Nuclear Power Station contin-
tives, including preemptive measures to respond to changes in
ued to place significant downward pressure on our performance
the operating environment, such as the complete deregulation of
and financial position. These results forced us to forego dividend
the retail electricity market.
payments. It is most regretful that we were unable to live up to
the expectations of our shareholders in this regard.
our shareholders and other investors to look at SEPCO from a
medium- to long-term perspective. I hope we can expect your
Our basic shareholder returns’ policy will not change, and we
will continue working toward the quick resumption of dividends
to enact this policy. However, this will require that we return to
normal operation and stabilize our performance and financial
position as soon as can be done.
12
At this point in time, I am unable to offer a specific schedule
As we boldly face the uncertainty to come, I would like to ask
continued support and understanding into the future.
Business Activities
As its mission, the Yonden Group is committed to the continuous provision of highquality services, centered on energy, that
interconnect with the lives people lead. In
this way, the Yonden Group contributes to
comfortable, safe, and reliable living and to
the Shikoku region’s development. The Group
implements business management based on
the view its business activities themselves
fulfill a social responsibility.
This section provides an introduction
to the business activities of the Yonden
Group and an integrated account of
how they relate to the seven pillars of
CSR initiatives, with particular emphasis placed on the pillars of “realizing a
stable electric supply” and “entrenching a customer-first mindset.”
14
Electric Power Business
16 Nuclear Power Generation
22 Thermal Power Generation
24 Renewable Energy
26 Power Network
27 Sales Activities Reflecting a Customer-First Mindset
28
30
Taking on the Challenge of Creating New Added Value
VOICE
13
Business Activities
Electric Power Business
In a resource-poor country like Japan, over the long term, it is absolutely essential to realize the S+3Es (safety + environmental preservation, energy security,
and economic growth), the three basic goals of national energy policy and of the
electric power business.
Shikoku Electric Power realizes a stable, low-cost electricity supply by having
established an energy mix that is not overdependent on any one fuel source and
by responding to changes in demand through the maintenance of an efficient
balance between supply and demand that takes into consideration the characteristics of different power sources. Another factor behind realizing such a supply is
the ongoing pursuit of efficiency throughout all areas of management.
16 Nuclear Power Generation
22 Thermal Power Generation
24 Renewable Energy
26 Power Network
27 Sales Activities Reflecting
a Customer-First Mindset
Major Operating Sites
Shikoku Electric Power Facilities
Nuclear Power Generation
Other Facilities
Page
16
Nuclear Power Station
Breakdown of Electric Power
Generation and Purchasing by
Power Source
Transmission Line
(500 kV)
■ Renewable Energy
Transmission Line
(187 kV)
■ Hydro
984 MkWh
(3.2%)
Substation
(over 500 kV)
Capacity of Electric Power
Generation and Purchasing by
Power Source
Substation
(over 187 kV)
2,022 MW
(23.9%)
2 MW
(0.0%)
■ Hydro
31,128
8,456
1,471 MW
(17.4%)
MkWh
C / DC Converter
A
Station
■ Nuclear
■ Renewable Energy
3,100 MkWh
(9.9%)
MW
Head Office
Branch Office
Thermal Power Generation
Page
22
Thermal Power Station
■ Thermal
■ Thermal
27,044 MkWh (86.9%)
■ Coal: 17,354 MkWh (55.8%)
■ Fuel oil: 7,124 MkWh (22.9%)
■ LNG:
2,566 MkWh (8.2%)
Other Companies
Transmission Line
(500 kV)
Transmission Line
(187 kV)
4,961 MW (58.7%)
■ Coal:
2,270 MW (26.8%)
■ Fuel oil: 2,045 MW (24.2%)
■ LNG:
646 MW (7.6%)
Honshu–Shikoku line
[Electric Power
Development Co., Ltd.]
Sakaide 1 2 3 4
Head Office
Takamatsu Branch Office
Takamatsu
Asa
Kagawa
Okawa
Naruto
Sanuki
Niihama
Kita-Matsuyama
Nyugawa Branch Office Toyo
Matsuyama
Saijo 1 2
Matsuyama
Ozu
Omogo
Daisan
Hongawa
Bunsui Daiichi
Odo
Kagedaira
Kokufu
Hirono
Hirayama
Anan 1 2 3 4
Anan
converter
station
Anan–Kihoku DC transmission line
[The Kansai Electric Power Co., Inc.,
Electric Power Development Co., Ltd.]
Kochi
Kochi
Branch Office
24
Naharigawa
Hiromi
ydro Power Station
H
(over 20 MW)
Awa
Tachibana-wan
Yanadani
Page
Ikawa
Matsuogawa Daiichi
Kawauchi
Renewable Energy
Tokushima Branch Office
Ikeda Branch Office
Matsuogawa Daini
Matsuyama
Branch Office
Ikata 1 2 3
Mishima
Saijo
Naruto–Awaji line
[The Kansai Electric
Power Co., Inc.]
Muroto
Uwajima
Branch Office
Nakamura
Branch Office
hotovoltaic Power
P
Station
14
Wind Power Station
Hydro Power
Stations
Thermal Power
Stations
Nuclear Power
Station
Photovoltaic Power
Station
Wind Power Station
Total
58 locations
1,143MW
Transmission Lines
4 locations
3,797MW
1 location
2,022MW
Substations
Converter Station
Distribution Lines
1 location
2.0MW
1 location
65 locations
0.3MW
6,964MW
(Route length) (Circuit length) 208 locations 1 location
(Route length) (Power line length) * Overlapping lines excluded
3,398km
6,377km
20,827MVA
1,400MW
45,478km*
166,559km
(As of March 31, 2014)
Energy Mix That Enables Stable Supply
Japan is only self-sufficient for 5% of its energy. This low rate results
in high exposure to risks associated with rising fossil fuel prices and
an overdependence on certain countries and regions for resource
procurement. Renewable energy, such as solar power and wind
power, is susceptible to the weather and other natural conditions,
and there are issues regarding the technological and cost aspects of
such initiatives.
Looking at this situation, it is clear that, if a stable supply of energy
is to be secured into the future, it is absolutely essential to strike a
balance among the 3Es—the three basic goals of energy policy. Even
before this though, we must ensure safety. The Company therefore
adopts a S+3Es perspective to include this extra element of safety.
Shikoku Electric Power has progressively diversified its energy mix
to include various different fuel sources. As a result, on March 31,
2014, nuclear power, coal, and oil each accounted for around 25%
of our generation capacity; liquefied natural gas (LNG) accounted for
8%; and the remaining 17% came from hydropower. In this manner,
we have established a balanced energy mix. Currently, due to the
effect of the accident at the Fukushima Daiichi Nuclear Power
Station (Tokyo Electric Power Co., Inc.), we have stopped all units of
the Ikata Nuclear Power Station. However, this situation may soon
change. In April 2014, the Cabinet Office of Japan approved the new
Strategic Energy Plan, which states that “Nuclear power is an important base-load power source” and that it is capable of “contributing
to stability of energy supply-demand structure.” The Company maintains its stance toward utilizing nuclear power to a certain degree to
realize goals for the 3Es. We, of course, are absolutely committed to
ensuring safety (S) in this undertaking.
in terms of operation methods and economic efficiency, which we
can leverage in response to electricity demand fluctuations. In this
way, we are pursuing efficient power supply. For example, in summer,
the season when power consumption is highest, we primarily utilize
economically sound energy sources that can be generated stably such
as nuclear power and natural-inflow-type hydropower. We then
respond to supply deficiencies by using output from thermal power
generation, which we can raise and lower flexibly.
In consideration of supply and demand requirements over the full
year, we conduct periodic inspections of facilities in the spring and
fall months, when electricity demand is low. This allows us to ensure
that electricity can be supplied stably even if an accident or some
other sudden occurrence were to happen.
Improvement of Management Efficiency
SEPCO’s operating environment will continue to change into the future,
with the most significant change on the horizon being the impending
complete deregulation of retail electricity sales. To ensure we will be
able to respond to such developments, we are working to boost competitiveness while at the same time strengthening SEPCO’s management
constitution by cutting costs and improving operational efficiency.
Specifically, we have established the Management Reform Ad
Hoc Committee, chaired by the president. Under the guidance of this
committee, we will evaluate the effectiveness of efficiency reforms
implemented to date and take other steps to strengthen our management constitution. For example, the following priority issues have
been identified: reducing procurement costs by more frequently holding open bids and increasing labor productivity by streamlining staff.
We will accelerate Groupwide initiatives geared toward addressing
these and other issues in the pursuit of stronger management.
Breakdown of Power Generation by Power Source
FY
1973 First oil crisis
(generation centered on oil)
1955
1994 Start of Ikata Unit No. 3 operation
▼
Rise in nuclear power generation
1975
100
80
60
2000 Start of Tachibana-wan Thermal
Power Station operation
▼
Rise in coal-fired thermal power
generation
1995
2010
2011 Sequential halt of Ikata operation
▼
Drop in nuclear power generation
40 2011
20 2013
0
0
56
0
20
8
40
60
23
80
10 3
2012 Stoppage of all facilities at Ikata
Nuclear Power Station
▼
No nuclear power generated
100 %
Cost Reduction Measures (Fiscal Year Ended March 31, 2014)
Cost Area
Reduction
Targets*1
(Average for
FY2013−2015)
Reductions in
FY2013
Personnel
expenses
¥9.7 billion
¥10.5 billion
educing salaries and director compensation
R
Curtailing welfare systems
Cutting expenses related to outsourcing meter
reading, payment collection, etc.
L owering fuel procurement costs
Revising procurement agreement conditions
and procurement timing
Negotiating rate reductions on electricity
purchases
Utilizing the Japan Electric Power Exchange, etc.
Fuel and power
purchases
(Fuel costs,
electricity
purchases)
¥2.6 billion
¥4.9 billion
Repair costs
¥7.1 billion
¥14.3 billion
Depreciation and
amortization
¥1.0 billion
¥0.0 billion
■ Nuclear ■ Coal ■ LNG ■ Fuel oil ■ Hydro ■ Renewable energy
Efficient Balance between Supply and Demand
As electricity generally cannot be stored, it is necessary to constantly
balance supply with demand. Therefore, we must facilitate the
efficient supply of electricity by developing a well-balanced energy
mix consisting of various energy sources with differing characteristics
Other expenses
Total
¥7.7 billion
¥15.6 billion
¥28.1 billion
(¥41.2 billion)
¥45.3 billion
Hydropower from
pump-storage
facilities
Hydropower
from reservoirs
①Used during peak hours
Oil-fired thermal
LNG thermal
②Fluctuating usage
Coal-fired thermal
Natural-inflow-type hydropower
③Base
Nuclear
0
5
12
18
24 Time
① Quickly producible hydropower from reservoirs and
pump-storage facilities
used during peak hours
②T
hermal power from LNG
and oil used on a fluctuating basis due to ability to
flexibly adjust output
③E
conomically sound and
stable nuclear power, natural-inflow-type hydropower,
and coal-fired thermal power used as base
Hydropower from
pump-storage facilities:
Electricity generated at night used to pump water into upper reservoirs so that it may be released for generation during peak hours
Hydropower from reservoirs:
Reservoirs established and used for generation as necessary
Natural-inflow-type hydropower:
Power generated by diverting river flow through canals
Percentage of
orders
conducted
through open
bids
¥7.5 billion
15%*2
educing procurement and transaction prices
R
by reevaluating the effects of conducting
open bids and revising ordering methods
Revising construction schedules, examining
construction plans, etc.
educing procurement and transaction prices
R
by reevaluating the effects of conducting open
bids and revising ordering methods
Revising schedules, examining workflow
processes
Reducing rent fees and training expenses
Cutting costs related to demand cultivation
Reducing research expenses
Decreasing donations, membership fees, etc.
¥3.8 billion
educing procurement and transaction
R
prices by reevaluating the effects of
conducting open bids and revising ordering
methods
Revising construction schedules, examining
construction plans, etc.
14%
tilizing simpler and more widely applicable
U
specifications
Revising construction plans (identifying
construction that can be ordered through
open bids)
Employing new suppliers, etc.
Electricity Generation by Time of Day (Summer)
Capital
investment
Major Initiatives
*1Reduction targets are the targets announced when submitting an application to raise electricity
rates in February 2013. The figure in parentheses under total includes a reduction of ¥13.1 billion
in assessment fees.
*2The target for the percentage of orders conducted through open bids is 15% to be accomplished
by March 31, 2016 (the end of the period for which cost assumptions were submitted when applying for approval to raise electricity rates). The Company will aim to increase this ratio to 30% within
the three-year period beginning on April 1, 2016.
15
Business Activities
Nuclear power can be generated in an economically efficient manner,
and does not emit CO2 or other hazardous substances. In these ways,
nuclear power helps establish a constant supply of low-cost, high-quality
electricity while contributing to the realization of a low-carbon society. In
addition, uranium, the fuel used in nuclear power generation is procurable from several different countries with secure political conditions. This
makes the procurement of stable resource supplies another one of
nuclear power’s advantages.
Ikata Nuclear Power Station
Enhancing the Ikata Nuclear Power Station’s Safety and
Pursuing Initiatives to Resume Operations Early
The Yonden Group’s most important mission is to provide customers
with stable supplies of low-cost, high-quality electricity. To realize
this mission, we believe that continuing to use a certain amount of
nuclear power is indispensable. With safety as its overriding premise,
nuclear power supplied approximately 40% of Shikoku’s electricity
before the Great East Japan Earthquake.
Therefore, we hope to resume nuclear power generation as soon
as possible. In July 2013, we submitted an application to the Nuclear
Regulation Authority to confirm the compliance of Ikata Unit No. 3
with the new regulatory standards. We will earnestly respond to the
inspections by the Nuclear Regulation Authority and the issues identified through these inspections. At the same time, we will continue
to practice thorough information disclosure to gain the understanding of local communities.
TOPIC 1
Inspections to Confirm Compliance of Ikata Unit No. 3 with the New Regulatory Standards
Policies of New Regulatory Standards
The regulatory standards for nuclear power plants previously only
addressed natural disasters, such as earthquakes and tsunamis.
The July 2013 revision to these standards not only made existing
requirements much more stringent, it also introduced the new
requirement for measures for preventing accidents from growing to
Previous Regulatory Requirements
New Regulatory Requirements (July 2013)
Provisions for preventing severe accidents
Measures to prevent accidents from developing into severe accidents
Power companies responsible for voluntary implementation of severe accident
response measures
Consideration of natural phenomena
Reliability of power supply
Cooling measures
Fire protection
Seismic / tsunami resistance
16
be so such that service exceeds the capacity of design-basis safety
measures. In addition, provisions must now be formulated for natural phenomena like tornadoes and volcanic eruptions as well as
unforeseen events such as intentional aircraft strikes.
Severe accident prevention measures
(measures to prevent reactor damage, etc.)
Response to intentional aircraft strikes
More-diverse natural phenomena countermeasures
(tornadoes, eruptions, etc.)
Reliability of power supply
Cooling measures
Fire protection
Seismic / tsunami resistance
New
requirement
New
or
Stricter
requirements
Stricter
requirement
Necessary Approval and Inspection Items for Confirming Compliance with Regulatory Standards
Aiming to confirm the compliance of Ikata Unit No. 3 with the new
regulatory standards, the Company submitted the necessary applications for approval to the Nuclear Regulation Authority in July
2013. This included applying for permission for a change in reactor installation license, approval of our plan for construction works,
and approval of operational safety programs.
Inspections by the Nuclear Regulation Authority examine 27
items divided into the two broad categories of plant-related factors
and earthquake-, tsunami-, and volcano-related factors.
Necessary Approval and Inspection Items for Confirming Compliance with New Regulatory Standards
Approval necessary to confirm compliance
Permission for change in
reactor installation license
Approval of plan for construction works
Approval of operational safety programs
Approval of basic measures and policies
Approval of detailed design
Approval pertaining to operational management
pertaining to facilities and internal systems
plans related to reactor facilities
methods, procedures, and systems
Categories
Important Inspection Items
Probabilistic risk assessment
Verification analysis (reactor core damage prevention)
Severe accidents
Verification analysis
(containment vessel damage prevention)
Verification analysis
(measures for spent fuel pool when reactor is stopped)
Quantitative evaluation of risks of severe accidents resulting from damage to reactor core
or containment vessel and verification analysis of accident countermeasures
Analysis code
Emergency response headquarters and control office
Internal flooding
Plant-related
Internal fires
Design-basis accident
countermeasures
External fires
Evaluation and verification analysis of safety measures
for newly added natural phenomenon
Tornadoes (evaluation of impacts and countermeasures)
Volcanoes (countermeasures)
Evaluation of seismic resilience and durability
Construction plans
Evaluation of equipment and facilities for responding to
severe accidents
Evaluation of reactor facilities, including newly installed safety measures
Organization and structures
Education and training
Safety regulations
Limiting conditions for operation (LCO) /
Allowed outage time (AOT)
Evaluation of operational management methods, procedures, and systems (human elements)
Response manuals for severe accidents
(including those with wide-spread damage)
Fault crush zones on
premises
Fault crush zones on premises
Earthquake-, tsunami-, and volcano-related
Subterranean structure of premises and surrounding area
Standard earthquake ground motion
with specified epicenter for each part of the plant
Seismic activity
without specified epicenter
Evaluation of theoretic maximum magnitude of earthquakes that could impact the plant
Design-basis earthquake resistance measure policies
Tsunamis
Standard tsunami size
Design-basis tsunami resistance measure policies
Stability of foundations and
Stability of foundations and slopes
slopes
Volcanoes
Evaluation of impacts of volcanic activity
17
Business Activities
Measures Regarding Major Inspection Items (As of May 23, 2014)
(1) Evaluation of Standard Earthquake Ground Motion
Plants are evaluated based on two types of standard earthquake ground
motion: standard earthquake ground motion with specified epicenter
and standard earthquake ground motion without specified epicenter.
In evaluating standard earthquake ground motion with specified
epicenter for each part of the plant, earthquakes are first selected
for examination purposes. Specifically, inland crustal earthquakes,
oceanic intra-plate earthquakes, and inter-plate earthquakes are
considered. These earthquakes are evaluated using both response
spectrum methodology*1 and earthquake ground motion analysis
methodology employing fault models*2.
Meanwhile, standard earthquake ground motion without specified epicenter is evaluated by considering the possible existence of
unidentified points that could become potential epicenters and
cannot be determined through detailed studies of the area surrounding a nuclear power plant. Of the 16 earthquakes included in
the Nuclear Regulation Authority’s guidelines, we are conducting
these evaluations based on the possibility of an earthquake mirroring the one that struck the southern part of the Rumoi area in
Hokkaido during 2004.
*1. Response spectrum methodology: An empirical methodology that evaluates the possible vibration that might be felt by a theoretical earthquake with a specific epicenter. This methodology
examines its distance from potential earthquake epicenters and the type of ground that the vibration would be transmitted through to determine how a specified point would be impacted by
a theoretical earthquake.
*2. Earthquake ground motion analysis methodology employing fault models: A highly precise
methodology that evaluates the vibration that would be felt at a specific location by first modeling a fault as a flat plain and then dividing this plain into different subsections. The vibration to
be felt by the determined location is evaluated by examining how vibrations from the different
subsections would intermingle during a theoretical earthquake.
Process for determining standard earthquake ground motion
Standard earthquake ground motion with specified epicenter for each part of the plant (based on detailed studies)
Earthquake type
Inland crustal earthquakes
Oceanic intra-plate earthquakes
Standard earthquake ground motion without
specified epicenter
(based on the possible existence of
earthquake threats that could not be
identified through detailed studies)
Inter-plate earthquakes
Analysis based on each earthquake mechanism
Selection of model earthquakes for examination (compare impacts on premises)
Selection of model
earthquakes for
examination
Earthquake ground motion
evaluation
Earthquake from fault system running
through the ocean floor in front of plant
Inland crustal earthquake
Aki-Iyo Earthquake
Oceanic intra-plate earthquake
Earthquake ground motion evaluation based on
response spectrum methodology
Formulation of standard
earthquake ground motion
Selected from the 16 earthquakes contained
in inspection guidelines based on
consideration of the nature of the plant’s
foundation
Great Nankai Trough Earthquake
Inter-plate earthquake
Earthquake ground motion analysis methodology
employing fault models
Formulation of standard earthquake ground motion
Inland Crustal Earthquakes and Oceanic Earthquakes
Inland crustal earthquakes occur when two plates grind against one
another, and the bedrock of the inland plate crumbles, resulting in
vibration.
Oceanic earthquakes include oceanic intra-plate earthquakes,
which occur from inside sinking oceanic plates, and inter-plate
earthquakes, which occur at the boundaries of two plates.
Inland crustal
earthquake
Ocean trench
Inland plate
Oceanic plate
Oceanic intra-plate
earthquake
arthquakes Selected for Evaluating Standard Earthquake
E
Ground Motion with Specified Epicenters
Of the model earthquakes selected for evaluating standard earthquake ground motion with specified epicenter, it was determined
that the earthquake with the greatest potential to impact the Ikata
Nuclear Power Station was an earthquake originating from the fault
system running through the ocean floor in front of the plant.
We evaluated standard earthquake ground motion using this
earthquake, with our primary focus placed on an earthquake with
vibrations reaching 480 km (from Wakayama Prefecture to Oita
Prefecture), while taking a conservative approach to the many
uncertain variables.
(2) Evaluation of Standard Tsunami Size
In evaluating the potential impact of a tsunami on the Ikata Nuclear
Power Station, we used as models theoretical tsunamis occurring
from an earthquake from the fault system running through the ocean
floor in front of the plant, an earthquake in the Nankai Trough, and
a landslide along the Iyo-nada coastline.
The tallest tsunami predicted has been determined to be one
resulting from simultaneous tsunamis occurring from an earthquake
from the fault system running through the ocean floor in front of the
plant and landslide along the Iyo-nada coastline. The maximum height
of such a combined tsunami has been calculated to be 8.12 m (a
18
Inland crustal earthquake (earthquake from
fault system running through the ocean floor
in front of plant)
Oceanic intra-plate earthquake
Japan Median Tectonic Line and Beppu—Haneyama Fault Line
Aki-Iyo Earthquake of 1649
Ikata Nuclear
Power Station
Great Nankai Trough Earthquake
report to this extent was submitted to the Nuclear Regulation Authority
on May 16, 2014). However, the Ikata Nuclear Power Station would
be safe from such a tsunami, as it resides 10 m above sea level.
Landslide Locations Used for Evaluating Size of Tsunami Resulted
from Landslide along the Iyo-nada Coastline
Landslide location
Ikata Nuclear
Power Station
TOPIC 2
Safety Measures at the Ikata Nuclear Power Station in Light of the Accident at the Fukushima
Daiichi Nuclear Power Station
(1) Preparing for Earthquake Ground Motion
at each unit. We have newly installed four air-cooled generators for
emergency use on a terrace 32 meters above sea level. Further, we
have laid two new distribution lines connecting to a substation 95
meters above sea level. In addition, by fiscal 2015 we plan to
install equipment for receiving electricity from external power
sources, for use in emergencies in which we are unable to use
emergency gas turbine generators or existing equipment for receiving electricity from external power sources.
The Ikata Nuclear Power Station is anchored on solid bedrock,
ensuring that it will feel less vibration during an earthquake than
buildings in the surrounding areas. In addition, we have improved
the quake resistance of important safety equipment (see the diagram at the bottom of the page), and have determined that this
equipment is fully capable of withstanding earthquake ground
motion of 1,000 Gals. For equipment requiring additional measures, we are taking appropriate action. Having completed measures for Unit No. 3, we aim to complete measures for Unit No. 1
and Unit No. 2 by fiscal 2015.
(4) Realizing Stable Cooling
Before the accident at Fukushima, the Ikata Nuclear Power Station
was already diversifying piping and pump trucks for supplying coolant to fuel rods and other crucial areas of the plant as well as pump
power sources. As new measures, we have added pump trucks that
can supply water from fresh water tanks or the sea, backup seawater pump motors, and replacement components for submerged
motor pumps and water injection pumps.
Differences in Vibration Transmission
Standard buildings
Nuclear power plants
(5) Ensuring Readiness for Major Accident
Surface subsoil
We have installed equipment to mitigate the effect of severe accidents—such as damage to fuel rods within the nuclear reactor—
including equipment that prevents hydrogen explosions by
processing hydrogen accumulated within the nuclear reactor containment vessel. Also, we have added water cannons that curb the
release of radioactive materials. In addition, we plan to install venting equipment with filters that will be able to extract a certain
amount of air while filtering out radioactive material, even if pressure within the nuclear reactor containment vessel has risen to
abnormal levels.
Epicenter
Bedrock
Vibrations transmitted through bedrock have force of only
1/2–1/3 of those transmitted through surface subsoil.
Source: Safe Seismic Resistance for Nuclear Power Plants, Nuclear and Industrial Safety Agency, etc.
(2) Preventing Flooding
To prevent flooding, we have installed watertight doors, and taken
other measures to ensure the Ikata Nuclear Power Station can even
withstand tsunamis that climb to heights around 14 meters. In
addition, we have installed waterproof seals to improve the water
tightness of areas where piping passes through the walls.
(6) Preparing for Natural Disasters
As a precautionary measure for tornadoes, we have developed provisions for preventing damage from tornado-generated missiles with
an assumed wind speed of 100 meters per second, the highest ever
recorded in Japan. As a fire precaution, we clear-cut all trees within
a 35 meter radius of the Ikata Nuclear Power Station and applied
mortar to the area to prevent fires in the surrounding areas from
spreading to the plant.
(3) Securing Power Sources
Before the accident at Fukushima, the Ikata Nuclear Power Station
already had seven power transmission lines able to supply electricity for external sources and two diesel generators for emergency use
(7) Conducting Training
Important Safety Equipment, Hydrogen Processing Equipment, and Venting Equipment with Filters
Hydrogen
processing
equipment
Air outlet
Important safety
equipment
Steam
Ascending
current
Catalyst
plate
Air inlet
Hydrogen
Air Steam
Hydrogen and
oxygen react to
create steam,
thereby
reducing hydrogen
Exhausts after filters absorb
radioactive materials within nuclear
reactor containment vessel
Exhaust
Containment structure
Steam generator
Reactor
support
facilities
Residual
heat removal
facilities
Residual
heat
removal
pump
Reduces
radioactive
materials
Reactor
vessel
Venting equipment
with filters
Pressurizer
We continually conduct drills of emergency scenarios to improve emergency
response capabilities. These drills include
those that use simulators to test our ability
to address a complete loss of power as well
as training for responding to accidents
during the night hours.
Steam
Turbine
Generator
Control rods
Water
Fuel
Primary coolant pump
Condenser
Wastewater port
Waterintake port
(sea water)
19
Business Activities
Adjustment of Operational Management and Maintenance
At the Ikata Nuclear Power Station, we monitor the operational status of
facilities 24 hours a day; conduct regular inspection tours; and every 13
months, stop operations of the power station to conduct periodic inspections in accordance with the law.
Further, in relation to inspections and maintenance, we are conducting initiatives to optimize the inspection frequency for each piece
of equipment based on rational, scientific methods. Specifically, we
are introducing reliability-centered maintenance (RCM) and conditionbased maintenance (CBM). RCM seeks to rationalize maintenance
work by analyzing how much the failure of a given piece of equipment
would impact the plant as well as its usage frequency, installation
conditions, failure history, and other factors. Appropriate maintenance
methods and inspection schedules
are then developed. CBM involves
maintenance work that includes
monitoring the facility operating
status from the vibration and lubrication of the machinery in order to
detect early signs of irregularities
and stepping up monitoring or conOne of our operational personnel
ducting overhauls accordingly.
during an inspection tour
Advancing Preventative Maintenance Based on Long-Term
Perspectives and Responding to Regulations for Facilities
More Than 40 Years Old
We are implementing initiatives geared toward keeping the Ikata
Nuclear Power Station in sound condition so that it may continue operating safely and stably over the long term. To this end, we periodically
conduct preventative maintenance in accordance with plans, which
includes inspecting equipment or upgrading it through large-scale construction and engineering work. We base these efforts on information
gained from examples of operations and incidents from Japan and overseas. Units No. 1 and No. 2 have been in operation for over 30 years.
For both units, we have replaced important large components including
steam generators, internal structures of the nuclear reactor, the cover of
the reactor vessels, and low-pressure turbines. We have also undertaken
general digitization work related to the central control panels.
The Nuclear Reactor Regulation Law permits the extended operation for a period not exceeding 20 years of nuclear reactors that have
Preventative Maintenance Conducted on Ikata Units No. 1 and No. 2
Containment structure
Steam generator
Reactor
vessel
2
Pressurizer
1
Water
Control rods
1
3
Primary
coolant
pump
Thorough Training Programs for Operational and
Maintenance Staff
We implement thorough training programs for our operational and
maintenance staff. At the Nuclear Research & Training Center located
in Matsuyama City in Ehime Prefecture, employees learn the proper
procedures to be undertaken under normal operating conditions and
in a number of simulated emergency situations involving malfunctions
or accidents. Utilizing facilities built to the same specifications as
those used at the plant, employees are thoroughly drilled on each step
of these procedures, helping them improve their skills and knowledge
while also conditioning them to respond calmly and accurately under
even the most extreme circumstances and fostering teamwork.
Operational training using simulator
Training on steam generator
eddy-current testing
Commitment to Information Disclosure
We are fully committed to disclosing information on nuclear malfunctions and other issues at the Ikata Nuclear Power Station. Any situation that deviates from normal operation is immediately reported to
the Ehime prefectural government and the town of Ikata. The Ehime
prefectural government then evaluates the gravity of our report and
formulates a public disclosure based on one of three categories that
it has established. We subsequently make public announcements in
line with the prefecture’s formulation. This prompt, highly transparent
disclosure approach has become known in Japan as the “Ikata
System,” and is often referred to as an example of superior disclosure. Further, in June 2013 there was a delay in notification about
deposits on the fuel assembly of Unit No. 3 of the Ikata Nuclear
Power Station. In light of this incident, we are doing our utmost to
prevent a recurrence of such an incident. For example, at the Ikata
Nuclear Power Station we have deployed a dedicated manager with
overall control of notifications to strengthen notification systems and
clarify responsibility. Also, in June 2011, we began expanding the
range of entities to which we report “class A” incidents, those requiring immediate disclosure. We now report such incidents to all cities
and towns in Ehime Prefecture and to the prefectural governments of
Kagawa Prefecture, Tokushima Prefecture, and Kochi Prefecture.
Notifications to Ehime Prefecture and Ikata Town Based on Safety
Agreements
2
20
eplacement of steam
R
generator
been in operation for more than 40 years. Based on efforts to comply
with new regulatory standards and enhance safety even further, we
intend to utilize the Ikata Nuclear Power Station effectively for as
long as possible by continuing to reflect the latest knowledge and
technology promptly in operations.
eplacement of cover of
R
reactor vessel
3
eplacement of internal
R
structures of nuclear reactor
FY
2004
2005
2006
2007
2008
2009
2010
2011
2012
Class A
7
9
5
7
2
9
4
2
1
2
Class B
8
7
5
11
5
8
11
5
2
3
Class C
35
23
23
30
26
30
29
26
18
12
Total
50
39
33
48
33
47
44
33
21
17
2013
Overview of public notification in Ehime Prefecture
Class A (Trouble, etc., that needs to be reported to the government): Immediate public notification
Class B (An abnormal situation at a facility, etc., has occurred within the radiation administrative
region): Public notification within 48 hours
Class C (Events other than those covered by classes A and B above): Public notification on the
10th of every month about the previous month’s events
Conclusion of Memorandums with Municipal Authorities
around the Ikata Nuclear Power Station
Fostering Understanding in the Surrounding Communities
Since 1988, we have been conducting a dialogue initiative in which
employees visit all of the residents in the town of Ikata and the city of
Yawatahama to explain safety measures for the Ikata Nuclear Power
Station and receive a variety of feedback from residents firsthand.
Since the fiscal year ended March 31, 2012, aiming to respond
to the increased concern about the safety of nuclear power plants, we
have expanded the scope of
these efforts to include residences located within a 20 km
radius of the Ikata Nuclear
Power Station. Going forward, we
will continue to communicate
with community members in this
expanded area.
Conversing with the community
To give greater peace of mind to the residents of the local communities in the areas surrounding the Ikata Nuclear Power Station, we
concluded memorandums on ensuring the safety of the areas surrounding the Ikata Nuclear
Power Station with Ehime
Prefecture and the three cities
of Yawatahama, Ozu, and Seiyo
in September 2012. We believe
the memorandum will enable
us to intensify communication
with local municipalities and
manage operations in concert Concluding memorandum with Ehime
Prefecture and three cities in the area
with local communities.
surrounding the Ikata Nuclear Power
Station
Voluntary Initiatives to Improve Safety at the Ikata Nuclear Power Station
In order to further improve the safety and reliability of the Ikata
Nuclear Power Station, we are strengthening risk management functions related to nuclear power safety. These efforts are designed to
facilitate the implementation of safety improvement measures based
on risk analyses.
Nuclear Safety Risk Management Structure
President
Nuclear Risk Management Committee
Advice
Division Manager of
Nuclear Power Division
Major Initiatives
W
e are applying probabilistic risk assessment (PRA)*1 methodology to phenomenon that have a low likelihood of occurrence but great potential to impact society
should they occur.
SEPCO established the cross-divisional Nuclear Risk Management Committee to
share risk information compiled based on PRA methodology throughout the
Company and provide advice to the president to help him make appropriate management decisions.
We volunteered Ikata Unit No. 3 to the Nuclear Risk Research Center*2 as a
model plant for researching PRA.
Internal Nuclear
Quality Assurance
Audit Dept.
Auditing
PRA-based risk management
Risk information → Risk assessment
(PRA)
*1. Probabilistic risk assessment (PRA):
Using PRA methodology, one first examines the equipment and systems that make up an entity to
analyze and evaluate the potential accidents and malfunctions that could occur. The next step is
to comprehensively identify the combinations of initiating events and losses of safety functions
that could culminate in accidents and malfunctions, and then quantifying the likelihood of occurrence and the magnitude of the damages of specific initiating factors.
*2. Nuclear Risk Research Center:
The Nuclear Risk Research Center is an organization created within the Central Research Institute
of Electric Power Industry to research the occurrence mechanisms of earthquakes, tsunamis, and
other low-frequency phenomena, and reduce the risks associated with these phenomena through
PRA methodology.
P
Plan
A
Act
D
Do
C
Check
Nuclear Power from the Perspective of the S+3Es
CO2 Emissions per kWh by Power Source
Generation Cost per kWh by Power Source
g-CO2 / kWh (transmission terminal)
Yen / kWh
1,000 943
40
738
750
599
Pressurized water reactors: 21
Boiling water reactors: 19
474
500
Range:
¥9.9–¥17.3
9.5
Biomass power
(woody)
Solar power
(residential)
Low head hydro power
Wind power
(offshore / floating)
Geothermal power
Wind power
(onshore)
LNG thermal
Note: Calculated using figures from fuel combustion as well as all
energy consumed when excavating, transporting, and refining raw fuel and when constructing, operating, and maintaining facilities (nuclear power includes energy consumed
during fuel reprocessing, byproduct disposal, power plant
retirement, etc.)
Source: Graphical Flip-chart of Nuclear & Energy Related Topics,
The Federation of Electric Power Companies of Japan
8.9–
Range:
¥9.2–
¥11.6
10.7
Oil-fired thermal
■ Fuel combustion during generation
0
Range:
¥19.1–
¥22.0
Range:
¥9.4–¥23.1
Coal-fired thermal
11
Range:
¥17.4–¥32.2
Nuclear Power
Nuclear power
Wind power
Solar power
LNG combined
LNG thermal
Oil-fired thermal
■ Facilities and operations 13
Hydro
25
Geothermal power
38
0
30
10
Range:
¥33.4–¥38.3
Range:
¥22.1– ¥36.0
20
250
Coal-fired
thermal
Nuclear power is friendly toward the
environment as its generation processes do not emit greenhouse gases.
In addition, generation costs are both
low and relatively stable, meaning
that nuclear power is also economically sound. Furthermore, the uranium used to fuel nuclear power
generation can be procured stably
due to its availability from several different countries with secure political
conditions like Australia.
In this manner, nuclear power is a
superior power source for the perspective of all 3Es.
At the same time, nuclear power
plant operators are working to improve
safety (S) in order to comply with
Japan’s new regulatory standards,
which are among the most stringent
in the world.
Facility
utilization
ratio (%)
70
80
50-10
80
20
30
80
60
80
12
Years of
usage
40
40
40
40
20
20
40
40
40
20
Note: Preliminary calculation for model plant, includes costs related to
non-operating elements such as CO2 emission response measures,
nuclear power plant accident risk-proofing, and government
measure-related costs
Generation costs for nuclear power based on minimum determined loss on damages at the time of the publication of this report
Source: Cost Verification Committee Report, Energy and Environment
Council, December 2011
21
Business Activities
Thermal Power Generation
Thermal power plays an indispensable role in securing a stable supply
of electricity due to its ability to be supplied in a stable manner and the
fact that generation volumes can be easily adjusted to respond to
changes in electricity demand.
In generating thermal power, we utilize different fuel sources based
on the degree of demand. Using coal and LNG as a base, we step up
LNG usage when demand enters the middle range and then begin using
oil when demand is at its peak.
Tachibana-wan Thermal Power Station (coal-fired)
Compensating for the Stoppage of Ikata through Increased
Operation of Thermal Power Plants
Operational Stability and Facility Maintenance Initiatives
The emergency measures described above have continued since the
Great East Japan Earthquake. Prolonged operation under these conditions will increase the risks of facilities being forced to stop due to
malfunction.
We are therefore implementing a number of measures to ensure the
safe operation of thermal power plants, which are continuing to perform at high operational rates. For example, we conducted an extraordinary maintenance effort prior to the period of continual operation in
order to confirm the soundness of facilities. In addition, we have
stepped up operational monitoring and inspection tours significantly to
prevent accidents. We are also using simulators to conduct regular
drills based on accident scenarios, and are taking other day-to-day
measures to improve operational capabilities
Facility maintenance initiatives include preserving and improving
on-site technological capabilities by using actual operational
machinery to conduct maintenance training. Further, we
ensure the reliability of facilities
by maintaining them appropriately and efficiently in accordance with their priority levels.
Due to the stoppage of all units of the Ikata Nuclear Power Station,
thermal power plants were used as an alternative power source
throughout the year. This situation continued since the fiscal year
ended March 31, 2012. To supplement supply capacity so that we
could meet heavy demand during summer and winter, we used all
units at our thermal power plants by postponing periodic inspections after ascertaining the soundness of facilities. Furthermore,
when supply and demand became particularly tight, we ensured
stable power supplies by increasing output at certain thermal power
plants to heighten supply capacity.
Periodic Inspections at Thermal Power Plants
Summer (July–August)
Periodic inspection
Winter (December–February)
Initial plan
FY2011
Unit
No. 1
Long-term
scheduled
stop
Unit
No. 2
Long-term
scheduled
stop
Anan
plant
Special-case delay
FY2012
FY2013
Operations
resumed
Dec. 9
Unit
No. 3
Overhauling a steam turbine
Unit
No. 4
Thermal Power Generated and Purchased and Utilization Ratios of
Company-Owned Coal-Fired Thermal Plants*
Tachibana-wan
Thermal Power
Station
Million kWh
40,000
Unit
Saijo No. 1
Thermal
Power
Station Unit
25,000 30,000
85.6%
95.3%
96.8%
99.3%
%
100
75
83.5%
No. 2
15,000
Unit
No. 1
20,000
50
10,000
25
5,000
Unit
Sakaide No. 2
Thermal
Power
Station Unit
0
Second delay
No. 3
2009
2010
2011
Special-case delays refer to the delays in inspection timing due to the inability to conduct inspections
at the legally mandated intervals because of the tight supply and demand situation for electricity that
followed the stop of nuclear power plant operations. These delays were conducted after receiving approval by submitting necessary applications to the Ministry of Economy, Trade and Industry.
22
2013
■ Coal ■ Fuel oil, gas, etc. ■ LNG
Utilization ratios of coal-fired thermal plants (Company-owned) (right scale)
* Excludes periods when stopped to undergo periodic inspections
Unit
No. 4
2012
0
FY
Implementing Plans to Introduce LNG Facilities to Sakaide
Thermal Power Station
We are actively introducing LNG power generation facilities with outstanding environmental performance. In conjunction with facilities
upgrading at the Sakaide Thermal Power Station—which mainly uses
oil as a fuel for power generation—we have refitted Unit No. 4 to use
LNG as a fuel and replaced Unit No. 1 with a high-efficiency LNG
combined cycle system.
We commenced installation processes for refitting Unit No. 2 with
a LNG combined cycle system in November 2013. Aiming to startup
operations in August 2016, we will proceed with plans steadily. After
Unit No. 2’s shift to LNG, three out of the Sakaide Thermal Power
Station’s four units will be using LNG power generating facilities and
the total generation capacity of the plant’s LNG facilities will have been
raised to 935 MW.
Fossil Fuel Purchase Expenses and Ratio of Operating Expenses
Billions of yen
Unit No. 1
Unit No. 4
Refitted Unit No. 2
August 2010
March 2010
(Fuel conversion)
August 2016
(Tentative)
Rated output
296 MW
350 MW
289 MW
Generation
method
Thermal
efficiency
Combined cycle
Steam power
Combined cycle
Approx. 57%
Approx. 44%
Approx. 58%
40
200
27.6%
150
100
1,68.7
23.3%
13.9%
29.1%
0
30
20
15.3%
10
50
2009
2010
■ Fossil fuel purchase expense
2011
2012
2013
0
FY
Ratio of operating expenses (right scale)
Initiatives to Ensure Stable and Affordable Fuel Procurement
Coal
SEPCO primarily uses Australian coal, which is characterized by its
high quality and ability to be procured in a reliable manner. However,
we are also expanding usage of low-grade coal and diversifying the
range of countries through which we procure coal resources. SEPCO
strives to ensure affordable procurement. To this end, we are revising
supply agreement conditions and procurement timing. As for transportation, we mainly employ dedicated large-scale vessels. Furthermore,
short-term chartering contracts are utilized to help build a shipping
system that is resilient to changes in the charter ship market.
Oil
Oil is used to respond to peak electricity demand. For this reason, the
amount of oil required can vary greatly at any given time, and we are
therefore working to ensure that our procurement systems are flexible
and responsive. Power plants equipped with desulfurization units
utilize high-sulfur C-heavy oil for its low price, and we are taking other
steps to realize more-affordable procurement.
LNG
In 2010, SEPCO began using LNG. At this time, we concluded a
long-term supply agreement with Malaysia LNG Sdn. Bhd. enabling us
to procure up to 420,000 tons per year of LNG over a 15-year period
beginning in 2010.
Progress of LNG Facility Introduction at the Sakaide Thermal Power Station
Start of
operation
%
Artist rendition of refitted Unit No. 2 of Sakaide Thermal Power Station
Characteristics and Competitiveness of SEPCO’s Thermal
Power Portfolio
Stable, Economic Fuel Procurement
Since the halt of all units of the Ikata Nuclear Power Station, we have
been using thermal power as a substitute. As a result, fuel and power
purchases, specifically those related to fossil fuels, have been rising
substantially.
In light of this situation, we have been pursuing more-economically
sound operations by utilizing different fossil fuels, such as coal, LNG,
and oil, based on their individual characteristics. At the same time, we
are working to procure fuel stably and economically by concluding longterm contracts with suppliers upon whom we are particularly reliant,
sourcing fuel from a wide variety of countries, and diversifying procurement methods.
Approximately 46% of the thermal power generated and purchased
by SEPCO comes from coal-fired thermal power. Leveraging this
characteristic of our power portfolio, we believe that we can maintain
a strong position in the power source field, even amidst intensifying
competition.
Going forward, we will be faced with the need to replace aged
thermal power generation. However, we believe that such replacements also serve as opportunities to boost our competitiveness, and
we will address them accordingly.
Ratio of Thermal Power Generated and Purchased by Source
■ Coal
■ Fuel oil, gas, etc.
2,045 MW
2,270 MW
(41%)
(46%)
■ LNG
646 MW (13%)
Note: Figures in parentheses represent ratio of total generation.
23
Business Activities
Renewable Energy
We are promoting the usage of renewable energy by generating it inhouse and purchasing surplus electricity from customers’ facilities.
Renewable energy is beneficial in its ability to help Japan become more
self-sufficient in terms of energy and its low CO2 emissions.
Matsuyama Solar Power Station
Hydropower Generation
As well as being a valuable renewable energy produced entirely in
Japan, generation costs for hydropower can be stabilized over the
long term. This also plays a cornerstone role in maintaining supply
and demand balances as it can be used to adjust against rapid load
fluctuations and provide power during peak hours. One source of
hydropower for SEPCO is the Hongawa Power Station in Kochi
Prefecture. This large-scale hydropower facility boasts a generation
capacity of 615 MW and uses
pump-storage facilities, meaning
that water can be accumulated
during low demand periods, such
as late at night, and then used
for generation during peak hours.
Accordingly, the Hongawa Power
Station serves as a core power
source for responding to peak
demand, right alongside oil-fired
Hongawa Power Station
thermal power.
Aiming to more effectively utilize valuable water resources, we
endeavor to realize stable hydropower generation operations by preempting problems through painstaking preventative maintenance
that includes inspection tours and periodic inspections. In addition,
we periodically overhaul* generation facilities with the aim of securing stable power supplies for the future. As part of these activities, in
the fiscal year ended March 31, 2014, we overhauled the Yanadani
Power Station in Ehime Prefecture. We also took advantage of this
opportunity to install more-efficient blades on its turbines, effectively
boosting the output of the facility from 23,000 kW to 23,800 kW.
Furthermore, we plan to increase the generation capacity at other
existing hydropower plants in the fiscal year ending March 31, 2015,
and beyond.
Plans to Increase Generation Capacity of Hydropower Plants
(Included in supply plans for the fiscal year ending March 31, 2015)
FY
2014
2015
2016
2017
It is difficult to develop largescale hydropower installations,
but we are working to utilize
hydropower more efficiently by
increasing the output of existing facilities when replacing
equipment.
* The periodic overhauling of water turbines
and generators and the replacement of their
old components to prevent problems
Solar and Wind Power Generation
For solar power, at our Matsuyama Solar Power Station, we intend to
increase generation capacity to around 4.3 MW by the fiscal year
ending March 31, 2021. In addition, Group companies use municipal
authorities’ open application system for projects to participate in solar
power generation businesses and acquire orders to build and maintain
related facilities. As for wind power, the total generation capacity of
facilities, which are principally owned by Group companies, is
approximately 40 MW. We aim to expand our wind power generation
Initiatives to Expand Introduction of Wind Power Facilities
Up to 200 MW sold to mainland Japan from Shikoku
Increase in percentage of electricity generated
by thermal power
>>>>>
Expand wind power grid in
Shikoku by approx. 200 MW
Operating Company
Solar Power
Wind Power
Location
Output
Shikoku Electric Power
(Matsuyama Solar Power
Station)
Ehime
Prefecture
2,042 kW
Yondenko Corporation
Kochi
Prefecture
4,960 kW
(Muroto Wind Power
Station)
Kochi
Prefecture
300 kW
Misaki Wind Power
Okawara Wind Farm
24
Transmit electricity to
CHUBU Electric
Power and
Kansai Electric Power
Group Solar and Wind Power Generation Facilities in Shikoku
Plan
March 2015
Hirayama Power Station (+2,900 kW)
Shingai Power Station (+600 kW)
March 2016
Deai Power Station (+100 kW)
February 2017
Iokigawa Power Station (+200 kW)
April 2017
Bunsui Daiichi Power Station (+3,100 kW)
New turbine blades for the Yanadani Power
Station being lifted into position
Ehime
Prefecture
Tokushima
Prefecture
20,000 kW
19,500 kW
capacity by utilizing interregional lines. Specifically, we transmit up to
200 MW of electricity to The Kansai Electric Power Co., Inc., and
CHUBU Electric Power Co., Inc. Because we can adjust the output of
thermal power generation readily, increasing it as a percentage of total
power generation enables us to receive a greater volume of wind power
generated electricity. Also, we are exploring technological options
based on the latest knowledge, including power generation results. As
a result of these efforts, we have increased the volume of wind power
generated electricity we can receive from 250 MW to around 600 MW
at present.
Further, we continue to purchase electricity from customers’ solar
and wind power generation facilities. The launch of the feed-in tariff
scheme for renewable energy in July 2012 resulted in a rapid rise in
installation of solar and wind power generation facilities. As of March
31, 2014, contracted purchase volumes had risen to approximately
670 MW for solar power and approximately 120 MW for wind power.
solar and wind power generation systems while also constructing transmission and distribution networks that will allow electricity to be supplied while maintaining necessary levels of quality. Through these
efforts, we are working to create the infrastructure that will facilitate
the spread of renewable energy.
Biomass Power Generation
The term biomass refers to biotic materials that are not from fossil
origins. Timber offcuts and organic waste are some examples. Such
biomass is being used as fuel in SEPCO’s Saijo Thermal Power Station.
At this facility, we mix fuel coal with bark and woodchips from Japanese
cedar (Cryptomeria japonica) and Japanese cypress (Chamaecyparis
obtuse) trees that have been left over as byproducts from the activities
of forestry associations and sawmills in Shikoku. Using this mixed fuel
during combustion not only provides a good outlet for the use of these
materials, but also helps reduce CO2 emissions
Electricity Purchased from Solar and Wind Power Facilities
(Contracted Electric Power)
MW
1,000
750
120 MW
Woody biomass
500
250
0
Receipt of woody biomass materials
670 MW
Feed-In Tariff System for Renewable Energy
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
FY
■ Solar power ■ Wind power
There are high expectations regarding clean solar and wind power
generation. However, there are also issues associated with the expanded
introduction of generation facilities for these power sources. For example, these power sources are heavily influenced by weather conditions,
which can result in difficulty in securing a stable electricity supply or
voltage spikes that decrease the quality of generated electricity.
SEPCO is dedicated to addressing such issues. We are conducting
research and development regarding systems for projecting output of
Solar and Wind Power Output by Time
In July 2012, Japan introduced a feed-in tariff system for renewable energy. The terms of this scheme are defined by the Act on
Special Measures concerning the Procurement of Renewable
Electric Energy by Operators of Electric Utilities. Specifically, the
scheme is designed to promote the spread of renewable energy by
requiring power companies to purchase electricity generated from
these sources at a fixed price*.
The expenses associated with the feed-in tariff system are
distributed among all electricity users in the form of a renewable energy promotion surcharge, which is calculated based on
the electricity consumption level of each user. The unit price for
these surcharges is the same throughout Japan.
* Applicable to any generation facility that uses solar, wind, hydro, geothermal, or biomass power and
complies with certain government-defined standards
Overview of the Feed-In Tariff Scheme for Renewable Energy
Solar power (spring)*
kW
2.5
Sunny
2
Generator of
Sell
renewable energy electricity
Cloudy
1.5
1
Rainy
An Electric
Power
Company
0.5
Solar Power
0
6
7
8
9 10
11
12 13
14
15
16
17 18
Supply
electricity
to power
company
19
Time
*C
apacity: 3.2 kW / Coordinates: 34.4 degrees N, 132.4 degrees E / Orientation: 30 degrees (due
south) / Inclination: 30 degrees
Wind Power
Buy
electricity
at fixed
price
Pay
renewable
energy
surcharge
together
with
electricity
bill
All users of
electricity
Residence
Factory
Wind power (winter)
kW
1,200
Hydro Power
Rated
capacity
(1,100kW)
900
600
Receive
reimbursement
for purchase
expenses
Submit
collected
renewable
energy
surcharge
Commercial
facility, etc.
Geothermal Power
300
Green Investment
Promotion Organization
0
0
6
12
18
24
Time
Biomass Power
Sources: The Federation of Electric Power Companies of Japan; Horikappu Wind Power Station,
Hokkaido Electric Power Co., Inc.
25
Business Activities
Power Network
Our power network plays a central role in supplying generated electricity
to customers in an efficient and stable manner.
Our network consists of approximately 6,400 km of transmission
lines, approximately 200 substations, and around 167,000 km of distribution lines. It has been constructed in a systematic manner that
integrates different power sources with one distribution network to allow
for efficient operation.
Painting of transmission lines
Efficient Grid Integrated with Power Sources
In our base power grid, 500 kV transmission lines play an important
role because they can transmit large volumes of electricity efficiently.
We have developed this power grid as we have built power sources. It
spans approximately 280 kilometers between the Ikata Nuclear
Power Station on the western edge of Shikoku and Tachibana-wan
Thermal Power Station on its eastern edge. Moreover, the power grid
is connected to the grids of The Kansai Electric Power Co., Inc., and
The Chugoku Electric Power Co., Inc., enabling us to receive electric
power transmissions from Japan’s main island in emergencies.
Improving the efficiency of our power grid while maintaining and
enhancing electric supply reliability is an important task. We are
proceeding with plans to maintain power grid facilities that are due
for renewal and aiming to further reduce transmission losses. Other
initiatives include conducting detailed analysis of the effect of introducing renewable energy sources to our power grid and continuing to
develop measures to increase its stability.
Measures to Improve Supply Stability
The emergence of an information-oriented society has made electricity even more indispensable in a variety of areas of daily life and
manufacturing.
In order to prevent unplanned power outages, we are implementing a number of initiatives to improve the reliability of our power
network. For transmission equipment and substations, we are backing up our current network by installing multiplex transmission lines
and using multiple transformer banks. Other steps are being taken to
increase the functionality of grid protection devices in order to minimize the impact of an accident. Regarding distribution facilities, the
duration of power outages is significantly shorter than those of our
peers in the West. We achieve this through appropriate maintenance
and inspections. Measures to reduce the frequency or the time
required for maintenance and inspections that are accompanied by
planned power outages contribute to our superior performance as
well. Also, at all operating sites, we are installing comprehensive
automation systems for distribution grids, which automatically and
rapidly minimize the scope of power outages due to such factors as
typhoons and enable us to resume transmission as soon as possible.
Global Comparison of Annual Accidental Power Outages per Customer
(Recent 5-Year Averages*)
Minutes / Customer
300
257
288
200
100
0
76
104
France
New York
15
8
Shikoku
Electric
Power
98
Italy
California Australia
South
Korea
* Average of the five-year period up until March 31, 2014, for SEPCO; up until March 31, 2013, for
Italy, California, and Australia; up until 2011 for South Korea and New York; and up until 2010
for France
Source: Overseas Electric Power Industry Statistics 2013, etc.
Taking Steps toward Introduction of Smart Meters
As an example of advanced metering infrastructure, smart meters promise to improve services for customers by enabling diversified electricity rates and increased administrative efficiency for utility companies. Also, they are likely to mitigate imbalances in electricity supply and
demand by tracking electricity consumption and thereby reducing consumption during peak demand periods and enabling energy-saving
measures. SEPCO plans to install smart meters for all customers by March 31, 2024.
Smart Meter Introduction Schedule
Benefits of Smart Meter Introduction
Customers using large
extra-high-voltage and
high-voltage supplies
Customers using
small high-voltage
supplies
•P
rompt start and stop of service when customers
move, and quick confirmation of usage volumes
Improved customer
• Reduced consumption during peak hours and
service
energy savings realized by tracking electricity
consumption and proposing pricing plans that
match customer lifestyles, etc.
• Remote control for commencing and ending
Enhanced operational contracts
efficiency
• Less hassle for monthly meter inspections, etc.
Low-voltage
customers
26
Completed introduction for all applicable customers
in summer 2012
Introduction for all applicable customers scheduled
to be completed by March 31, 2017
Introduction of smart meters to begin in the second
half of the fiscal year ending March 31, 2015,
introduction scheduled to be completed by March
31, 2024
Sales Activities Reflecting a Customer-First Mindset
Electricity provides peace of mind and affords people comfortable lifestyles, and is also environmentally friendly, thus it is used in various
fields.
The Yonden Group makes concerted efforts to provide customers with
technical solutions, a selection of optimal electricity rates, and other
solutions that meet their various needs in such areas as energy consumption and cost reduction.
Technical solutions activities
Enhancement of Pricing Plan Lineup
A number of customers choose SEPCO for its robust pricing plan
lineup. In addition to standard pricing plans, we also offer optional
agreement plans that contribute to more-efficient facility and business operation. The future introduction of smart meters will enable
us to further enhance our lineup of pricing plans. These meters are
able to breakdown energy consumption volumes into 30-minute segments, and will thereby allow us to develop more-finely-tuned pricing
plans. There exists the possibility to include plans that offer varying
conditions based on factors such as season, day of the week, or even
time of the day. We are examining potential new pricing plans.
individual customer to propose systems for realizing more-effective
energy use in these processes or measures for making such processes
more environmentally sound.
Through these efforts, we made approximately 2,020 sales proposals in the fiscal year ended March 31, 2014, roughly 790, or 40%, of
which were employed by customers. Moreover, for approximately 380
of these proposals, the Group was contracted for their installation. The
revenues from these activities were around ¥2.1 billion.
In this manner, the Group’s proposal-based sales activities are
contributing to improved customer satisfaction and higher revenues.
Spread of All-Electric Homes
Consulting that Addresses Customer Needs
The Group provides customers with technical solutions that leverage
its technological capabilities and expertise to offer better solutions to
the various technical issues they have in relation to energy use.
For example, we have earned much praise from medical, welfare,
and commercial facilities by proposing facility solutions. For such
customers, we offer electric air conditioners and water heaters that
utilize highly efficient electric heat pumps to reduce energy use,
costs, and CO2 emissions. We also provide kitchen appliances that
truly exemplify the benefits of electric appliances with their high
levels of safety, comfort, and cleanliness.
Further, we utilize cutting-edge technologies and energy-saving
equipment to offer industrial customers a wide range of consulting
services. Proposals for factories and other industrial facilities include
those that improve the operational efficiency of equipment through
energy-use analyses or the efficiency of the facility itself by replacing
equipment. We also analyze the production processes of each
All-electric homes, which use electricity as the source of energy for
all household processes, including cooking, water heating, and air
conditioning, are popular among a wide range of customers because
of the safety and comfort afforded by not using combustion-based
energy sources. Of particular note is “Eco-cute,” a system that uses
heat pump technology. This system features excellent energy efficiency, which enables water to be heated using roughly one-third the
energy that would be required when using a traditionally electric
water heater. With this superb energy efficiency, “Eco-cute” cuts
both energy consumption and CO2 emissions, winning much acclaim
for both its economic and environmental benefits.
In the fiscal year ended March 31, 2014, 22,000 all-electric
homes newly adopted this system (All-electric homes account for
70% of newly built homes.). Further, the cumulative total of allelectric homes has increased to around 290,000.
Technical Support Offered*
Number of All-Electric Housing Units
Number of proposals
2,500
Thousands of units
60
Thousands of units
300
2,019
2,000
293
40
1,500
1,000
200
22.4
20
500
0
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
0
FY
■ Energy-saving measures ■ Facility maintenance measures ■ Load equalization measures ■ Other (environmental measures, etc.)
2003 2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
100
11.7
10.7
0
FY
■ Newly constructed (individual year basis) ■ Existing units (individual year basis)
Contracts (cumulative basis, right)
* From the fiscal year ended March 31, 2012, provisions related to switching to equipment that uses electricity are included under “energy-saving measures,” whereas they were included under “other” previously.
Data for the fiscal year ended March 31, 2011, and the previous years has been restated accordingly.
27
Business Activities
Taking on the Challenge of Creating New Added Value
Aiming to reform and grow to become a multi-utility corporate group
supporting work and life, the Yonden Group is leveraging its collective
strength to develop new high-added-value businesses in various fields,
including services in such areas as integrated energy, telecommunications, and business and lifestyle support. We are confident these new
business areas will establish platforms for our future growth.
Integrated Energy
Three Business Domains
Telecommunications
Contribution to Developing Countries through BoP Business
Integrated Energy Area
In the integrated energy business area, we are effectively exploiting
management resources that we have accumulated in the electric
power business—such as technology, expertise, and personnel—to
develop domestic LNG sales businesses as well as consulting businesses and power generation businesses overseas.
Gas Supply
Following the commencement of operations at the Sakaide LNG
Terminal, constructed in conjunction with the introduction of liquefied natural gas (LNG) utilizing facilities at the Sakaide Thermal
Power Station, we commenced wholesale gas supply to Shikoku-Gas
Co., Ltd., in 2010, and have also begun full-scale sales to customers
operating factories in Shikoku. By conducting sales promotion activities targeting customers with significant heat demand, we successfully sold 100,000 tons of natural gas, valued at approximately ¥9.4
billion, in the fiscal year ended March 31, 2014. Going forward, we
will continue communicating the environmental benefits of natural
gas and striving to expand sales routes.
LNG Sales Mechanism
Transportation by gas pipes
Sakaide LNG
Terminal
Sakaide Thermal
Power Station
Shikoku-Gas Co., Ltd.
Operated by Sakaide LNG
Company, Incorporated
(SEPCO’s stake: 70%)
Customers
(Factories, etc.)
Transportation by truck
Overseas Consulting Business
We are conducting a consulting business overseas based on contracts
received from such organizations as the Japan International Cooperation
Agency (JICA) and New Energy and Industrial Technology Development
Organization (NEDO). In accordance with these contracts, we conduct
investigations, verification, and other consulting activities regarding
energy consumption reduction and the utilization and proliferation of
renewable energy. As of March 31, 2014, we have been contracted to
undertake 80 consulting projects in 39 countries. Through these
activities, we are contributing to infrastructure development and environmental preservation in developing countries.
Together with Group company SHIKOKU INSTRUMENTATION CO.,
LTD., SEPCO is conducting a JICA-sponsored project in the Philippines
entitled “Preparatory Survey on BoP business* on recycled watt-hour
meter operation and maintenance.” This project commenced in
October 2013 and is scheduled for completion in September 2014.
Watt-hour meters in rural areas of the Philippines are often not properly maintained, being treated more like a disposable commodity. For this
reason, there is great social demand for the introduction of proper meter
maintenance techniques, as this is anticipated to help cut investment
requirements for power businesses in this country while also contributing
to environmental preservation. The JICA project entails SEPCO investigating the possibility of constructing a
meter recycling business model that
addresses this issue by introducing
meter maintenance technologies into
the Philippines to enable the reuse of
meters that would previously have been
disposed of. Specifically, the survey will
investigate the feasibility and available Watt-meter maintenance training
in the Philippines
of labor for such a venture.
* BoP business: These businesses address the social issues faced by the lowest income bracket in
developing countries, the so-called “base of the pyramid (BoP).” Such businesses often entail
cooperation between development assistance agencies and private companies, with companies
using their business expertise to advance projects while ensuring profitability.
Overseas Power Business
As a result of efforts to acquire promising contracts centered on the
Middle East and Southeast Asia—which are seeing conspicuous
growth in demand for electric power—we are participating in three
overseas independent power producer (IPP) projects in Qatar and
Oman. In Qatar, the Ras Laffan C Project has continued commercial
operations steadily since April 2011. And, the Barka 3 Project and
the Sohar 2 Project began commercial operations in Oman in April
2013. While securing stable earnings from these two new projects,
over the medium-to-long term we intend to develop new projects.
Overseas Power Generation Operations
Project
Project Details
Power Generation Facilities
Desalination Facilities
Investment Participation by
Total Cost
Start of Operation
Qatar
Ras Laffan C
Construction and
operation of new power
and desalination plants,
sales of power and water
2,730 MW
290 k tons per day
5%
Approx. US$3.9 billion
April 2011
* Partial stock offering conducted in June 2014
28
Business and Lifestyle Support
Oman
Barka 3
Sohar 2
Construction and operation
of new power plant and
electricity sales
744 MW each
—
7.15%*
7.15%*
Approx. US$1.7 billion
April 2013
Telecommunications Area
Amidst the progressive globalization of the economy and the growing
diversity and complexity of customer needs, technological advancement and service integration in the telecommunications field are
advancing at a rapid pace. Examples of this advancement include the
spread of broadband communications services and the development
of more-sophisticated information systems. Our telecommunications
segment is anchored by STNet, Inc. The segment effectively leverages our technologies, personnel, optical fiber equipment, and other
management resources to provide a complete lineup of products and
services for creating the IT platforms that support customers’ businesses and lifestyles. The extensive range of activities undertaken by
the segment includes offering information systems and telecommunications services and conducting cable television operations.
Optical Fiber Telecommunication Services
In optical fiber telecommunication services, our flagship service is
the high-volume, high-speed Pikara Optical Cable Internet Service.
Provided through collaboration with cable TV (CATV) companies
located in Shikoku, this service provides customers with access
to the Internet, IP telephony, and multi-channel TV broadcasts in a
one-stop format. We are primarily targeting customer acquisitions
centered on the four prefectural capitals of Shikoku, and we have an
approximately one-quarter share of this market in Shikoku. In the
fiscal year ended March 31, 2014, we had 160,000 contracts and
net sales of approximately ¥10.9 billion. Going forward, we aim to
acquire more contracts.
Pikara Optical Cable Internet Service
Pikara Hikari Net
(Optical network
service)
Internet
Pikara Hikari Denwa
(Optical IP
telephony service)
known to have relatively few natural disasters. This data center,
known as Powerico, commenced operation in December 2013 and
is one of the largest data centers in West Japan. Rather than simply providing data center facilities, we aim to expand our data center business by offering customers convenient, highly reliable
one-stop services that encompass system management services,
including management, operation, and maintenance services.
To this end, we will make maximum use of our ability to provide
through a single company services in the systems development
area, the platform area, and communications area—a strength New Powerico data center
competitors cannot match.
in Takamatsu City
Business and Lifestyle Support Area
In our business and lifestyle support business, we are leveraging the
Group’s brand power in the Shikoku region to launch diverse services
closely linked to the lifestyles of local residents, including a nursing
care business and local government projects.
Nursing Care Business
As the population of Japan continues to age, the demand for nursing
homes is on the rise. To respond to this demand, Group company
Yonden Life Care Company, Inc., is operating fee-based nursing
homes. Nursing care professionals are stationed at these homes on a
24-hour-a-day basis, and the homes are proving to be very popular. We
believe this is partially due to a sense of reliability and trustworthiness
that is associated with the Group. We opened our third home, which
is located in the city of Kochi, in March 2012 as an addition to our
homes in the city of Matsuyama and the city of Takamatsu. Our nursing homes have an open, cheerful atmosphere. To enable residents to
enjoy the same lifestyles as they had in their own homes, they can
come and go as they please and stay out overnight. Also, we organize
a variety of interesting events for residents.
Optical fiber
Multi-channel
broadcasting services /
cooperate with
CATV operators
CATV operators
(Cable Media Shikoku Company,
Incorporated, Cable Television
Tokushima, Incorporated, etc.)
Trend in Cumulative Number of Contracted Customers for Pikara Optical
Cable Internet Service
Thousands of customers
200
160
150
100
50
0
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
Local Government Projects
Local government projects include private finance initiatives (PFIs)
that encompass financing, design, construction, maintenance, management, and operation of public facilities. Through such initiatives,
we are conducting four projects, including a school lunch center.
Furthermore, we have been contracted
to manage and operate eight public
facilities within Shikoku under the
designated management system that
comprehensively contracts out the
management and operation of public
facilities that are owned by the local
A lunch center in Utazu
government.
Private Finance Initiatives (PFIs)
FY
Municipal Authority
Data Center Operation
Town of Utazu
As information services increasingly become a fixture in society, there
is a rising need for methods of storing larger amounts of data and
managing risks related to this data by dispersing the locations where
it is stored. To respond to this need, STNet constructed a massive
data center featuring the latest equipment and thoroughgoing security countermeasures in Takamatsu City, Kagawa Prefecture, which is
Tokushima
Prefecture
City of Tokushima
City of Ozu
Project Details
Project to develop and operate new school
lunch center in Utazu
Project to develop and operate Tokushima
Agriculture, Forestry, and Fisheries Technology
Support Center in Tokushima Prefecture
Project to develop and operate municipal high
school in city of Tokushima
Contractor
Yondenko
Corporation
Project to develop and operate school lunch
center in city of Ozu
29
VOICE
The following are statements from SEPCO employees regarding their daily business activities and other related matters.
Ensuring Electricity Can be Supplied Stably
Realizing a Stable
Electric Supply
Genta Nakaoka
Central Power System Operating Center,
Power System Operation Dept.,
System Operation & Transmission Division
At the Central Power System Operating Center, we comprehensively manage electricity
generation volumes and electricity flow on a 24-hour-a-day basis, responding to the constantly changing volume of electricity usage through a revolving shift system.
In order to provide a stable supply of high-quality electricity at all times, it is necessary to comprehensively manage the flow of electricity, adjusting the output of each
individual generator as the situation requires. To accomplish this type of management, we
must accurately predict electricity demand based on such conditions as the season, day,
and weather, and at the same time consider economic efficiency. Further, in the rare
event a blackout occurs, we must conduct recovery procedures quickly and efficiently. For
this reason, we develop sophisticated technical skills and techniques through regular
drills, and are constantly working to refine these abilities.
During the fiscal year ended March 31, 2014, operations remained suspended for all
units of the Ikata Nuclear Power Station. As such, our supply capacity was significantly
reduced throughout the year. We responded by delaying periodic inspections at thermal
power plants and performing checks and maintenance at these plants during the weekend, when electricity demand is low. Through these efforts, we were able to secure the
supply capacity necessary to provide our customers with a stable flow of high-quality
electricity. Going forward, I will continue to help keep electricity flowing stably by fulfilling my role as an expert at power system operation.
Maintaining Stable and Safe Operations at Nuclear Power Plants
Takahito Yoshida
Equipment Planning Sec. I,
Maintenance Dept.,
Ikata Nuclear Power Station,
I am positioned in a department responsible for the maintenance and management of
equipment related to nuclear reactors. I personally contribute to this task mainly by developing inspection plans for primary plant systems and evaluating the results of these
inspections. SEPCO’s Ikata Nuclear Power Station has been stopped for some time now.
However, even with operations suspended, we still perform necessary inspections, maintenance, and management to keep the facilities functional.
Safety is our first priority at the Ikata Nuclear Power Station. To ensure safety through
facility maintenance, we employ insight gained through onsite maintenance efforts and
studying reports on problems that have occurred at similar facilities in Japan and overseas. The incidents at the Fukushima Daiichi Nuclear Power Station of the Tokyo Electric
Power Company, Incorporated, have created a great deal of concern among customers for
the safety of nuclear plants. For this reason, ensuring the reliability of the Ikata plant is
now more important than ever.
I am committed to helping maintain stable and safe operations at the Ikata Nuclear
Power Station. In this endeavor, I will perform my daily duties while leveraging past experience and also broadening my perspective to acquire new insight and techniques.
Supporting the Increased Operation of Thermal Power Plants
Kazuki Goto
Maintenance Sec.,
Anan Thermal Power Station,
Anan Thermal Power Office,
Thermal Power Division
In the past, the Anan Thermal Power Station primarily served as a backup power supply
to be used for adjusting to peak demand during the daytime and summer. This changed,
however, following the halt of operations at the Ikata Nuclear Power Station. To address
the resulting power shortages, we upped the utilization ratios of Unit No. 3 and Unit No.
4 of the Anan plant, and renovated the aged Unit No. 2, which had been out of operation
for an extended period. This required us to hunt down alternatives for parts that were no
longer in production while also inspecting and repairing facilities that were not up to
operational standards, and we addressed these tasks quickly through a concerted effort.
I am in charge of the maintenance and management of measuring instruments and
control equipment, meaning that I am responsible for ensuring the reliability of facilities.
Specific duties include extending the lifespan of aged instruments by swapping out parts
and installing functionality that allows abnormalities to be detected at an early stage.
The high utilization ratios at SEPCO’s thermal power plants will likely continue, meaning that we will need to remain vigilant. Nevertheless, I am strong in my commitment to
enabling customers to use electricity with peace of mind, and my efforts to maintain
stable and safe operations at thermal power plants will endure.
Addressing Aged Transmission Facilities (Replacing Transformers for Substation Lines)
Shingo Yano
Hydropower and Substation Sec.,
Electrical Engineering Dept.,
Tokushima Branch Office
30
I have currently been placed in charge of installing replacement transformers for the
180,000 V lines at the Kokuhu Substation, which supplies electricity to Tokushima City
and the surrounding areas. At the moment, preparations are progressing with the aim of
getting these transformers operational by spring 2015.
SEPCO develops replacement plans for aged transformers on a Companywide basis to
ensure that the number of transformers being replaced at any given time is relatively the
same. This is done by analyzing the substances contained in the oil from individual transformers to assess the degree of deterioration of each transformer.
When planning the replacement at the Kokuhu Substation, we determined the necessary capacity for the replacement transformer by projecting and evaluating future electricity demand trends, and otherwise considered what specifications would be best. The
actual installation of the new transformer will begin shortly, and this will be the first time
that the Tokushima Branch Office has conducted such a large-scale replacement effort for
power-line transformers. We will be sure to realize the utmost levels of quality while also
guaranteeing safety. At the same time, we will use this undertaking as an opportunity to
transmit actual installation techniques to younger employees as we push the project
toward completion.
Maintaining Stable Operation at Hydropower Plants and Effectively Using a Precious
Renewable Energy Produced Entirely in Japan
Yuji Uga
Hydropower and Substation Sec.,
Electrical Engineering Dept.,
Matsuyama Branch Office
My duty is to replace major pieces of equipment in hydropower plants, such as turbines
and generators, when these articles have begun to deteriorate.
In the fiscal year ended March 31, 2014, we replaced the turbine blades (the part of
the turbine that transforms the energy from water movement into mechanical energy) at
the Yanadani Power Station in Ehime Prefecture. When replacing the blades, which had
been degraded by years of use, we worked together with the manufacturer to ensure that
the new blades would realize maximum efficiency. Using the latest computational fluid
dynamics technologies, we ran countless simulations to develop blades that would utilize
water energy with significantly higher efficiency. The end result was an 800 kW boost in
generation capacity, raising the Yanadani Power Station’s output from 23,000 kW to
23,800 kW.
Going forward, we will continue to systematically implement facility upgrades in this
vein to maintain stable operation at our hydropower plants and make more-effective use
of this precious renewable energy source produced entirely in Japan.
Ensuring Quick Recovery After Accidental Blackouts
Soichi Kanada
Distribution Engineering Center,
Sales & Customer Service Office,
Kochi Branch Office
At the Distribution Engineering Center, we manage the operation, design, and maintenance of
distribution equipment within our jurisdiction.
An accidental blackout occurred during the long “Golden Week” break in May last
year. Pulled away from my family by a call from work, I rushed into work. The blackout
was in a mountainous region, where a landslide had swept away telephone poles and the
power lines attached. We were not going to be able to restore power that day, but we
couldn’t leave the residents without electricity. Generator trucks were dispatched to the
blacked-out area, taking detours to use roads unobstructed by the landslide. Once in position, these trucks continued to supply power throughout the night.
The clock had already ticked past 10pm when the generator trucks were running low
on fuel. We placed a call to a local gasoline stand, asking that they deliver fuel to the
trucks. Despite the difficulty of our request, the stand operators were quite accommodating. In fact, they even praised our efforts to overcome this trial. I remember being warmed
by their kind words.
Maintaining a stable supply of electricity is of course critical, but shortening the time
of accidental blackouts is equally important. Going forward, I hope to help the people we
serve live more-fulfilling lives by accomplishing both of these tasks.
Serving Customers as a Trusted Partner
Entrenching a
Customer-First
Mindset
Seiji Kagawa
(right in photograph above)
Technical Solution Group,
Customer Service Proposals Center,
Sales & Customer Services Dept.,
In the Technical Solution Group, we make sales proposals to respond to a wide variety of
customer needs and resolve their various issues.
Kagawa Prefecture, where we are situated, is home to many factories, including those that
produce food, chemical, textile, and steel products. Reducing energy costs is not the only
issue faced by these factories. They are also in search of ways to improve work environments,
by keeping factories cooler for example, and use exhaust heat more effectively, such as by
utilizing heated steam drains for other purposes. To help customers address such issues, we
make proposals that begin with examinations of ways they can save energy. The findings of
these investigations enable us to make proposals for tracking energy usage by principal production facilities, switching to higher efficiency heat pumps, realizing more-ideal operations,
or implementing other improvements.
Such proposals are always much appreciated by customers, who often state that they want
to institute the proposed measures immediately to begin realizing energy savings and cost
reductions. Many also mentioned their desire to receive consultation from us on other matters
in the future. I hope to continue serving customers as a trustworthy partner, and I will always
try to step into the customer’s shoes when doing this.
Contributing to a Stable Supply of Electricity in Emerging Countries
Tomohisa Fujita
(right in photograph above)
Consulting Team,
International Activities Project Sec.,
Business Planning Dept.,
I was assigned to the International Activities Project Section in March 2014. Soon after, I was
placed in charge of a consulting project for developing hydropower plants in Myanmar, and I
was on site in May of that year.
SEPCO was employed for this project by Myanmar’s Ministry of Agriculture and Irrigation
(MOAI). I was charged with the task of inspecting blueprints for hydropower generation facilities to be constructed and coordinating with the MOAI and the company contracted to build
the facilities in order to develop the final design. Currently, Myanmar is unable to supply
enough electricity to meet demand, and the country is constantly forced to institute scheduled blackouts. Several hotels and restaurants therefore have been required to install emergency backup generators on their own to keep their business running. In this manner,
Myanmar is still far away from realizing a stable supply of electricity.
Leveraging the techniques and expertise I have developed through my work in Japan, I
want to help realize the successful completion of the hydropower plant. In fact, I feel a strong
sense of purpose toward accomplishing this task, as I recognize that the plant will make
contributions to a stable supply of electricity in Myanmar.
31
CSR Activities
The Yonden Group is committed to fulfilling
its social responsibility through its various
business activities and building strong bonds
of trust with all of its stakeholders. In this
endeavor, we practice strict compliance and
work to preserve the environment and contribute to the local community.
The 7 CSR Pillars
Realizing a Stable
Electric Supply
In addition to the CSR activities
described in the Business Activities
Promoting
Compliance
Advancing Environmental Preservation
Activities
Practicing
Transparent
Management
section, we also conduct various activities based on the 7 CSR Pillars. These
activities will be introduced on the
pages that follow.
Entrenching a
Customer-First
Mindset
32
Fostering
Employee
Motivation
Coexisting in
Harmony with
Communities
33
34
Advancing Environmental Preservation Activities
38
Practicing Transparent Management
39
Fostering Employee Motivation
42
Coexisting in Harmony with Communities
44
VOICE
To further strengthen bonds of trust with our stakeholders and improve corporate value,
the Group practices stringent compliance and acts in accordance with a high standard of
corporate ethics. All employees are made well aware of the importance of compliance
as we work to meet the expectations of society.
Compliance Promotion System
and Employee Education
Stringent Confidential Information Security
At the Group, compliance is promoted on a Groupwide basis. As
such, we have established a Compliance Promotion Committee in
each Group company and the Compliance Council of the Shikoku
Electric Power Group at the Groupwide level.
Further, we have formulated compliance guidelines to serve as a
roadmap for all directors and employees in practicing good compliance. We are actively spreading awareness with regard to these
guidelines and taking steps to make sure they are adhered to. We also
conduct a variety of education programs designed to cultivate a
compliance-based mindset in employees. These include programs
conducted by representatives visiting business sites and online compliance training courses provided for all employees.
Shikoku Electric Power Group Compliance Guidelines (Excerpt)
To earn the trust of customers:
•Respect customer feedback and conduct business activities with customer satisfaction
as first priority
To earn the trust of shareholders and other investors:
•Practice management in strict compliance with the Companies Act and the Financial
Instruments and Exchange Act, conduct sound business activities, and disclose information in legally-compliant and appropriate manners
To earn the trust of business partners:
•Remain within the boundaries of standard business practices and social norms with
regard to provisions of entertainment and exchanges of gifts with business partners
To earn the trust of society:
•Thoroughly forbid bribery and other unlawful actions directed toward politicians and public
servants, maintain a strict stance toward acts that could be misconstrued as collusion with political or government figures, and create sound and transparent relationships with such figures
•Stand in opposition of antisocial forces that threaten society
Compliance Consultation Office
The Group has also established a compliance consultation office to
serve as a venue for employees to consult with specialized in-house
staff or outside lawyers. Through this office, we enable employees to
consult with in-house and outside representatives in the event that
they have become aware of illegal or unethical behavior within the
Group. Reports that are received are responded to in an appropriate
manner. A total of 9 reports were received through this office in the
fiscal year ended March 31, 2014.
Overview of Compliance Consultation Office (Implementation at SEPCO)
•C
onfirm factuality of report
• Take necessary measures to rectify and prevent
reoccurrence
Compliance Promotion
Committee
Establishment of Management Systems
and Education of Employees
The Group has established the Confidential Information Security
Committee as a body for formulating and advancing confidential
information security measures. Further, we have developed internal
guidelines and are otherwise working to ensure that confidential
information, including customer information, is managed in a stringent and appropriate manner.
The Internal Audit Office periodically evaluates these management systems and reports findings to management.
We educate employees with regard to the management of confidential information through training programs and other efforts
geared toward spreading awareness.
Confidential Information Security Policy Publicizing
The Group has formulated confidential information security policies.
In these policies, we publicize the purpose for which the Group uses
confidential information, and we have also established a confidential
information consultation office. In these ways, we have made our
confidential information efforts public, and we are responsive toward
opinions and questions.
Comprehensive Information Security
The Shikoku Electric Power Group realizes that information security
is an exceptionally important task that needs to be addressed in business operations. As such, we have developed systems for guaranteeing comprehensive information security on a Groupwide basis and
have formulated the Shikoku Electric Power Group Information
System Security Guidelines.
Computers are used to process massive quantities of information,
some of which is confidential. Such computer processing includes
exposure to risks such as leakage, alteration, system crashes, etc.,
and these risks could have serious social repercussions should they
materialize. To prevent the materialization of such risks, we are instituting various information security measures and taking steps to
foster information security awareness among employees.
Report
Reporter
Group employee
Information Security Measures
Telephone / Fax / Letter
Dedicated intranet / Internet
In-house
reporting venue
Physical Information Security Measures
• Disaster and crime prevention measures at specialized centers that house computers
and other IT equipment
Consultation venue
Technological Information Security Measures
• Identity verification measures, antivirus software, data encryption, and monitoring of
networks to prevent unauthorized access
(Reporter named by principle)
Outside party
Illegal or unethical behavior within
SEPCO or the Group (general
requests inapplicable)
Letter
Outside reporting
venue (Law firm)
Human-Based Information Security Measures
• Information system security management standards to ensure security
• Education, training, and programs to foster awareness regarding the importance of
information security and cautionary guidelines for computer usage
33
CSR Activities
The Group is devoted to preserving the planet and ensuring a bright future for all.
For this reason, we continue to pursue reductions in our environmental footprint
in all business areas while also conducting environmental preservation activities.
Environmental Preservation Activity
Promotion System
Yonden Group Environmental Policies
In accordance with the Yonden Group Environmental Policies, we
have positioned environmental preservation among the most
important tasks of management, and are advancing Groupwide
environmental protection activities as such.
Yonden Group Environmental Policies
(Formulated in November 2004, revised in April 2014)
Basic Environmental Policies
Environmental Action Policies
The Group’s fundamental stance toward
environmental preservation
Concrete activity guidelines
Promotion System (SEPCO)
•A
ddress global warming
• Conserve energy and level electricity
loads
• Preserve regional environment
• Promote a recycling-based society
• Conduct green procurement and create
eco-friendly offices
Basic Policy 1
Continue to reduce environmental
impact throughout all business fields
Basic Policy 2
Practice environmental management
Basic Policy 3
• Practice environmental management
Communicate with society
• Communicate with society
The Group has established the Yonden Group Environmental
Committee, which meets regularly. By receiving reports on
environmental protection plans and the progress of initiatives, and
then deliberating on these reports, the committee helps realize
uniform improvements in the quality of environmental preservation
activities throughout the Group.
In addition, the CSR Promotion Council, which is chaired by the
President, guides SEPCO in conducting environmental preservation
activities, which are primarily managed by the Environment Committee.
CSR Promotion Council
Environment Committee
Chairman: President
Chairman: Director in charge of
the environment
Head Office Representative: Department general manager
(General Manager of the Environmental
related
Affairs Department makes
department
Companywide adjustments)
Internal Audit Office
Branch
office, power
plant, etc.
Representative:
Site head
Relationship between Business Activities and the Environment (Fiscal Year Ended March 31, 2014)
Power plants consume fuel and other resources to generate electricity, which results in the production of byproducts such as CO2 and industrial
waste. This is a given, but SEPCO is implementing an array of initiatives to minimize the impacts of its operations on the environment.
INPUT
Business Activities
Fuel for nuclear power generation*1
Generation
0t
Emissions into the atmosphere
Use
0.90 million kl
Crude oil
0.27 million kl
Natural gas
0.5 billion m N
3
Coke oven gas
0.7 billion m N
Woody biomass
9 thousand tons
3
million tons
Substances that prevent environmental harm
0 million kWh
Thermal power plants
Thermal power
generation volume
17,902 million kWh
Hydropower plants
Hydropower
generation volume
2,014 million kWh
Alternative energy*3
Alternative energy
generation volume
14 million kWh
Volume of
purchased
electricity
10,458
million kWh
Distribution lines
Fuel oil
Nuclear power plants
Nuclear power
generation volume
Substations
3.07 million tons
Water*2
Pumped-storage
power volume
(116)
million kWh
Loss during
transmission and
distribution
(1,601)
million kWh
Internal
consumption
(1,457)
million kWh
OUTPUT
19.03/19.22*4 million t-CO
7 thousand tons
9 thousand tons
Ammonia
4 thousand tons
Other
4 thousand tons
(Hydrochloric acid, sulfuric acid, caustic soda, hydrazine, etc.)
2
SOX
NOX
Customers
(Residences, etc.)
Exhaust water
Electricity sales
volumes
27,214
million kWh
Company offices
(Included in the
above figure)
Electricity
consumption
23
million kWh
77 thousand tons
(Calcium carbonate, slaked lime, etc.)
34
Distribution
Transmission
lines
Fuel for thermal power generation
Lime
OUTPUT
Flow of Materials
CO2
Coal
4.09
Flow of Electricity
2.23
million tons
Industrial waste, byproducts, etc.
Coal ash
300
thousand tons
Heavy and
crude oil ash
Gypsum
thousand tons
thousand tons
3
147
Materials produced through recycling
and rate of recycling
Cement
Combustion cat- Gypsum board
materials, etc. alysts for cement materials, etc.
production, etc.
79.9 %
100 %
99.3 %*5
Solid radioactive waste 3,585 drums
99.7 %
Rate of recycling *1 Uranium used *2 Combined total of water used for generation and other purposes in thermal and
nuclear power plants *3 Energy from woody biomass co-firing generation at the Saijo Thermal Power
Station as well as from the Matsuyama Solar Power Station and the Muroto Wind Power Station *4 After reflection of Kyoto mechanism credits and domestic systems credits and adjustment for the
Excess Electricity Purchasing Scheme for Photovoltaic Power and the feed-in tariff scheme for renewable energy *5 Average of all materials recycled, including the three items listed above
*6 PRTR: Pollutant Release and Transfer Register
PRTR*6 listed chemicals
Emission into atmosphere (Xylene, etc.)
Release into water (Hydrazine, etc.)
7
1
tons
tons
Environmental Goals and Performance (SEPCO)
Evaluation ratings
Basic Environmental
Policies / Environmental
Action Policies
Target
Environmental Indicator
CO2 emissions intensity
(CO2 emissions volume)
Continue to reduce environmental impact throughout all business fields
Address Global
Warming
Unit
kg-C02 /kWh
(10,000 tons)
Nearly accomplished
Unaccomplished
Performance
FY2013
FY2013
Restart Ikata Nuclear
Power Station at early
date after ensuring
safety, reduce CO2
emissions on supply
and demand sides of
all business areas
0.699/0.706*1
(1,903/1,922*1)
Target
Evaluation
FY2014
Restart Ikata Nuclear
Power Station at early
date after ensuring
safety, reduce CO2
emissions on supply
and demand sides of
all business areas
Ratio of zero emissions power
sources*2
%
Utilization ratio of nuclear power
generation facilities
%
Thermal efficiency of thermal
power plants
%
More than 38%
39.6
More than 38%
Transmission and distribution loss
%
Minimize loss
5.6
Minimize loss
MW
(cumulative)
Approx. 360
358
Approx. 380
MW (YOY)
1% YOY reduction
23,283
(–1%)
1% YOY reduction
%
Maximize introduction
89
Maximize introduction
Contracted solar power capacity
from customers
kW
(cumulative)
Increase purchases
674,729
Increase purchases
Contracted wind power capacity
from customers
kW
(cumulative)
Increase purchases
123,351
Increase purchases
%
Maximize recovery
99.3
Maximize recovery
SOX emissions intensity
g/kWh
0.5
0.4
0.5
NOX emissions intensity
g/kWh
0.5
0.5
0.5
%
Approx. 99
99.3
Approx. 99
%
99
99.7
99
%
More than 85%
91
More than 85%
Contracted capacity of thermal
energy storage systems
Office electricity usage
Ratio of low-emission vehicle
introduction*3
SF6 gas recovery ratio
Preserve
Accomplished
13
—
0.0
Regional
Environment
Promote a
Recycling-based
Society
Waste recycling ratio
Coal ash recycling ratio
Green purchasing ratio
(office supplies)
*1 After reflection of Kyoto mechanism credits and domestic systems credits and adjustment for the Excess Electricity Purchasing Scheme for Photovoltaic Power and the feed-in tariff scheme for renewable energy
*2 Ratio of generation from non-fossil fuel power sources that do not emit CO2 (nuclear power, renewable energy) to total volume of electricity sold by the Company (including electricity purchased)
*3 Includes electric vehicles and plug-in hybrid vehicles
Global Warming Prevention Measures
SEPCO is working to reduce CO2 emissions from both the electricity
supply and demand sides of operations. In this endeavor, we aim to
restart the Ikata Nuclear Power Station at the soonest date possible,
after thoroughly ensuring safety. At the same time, we are pursuing
improvements in the efficiency of generation and transmission equipment while promoting energy conservation and load equalization
through the introduction of highly efficient electrical equipment.
In the fiscal year ended March 31, 2014, the halt of operations at
the Ikata Nuclear Power Station resulted in increased operation of
thermal power plants, as was the case in the previous fiscal year. For
this reason, CO2 emission volume was 1,922 tons and CO2 emission
intensity was 0.706kg-CO2/kWh. (All figures are after the reflection of
credits and the adjustment for other systems.)
*T
he five-year average for CO2 emission intensity in the fiscal years ended March 31, 2009–2013, the
first commitment period of the Kyoto Protocol, was 0.428kg-CO2/kWh. However, this figure is prior to
the application of carbon offset credits, which has been delayed due to application processes to the
United Nations. It is possible that this figure may be improved after the application of credits.
CO2 Emission Volumes and CO2 Emissions Intensity (SEPCO)
CO2 emission volumes (10,000 tons)
CO2 emissions intensity (kg-CO2 /kWh)
3,000
0.706
0.8
0.7
2,500
1,922
2,000
0.6
0.5
0.4
1,500
0.3
1,000
0.2
500
0
0.1
2008
2009
2010
2011
2012
2013
0.0
FY
■ CO2 emission volumes
CO2 emissions intensity (after reflection of offset credits)
35
CSR Activities
Electricity Supply Side Measures
Improving the Thermal Efficiency of Thermal Power Plants
Improving the thermal efficiency of thermal power plants* enables us
to reduce the amount of coal, oil, liquefied natural gas (LNG), and
other fossil fuels used to power these plants, while also contributing
to lower CO2 emission volumes.
LNG, a type of fossil fuel, emits no sulfur oxide (SOX), soot, or dust
during generation, and results in low amounts of nitrogen oxide (NOX)
emissions. Moreover, it results in lower CO2 emissions during generation than coal or oil, giving it clear advantages over other fuel sources.
SEPCO is improving thermal efficiency by inspecting equipment
on a daily basis, performing maintenance when necessary, and
practicing optimal operational management to minimize efficiency
losses. Additional thermal efficiency improvements are being pursued by replacing existing thermal power generation facilities with
high-efficiency LNG combined cycle systems.
* The ratio of heat energy that is turned into electrical energy
Thermal Efficiency of Thermal Power Plants
(SEPCO, Power-Generating Terminal)
%
40
39.6
39
38
37
2009
2011
2010
2012
2013
FY
Electricity Supply Side Measures Spreading Usage of Heat
Pump Thermal Storage Air-Conditioning Systems
Heat pump thermal storage air-conditioning systems use cheaper
nighttime electricity to store heat, which can then be utilized for airconditioning purposes during the daytime. In summer, this heat is
stored in the form of cold water or ice, whereas it is stored as hot
water during the winter.
The thermal energy storage unit of systems is not influenced by the
load of the air-conditioning unit, enabling air-conditioning to be
operated in an efficient and stable manner. Further, as cold energy can
be created using cool nighttime air, the thermal energy storage unit
helps improve efficiency of heat pumps. In addition, usage of a thermal
energy storage unit enables electricity demand to be shifted from
daytime to nighttime, effectively reducing usage during peak hours.
The Group provides customers with consulting regarding the
means of using electricity more effectively. During these consulting
activities, we also solicit these benefits of heat pump thermal storage
air-conditioning systems with the hope of spreading their usage.
Regional Heat Supply System
Takamatsu Port Passenger
Terminal Building
Ocean
Water
output
Water
intake
Seawater
Takamatsu
Symbol Tower
JR Hotel Clement
Takamatsu Sunport
Takamatsu
National Government
Building
Regional
distribution pipes
Seawater heat exchanger
Heat pump
Seawater
intake pipe
Pump
Pump
Thermal energy storage unit
Regional heat
supply base (B2)
* Regional heat supply system in place in the Takamatsu Sunport district
36
Further, we are encouraging developers to create centralized heat
supply bases by collecting in a centralized location the heat pumps
for building air-conditioning equipment that would normally be
installed in individual buildings. These heat supply bases can then
centrally heat and cool water to be pumped to different buildings to
meet air-conditioning needs. SEPCO is currently operating such heat
supply bases in three districts of Takamatsu City, Kagawa Prefecture.
Concentrating equipment in this manner will contribute to
significant reductions in energy usage while also equalizing loads by
tapping unutilized energy sources, such as underground and ocean
water, and employing thermal storage units.
Global Environment Preservation Activities
Air and Water Pollution Prevention
To prevent air and water pollution, we are installing flue gas
desulfurization and denitrator systems at our thermal plants, and also
using low-sulfur fuel and carefully managing combustion processes.
These measures help limit the release of SOX and NOX into the
atmosphere at plants.
Both thermal and nuclear power stations decontaminate waste
water using comprehensive effluent processing facilities. Sea water
used to cool the steam resulting from turbine rotation is released
back into the ocean at a temperature similar to that of the
surrounding water. To minimize the difference between water
exhaust and the ocean, we use cold water from close to the ocean
floor for cooling purposes.
Moreover, we continue to monitor exhaust vapors and water, and
report measured emissions volumes to local government bodies.
SOX and NOX Emissions of SEPCO and Major Developed Nations
SEPCO in
FY2013
0.4
0.5
0.6
Germany
2010
0.9
UK
2010
0.7
0.9
America
2010
1.7
0.7
1.6
1.6
France
2010
0
■ SOX ■ NOX
0.5
1.0
1.5
2.0
g/kWh
Source: SOX and NOX emissions / OECD.StatExtracts Complete databases available via OECD’s iLibrary
Volume of power generation / IEA ENERGY BALANCES OF OECD COUNTRIES 2012 EDITION
PCB Management
In the fiscal year ended March 31,
2010, SEPCO began systematically
detoxifying electrical equipment and
materials that contain high amounts
of polychlorinated biphenyls (PCBs)*,
such as transformers and capacitors,
at Japan Environmental Safety
Equipment containing trace PCB
Corporation’s Kitakyushu Facility.
amounts in storage
With regard to equipment that
contain trace PCB amounts, all electrical equipment is tested for
PCBs when retired. Those items found to contain this substance are
stored and managed in an appropriate manner. In addition, we have
been detoxifying transformer oil and other hazardous substances
since the fiscal year ended March 31, 2011.
* Polychlorinated biphenyls are organic chlorine compounds that are hazardous to human beings.
Harmony with the Surrounding Environment
When constructing power plants and other buildings SEPCO
considers the fact that they will need to be harmonized with the
surrounding environment, and we chose the shape and color of
buildings accordingly.
In addition, SEPCO is collaborating with municipal governments,
road managers, and other power line owning companies to create
more-appealing cityscapes. Through this collaboration, we are able to
systematically bury distribution lines in conjunctions with road
repairs and institute other beautification measures.
Before burying distribution lines
After burying distribution lines
(Kochi City)
taking other steps to increase the percentage of material effectively
reused, and have successfully realized a high recycling rate.
Recycling of Remains of Demolished Structures
SEPCO actively recycles the remains of demolished structures. When
replacing aged copper and aluminum power lines, the materials from
these lines are used to create new power lines. Likewise, concrete
pillars are pulverized, and the resulting concrete materials are
separated from the metal framework and converted into construction
aggregates, for uses such as in the foundations of road pavement. In
this manner, we recycle any materials we can.
Power lines before recycling
Recycled power lines
Concrete pillar before recycling
Recycled construction aggregates
Forestry Activities in Cooperation with Local Communities
Working in cooperation with municipal governments and other
organizations, SEPCO conducts thinning, tree planting, and other
forestry activities in forests that have been previously neglected.
The Takamatsu Branch Office participates in Kagawa Prefecture’s
“Forest Matching Project.” As
part of this project, we have
assumed responsibility for a
forest in the Goshikidai mountain
range of Kagawa Prefecture,
which we have named the
“Kagawa Yonden Goshiki Forest.”
Volunteers plant trees and cut the Tree planting at the “Kagawa Yonden
Goshiki Forest” (Takamatsu Branch Office)
undergrowth of this forest.
In addition, the Kochi Branch Office and the Nakamura Branch
Office take part in a forestry program in Kochi Prefecture advocating
forestry activities in cooperation with environmentally friendly
companies. Through this program, we have agreed to manage a forest
in Shimanto Town. In this forest, which has been dubbed the
“Shimanto Yonden Forest,” we conduct pruning, thinning, and other
forestry activities.
Promotion of a Recycling-Based Society
The Group works to limit the output of waste from its activities, and
is actively recycling those wastes that are output.
Wastes output by SEPCO include coal ash, as well as gypsum and
metal scraps. We are working to recycle these waste materials while
Waste Output and Recycled Volumes in the Fiscal Year Ended
March 31, 2014 (SEPCO)
Wastes
Output (tons)
Recycled Volume
(tons)
299,201
Coal Ash
300,086
Gypsum
147,194
147,194
Recycling Ratio (%)
99.7
100.0
14,200
14,180
99.9
Metal Scraps
2,886
2,882
99.9
Mud
2,843
1,239
43.6
Heavy and Crude Oil Ash
2,697
2,154
79.9
100
43
43.0
2,534
2,116
83.5
472,540
469,009
99.3
Rubble
Waste Plastic
Other
Total
*Figures are for the volume of waste for which SEPCO is considered the waste generator. However,
volumes of waste concrete from pillars (rubble) and insulating covers (waste plastic) for which the
waste generator is a subsidiary or affiliated company are included as these are intrinsically related to
the electric power business.
Environmental Management
Enhancement of Environmental Management Systems
SEPCO has established environmental management systems (EMSs)
at all of its business sites. By applying the PDCA (plan–do–check–
act) cycle to plans for concrete measures to be implemented in
accordance with its EMSs, we are continually improving our environmental preservation initiatives.
Communication with Society
Through exchange activities with community members and the
publishing of printed materials, the Group is working to inform the
community with regard to the importance of our environmental preservation activities and the act of environmental preservation itself. In
addition, we hold Yonden Environmental Roundtable Meetings in
order to have our environmental preservation activities reviewed by
external experts and receive feedback.
Environmental Month Initiatives
The Group has designated June of every year to be “Environmental
Month,” and we hold various events related to the environment
throughout Shikoku during this month.
In the fiscal year ended
March 31, 2015, the theme for
Environmental Month was “Ecoawareness, the bridge to a better
future.” Based on this theme,
we encouraged people to play a
part in environmental preservation through cleanup activities,
environmental poster exhibi- Environmental poster exhibition
(Yonden Plaza Sunport)
tions, and other events.
37
CSR Activities
Practicing Transparent Management
The Group actively communicates with its shareholders and other investors, customers,
community members, business partners, employees, and other stakeholders to ensure the
transparency of management.
Shareholders and Investors
Timely and Highly Transparent Information Disclosure
SEPCO actively discloses information to shareholders and other
investors in a timely and transparent manner through the means
listed below. We are constantly enhancing our information disclosure
efforts and the quality of the information we provide.
• Active disclosure on our website (impartial and quick release of
information)
• Publication of materials that explain management policies and
initiatives geared toward realizing the Yonden Group Vision
We also provide an email news service through which timely
investor relations (IR)-related information will be sent to shareholders or other investors at their request.
Enhancement of Communication Activities
SEPCO practices mutual communication with shareholders and other
investors through the following activities conducted in conjunction
with the announcement of the financial statements, and we are continually enhancing communication efforts.
• Explanatory forums regarding the Company conducted by representative directors for analysts and institutional investors (Tokyo)
• Periodic explanatory forums for private investors (Shikoku)
We also periodically hold tours of power plants and other facilities
to further deepen the understanding of stakeholders with regard to
our business.
Customers and Community Members
Meetings with Electricity Advisors
SEPCO has introduced an advisory system to our business. Under
this system, advisors are appointed by us from opinionative demographics of the surrounding communities, and these advisors offer
opinions and make requests directly to us. We also receive valuable
input from these advisors at meetings held at business sites and during tours of power plants. Further, we hold yearly meetings at which
the President and other members of management communicate
directly with the community members from various demographics.
38
Publication of the Light & Life Brochure
SEPCO publishes its Light & Life brochure
once every two months with the aim of providing information for the following purposes.
• Facilitating understanding with regard to the
activities of the Group
• Explaining Shikoku’s history, culture, and traditional industries, as well as various initiatives implemented to invigorate the region
Business Partners
Socially Responsible Procurement Activities
The Group has established Green Procurement Guidelines. We also
receive proposals from suppliers for eco-friendly office supplies and
electricity generation related supplies and equipment. In these manners, we are working together with business partners to reduce our
environmental footprint.
Information regarding principal procured materials and consultation venues is made available on our website. We also list requests
directed toward business partners on our website to encourage them
to practice socially responsible corporate activities as well.
Employees
Promotion of Information Sharing
YONDEN GROUP, an in-house magazine containing information related to the Group, is
published periodically and distributed to all
employees. We believe this magazine will help
share information throughout the Group while
also cultivating a sense of unity.
In addition, each group company publishes its own internal newsletter. For example, SEPCO publishes its YONDEN Terrace
monthly, effectively promoting communication between employees.
Fostering Employee Motivation
The Group wants all of its employees to be motivated to work in an active and creative
manner and feel satisfaction with their work. To this end, we strive to develop an
open-minded and lively workplace environment that encourages respect for employee
individuality and diversity.
Respect for Employee Individuality
and Diversity
Diversity Promotion
The Group respects the diverse value systems of beliefs and lifestyles
of its employees. Capable and motivated employees are provided
with opportunities to exercise their abilities and promoted to the
higher ranks of the Company, regardless of gender.
Diversity Promotion Initiatives (SEPCO)
Inspiring ambitious
action
Fostering employee
motivation
Respecting diverse
beliefs and value
systems
•S
upport for female employees
• Specialist system
The Group has developed a human resource evaluation system that
evaluates the extent to which employees contributed to performance
and exercised their skills during work processes.
Moreover, once a year, SEPCO presents awards to employees that
have made substantial contributions to performance or proposed
significant new ideas. In addition, the Incentive Award System has
been introduced at all business sites to reward the employees at the
front line of operations for their diligent work or social contributions
whenever appropriate.
Employment of People with Disabilities and Senior Citizens
• Open application system for Group employees
• In-house venture system
Development of a workplace
environment that motivates
employees to work in
an active and creative
manner and feel satisfaction
with their work
Fair Employee Evaluation Systems to Recognize
Employee’s Efforts
Supporting work-life
balance
•C
omprehensive range of
childcare and nursing
care support systems
• No-transfer work system
At March 31, 2014, SEPCO employed a total of 95 people with
disabilities, or 2.02% of its employees. This level exceeds the legally
mandated level of 2.0%. Going forward, we will continue to support
people with disabilities in achieving independence and participating
in society.
In April 2006, the Group introduced the Senior Employment
System, which enables employees that have reached the regular
retirement age of 60 to continue working up until 65 should they
choose to do so. As of March 31, 2014, a total of 232 employees
over 60 were working through this system.
Employee Data (SEPCO, as of March 31, 2014)
Employee Numbers
(People)
Male
Human Rights Education
Female
SEPCO has a Human Rights Education Committee in place, and is
working to foster proper understanding and recognition among all
employees with regard to the burakumin issue, a human rights issue
unique to Japan, as well as sexual harassment, power harassment,
and various other human rights problems.
Each year, the Human Rights Education Committee formulates
policies for human rights education programs. Based on these policies, SEPCO actively holds group training sessions as well as workplace seminars and lectures at business sites. In these manners, we
are working to cultivate higher levels of human rights awareness.
Further, the Yonden Group
Human Rights Education Council
has been established to facilitate
the exchange of information
regarding human rights issues
and other pertinent information
with Group companies.
Total
(%)
Average Age
Average Years of
Employment
4,426
91.8
43.3
21.7
393
8.2
41.0
19.7
4,819
100.0
43.1
21.5
Employment of People with Disabilities (SEPCO)
Fiscal Years Ended March 31
2009
2010
2011
2012
2013
Percentage of Total Employees (%)
1.98
1.97
2.05
2.05
2.02
2009
2010
2011
2012
2013
106
141
171
188
232
Employment of Senior Employees
Fiscal Years Ended March 31
Number of Senior Employees
In-house human rights training
39
CSR Activities
Development of a Comfortable
Workplace Environment
Initiatives to Support Female Employees
In March 2010, SEPCO established a specialized female employee
support team in the Employee Relations & Human Resources Depart
ment to support female employees in exercising their talents and
skills and balancing their work-life with home-life. This team plays
a central role in the Group’s proactive efforts to assist female
employees in developing their careers and establish a workplace environment that is supportive toward such career development efforts.
In the fiscal year ended March
31, 2014, we held forums discussing the theme of balancing
work and parenthood as well as a
seminar for cultivating female
managers that was directed at
female managerial candidates,
while also taking other steps to
Seminar for cultivating female managers
create more female managers.
Childcare Support Systems
SEPCO offers the following childcare support programs to help
employees raising children balance their work-life and home-life,
regardless of gender.
• Childcare leave system
• Measures to help employees secure time for childrearing
• Communication system between employees using childcare leave
system and supervisors to help them come back to their job smoothly
These initiatives have been recognized, with SEPCO receiving the Kurumin
mark from the Kagawa Labour Bureau for
the second time in May 2012. This mark
is awarded to companies that are supportive toward child raising in accordance with the Act on Advancement of
Measures to Support Raising NextGeneration Children.
Kurumin certification mark
Principal Support Systems for Childbirth and Rearing (SEPCO)
40
From 6 weeks
prior to birth to 8
weeks after
• Maternity leave
• Childbirth leave (5 special paid leave days for birth by spouse,
which are separate from normal paid leave days)
• Congratulatory monetary gift presented to celebrate childbirth
Until child’s
2nd birthday
• Childcare leave
(For employees raising children under 2 years of age)
Until child’s
3rd birthday
• Exemption from overtime
(For employees raising children under 3 years of age)
Until child’s
graduation from
elementary school
• ‌Childcare support flextime system
(Adjust start of work period by 10 minute increments)
• ‌Shortened work hour system for childcare support
(Shorten work hours by up to 2 hours a day)
• ‌Childcare sick leave
(15 paid leave days per year to care for sick child)
• ‌Deferred leave system
(Used to care for injured or sick child or participate in school
events)
Usage of Principal Childcare and Nursing Care Support Systems
in the Fiscal Year Ended March 31, 2014 (SEPCO)
Childbirth Leave
162
Childcare Leave
21 (Taken by 100% of
female employees giving birth)
Childcare Support Flextime System
12
Shortened Work Hour System for
Childcare Support
29
Childcare Sick Leave
1
Deferred Leave System (Used to care
for child or participate in school
events)
116
Prevention of Sexual Harassment and Power Harassment
SEPCO conducts online education programs for all employees geared
toward preventing sexual harassment and power harassment. In addition, a workplace harassment consultation office has been established
to respond to harassment complaints in a fair and appropriate manner,
while protecting the privacy of the employee that issued the complaint.
Accurate Management of Work Hours
The Group has introduced a system that allows work hours to be
accurately tracked and is taking other steps to prevent the occurrence of unpaid overtime. Through these efforts, management is
working together with employees to ensure that their work hours are
accurately managed.
Going forward, we will work to reduce work hours through improved
efficiency, while also actively encouraging employees to take paid
leave in a planned manner.
Total Actual Working Hours and Overtime (SEPCO)
HoursHours
1,947.0
1,961.4
1,944.8
2,000
20
1,500
16.2
16.5
18.2
1,000
10
500
0
15
5
2011
■ Total actual working hours
2012
2013
0
FY
Overtime (Per person per month)
Construction of a Favorable Relationship Between
Management and Employees
SEPCO has adopted a union shop system under which all employees
that are not representatives of the Company’s interests are enrolled in
the SEPCO Labor Union. Moreover, we encourage proactive communication between management and employees, and are working to
provide opportunities for such communication. For example, representatives from management and labor unions meet to discuss and
exchange opinions with regard to important matters pertaining to
management. These exchanges of opinion are conducted at meetings
of the Central Management and Employee Cooperative Committee
and forums held at business sites.
We also hold meetings of the Yonden Group Management and
Employee Council, whose members include representatives from the
management of Group companies and labor unions. This council
serves as a venue for sharing thoughts with regard to management
issues present throughout the Group.
Stringent Occupational Health and
Safety Measures
Proactive Promotion of Employee Education
Occupational Health and Safety Management System
Education Systems
Occupational health and safety managers* have been appointed to
each business site to promote health and safety management. In
addition, safety committees and health committees have been established at all business sites over a certain size. These committees are
headed by employees appointed by the Company and labor unions
and are responsible for discussing important matters related to safety
and health, respectively.
SEPCO’s operating environment is growing increasingly harsh. In
recognition of this fact, we are working to cultivate young employees
as well as those in the middle ranks of the Company as we realize
that these employee groups will be instrumental in driving future
development. At the same time, we are reinforcing the onsite capabilities that are crucial for advancing an electric power business. In
this manner, we aim to foster the human resources that will support
the Group’s ongoing growth.
Our education system consists of an effective mix of training programs. The central pillar of this system is on-the-job training, but will
also provide offsite education, such as trainings for new employees
and managers, as well as range of voluntary education programs that
allow employees to pursue skill development of their own volition. One
principal group training is the Yonden Group Open Seminar. This seminar is open to all Group employees, and therefore serves to supplement
and support the education programs at each Group company.
In the fiscal year ending March 31, 2015, SEPCO will institute a
motivation management training program to create a workplace environment in which employees are highly motivated and forward-looking in their work.
* Safety managers, safety drive managers, health managers, industrial physicians, etc.
Safety Management Initiatives
The Group aims to reduce the number of industrial accidents through
the Group to zero, and the Yonden Group Safety Committee has been
established to help accomplish this goal. Guided by this committee,
we will work to strengthen the safety management systems of Group
companies and affiliated companies alike.
In addition, we have designated the 10-day period from July 1–10
of every year as the Yonden Group Safety Reinforcement Period, and
we use this period as an opportunity to raise safety awareness. During
this period, we implement various safety improvement initiatives
including safety patrols and lectures.
Number of Occupational Accidents Requiring Time Off From Work in the
Fiscal Year Ended March 31, 2014 (SEPCO)
SEPCO
Subcontractors*
Total
Labor
2
16
18
Transportation
1
3
4
Total
3
19
22
Education Systems
On-the-job
training
*A
ccidents by subcontractors represent the number of accidents when performing tasks contracted
from SEPCO.
Occupational Accidents by Industry (Frequency)
Offsite education
•D
aily training
• Work improvement activities
•R
ank-based training
General employees training
Business leader training
Managers training
Training through dispatch within Japan and overseas
• Topic-based training
Yonden Group Open Seminar
People
Motivation management training
4.5
• Work process training
4.0
Divisional drills
3.5
3.0
2.5
2.0
Voluntary
education
1.5
1.0
• e -learning
• Correspondence education
• Support for acquisition of outside certifications
0.5
0.0
2009
■ Transportation / postal
■ Electric power / gas
2010
■ Service
2011
2012
2013
FY
■ Manufacturing
Average for all industries
SEPCO
Frequency: Number of accidents resulting in casualties per 1 million work hours
Source: Survey on Industrial Accidents, Ministry of Health, Labour and Welfare
Health Management Initiatives
The Group holds regular health examinations for employees and is
implementing measures to help employees improve both their physical and mental health.
For regular health examinations, we use the automated evaluation
systems that utilize the latest medical knowledge. These systems
enable us to provide employees with detailed healthcare advice automatically based on an accurate evaluation of their heath condition.
For mental health, we have introduced a stress check system that
allows employees to check their own stress levels. We also employ
counselors to help employees at SEPCO and Group companies deal
with their concerns and anxieties. These counselors can also be used
by the families of such employees.
Training for new employees
Technical training for the hydro power,
substation, and power system divisions
Distribution division technical training
Business leader training
41
CSR Activities
Coexisting in Harmony with Communities
The Group is committed to living in the community, moving forward with the community,
and prospering with the community. Guided by this basic stance, we actively support and
contribute to efforts to invigorate Shikoku, the region in which we operate.
Proactive Community Development Activities
Initiatives for Invigorating Industry
SEPCO is working to create new industries and attract businesses to
Shikoku through collaboration with municipal governments and other
related institutions.
As one facet of these efforts, SEPCO is cultivating interest in
Shikoku as a possible site for business development. We provide
information relating to industrial parks in the region as well as its
general qualities as a business location in pamphlets and our website. Information on Shikoku’s appeal and interesting projects and
invigoration activities is also transmitted through these avenues.
Support for Culture and the Arts
In 1991, SEPCO established the Yonden Cultural Foundation. This
foundation supports development culture and the arts in Shikoku in
order to help develop a local society with an even richer culture heritage.
The foundation conducts the following projects on an ongoing basis.
• Scholarships for students from
Shikoku aspiring to develop a
career as an artist
• Honors for talented artists con
nected to Shikoku
• Local concerts and art exhibitions
by scholarship students
• Assistance for arranging events Local concert by Yonden Cultural
Foundation scholarship students
featuring performing artists
Aid for Tourism Promotion Efforts
SEPCO is working to make Shikoku’s rich cultural heritage accessible
to all. To help make this heritage all the more engrossing, we conduct
cultural heritage programs in all four of Shikoku’s prefectures through
collaboration with the Shikoku Economic Federation and the Shikoku
Regional Development Bureau.
In addition, we actively participate in projects conducted by the
Organization for Promotion of Tourism in Shikoku with the aim of
attracting greater numbers of tourists to Shikoku. This organization is
promoting tourism in Shikoku through initiatives linking the
governments of the four prefectures with private companies.
Cultural Heritage Programs
SEPCO supports the activities
of volunteer tour guides
throughout Shikoku.
Tour guide at Marugame Castle in
Marugame City, Kagawa Prefecture
Support for Employees’
Social Contribution Efforts
Various Volunteer Leave Systems
SEPCO provides its employees with various systems enabling them to
acquire leave to conduct volunteer activities. In the fiscal year ended
March 31, 1995, we introduced an extended period volunteer leave
system, which allows employees to be absent from work for extended
periods of time to participate in long-term social contribution programs conducted by the Japan International Cooperation Agency or
local or national public service organizations. In addition, from the
fiscal year ended March 31, 2003, we began providing a volunteer
leave system that provides employees with up to seven special paid
leave days that can be taken for volunteer purposes and are separate
from standard paid leave days. Later, in the fiscal year ended March
31, 2009, we launched a special leave system that enables employees
to be absent from work without depleting paid leave days should they
be called to perform duties in court as a lay judge or potential candidate for being a lay judge under the saiban-in (lay judge) system.
Awards for Employees’ Social Contributions
Group employees have been recognized by the community for their
daily social contributions in areas such as social welfare as well as
accident prevention through traffic safety and crime prevention
activities. For example, at SEPCO, a total of 19 employees and six of
our business sites received awards from public institutions and organizations in the fiscal year ended March 31, 2014.
42
Proactive Communication with Society
Support for the Next Generation
Yonden Group Interaction Period
Energy Education
Every October, the Group institutes the Yonden Group Interaction
Period in an integrated manner. The purpose of this period is to conduct communication activities with customers in the community to
foster an understanding with regard to the Group’s CSR activities. We
hope that this will help cultivate a sense of community with the
Group and at the same time foster trust.
In the fiscal year ended March 31, 2014, this period was held for
12 days during October 20–31, when we conducted various events
throughout Shikoku under the slogan of “Yonden Group, filling our
lives with smiles that will last on into the future.” Major activities
during this period included social contribution and community interaction activities conducted through cooperation between Group companies and the Shikoku Electricity Safety Organization.
Since the fiscal year ended March 31, 2003, SEPCO has been
conducting Special-visit Energy Lessons, and the aggregate total
number of people participating in these lessons exceeds 220,000.
We hope that these lessons will raise awareness with regard to energy
and environmental issues among children, who will assume an
important role in the future of society, and inspire them to work
toward the resolution of these issues.
These lessons are widely known among educators and community
members alike.
The Group also supports children’s efforts to study energy and the
environment on their own. To this end, we have created and published
books for elementary and junior high schools that explain the
government’s instructions regarding energy education in accordance
with the government’s teaching and educational guidelines, and
donated these books to schools in Shikoku. Further, we have
established a Kids’ Museum page on our website designed to help
the children that will shape the future learn about energy. The
contents of this page are constantly being expanded.
Cleanup activities at tourist sight
(Tokushima Branch Office)
Power plant tour for elementary school
students (Ikeda Branch Office)
Instructional
book regarding
energy education
for elementary
schools
Volunteers at Nenrin-Pic sports event
(Kochi Branch Office)
Cleanup activities and flower planting in
front of train station (Nakamura Branch
Office)
Energy education site for the children
that will shape the future
Special-visit Energy Lessons
Held (SEPCO)
FY
2013
Times
Participants
Cumulative Total*
562
6,396
15,921
221,658
* Cumulative total for fiscal years ended
March 31, 2003–2014
Special-visit Energy Lesson
Internships
Electrical equipment inspection at
Uwajima Castle (Uwajima Branch Office)
Maple sapling planting (Takamatsu
Branch Office)
Yonden Group Interaction Period Activities in the Fiscal Year Ended
March 31, 2014
Social
Contribution
Activities
CommunityBuilding
Activities
Activity
Times,
Locations, etc.
Inspection of electrical equipment at
cultural and welfare facilities and homes
of elderly citizens living alone
170 locations
Regional cleanup activities, tree
thinning, tree planting, etc.
261 locations
Participants
Approx. 3,700
Facility tours (power plants, Groupowned factories, etc.)
35 times
Approx. 1,500
Hands-on science events and Specialvisit Energy Lessons
39 times
Approx. 7,500
Customer interaction activities
83 times
Approx. 900
Support for holding local sports
tournaments
37 times
Approx. 3,600
SEPCO provides internship programs for students at universities, graduate programs, and
technical colleges with the aim
of helping encourage these students to pursue professional
careers and fostering understanding with regard to the Internship program at General Education
& Training Center
electricity industry.
In addition, we also offer internship and other work-study programs for junior high and high school students upon request.
Participants in Internship Programs [Students from Universities,
Graduate Programs, and Technical Colleges] (SEPCO)
FY
2009
2010
2011
2012
2013
Participants
35
52
50
82
80
43
VOICE
The following are statements from SEPCO employees regarding their daily CSR efforts and other related matters.
Improving the Group’s Trust through Constant Compliance Awareness
Promoting
Compliance
Masamitsu Kawai
I promote compliance by providing legal consulting and reviewing contracts at the
request of business divisions.
From the different divisions, I am asked to review a variety of different cases.
It goes without saying that I make sure to identify any legal issues. However, at the
same time I also look at these cases from the perspective of how they will help the
Yonden Group fulfill its greater responsibilities. In this manner, I attempt to incorporate a social element into consultations.
I am remaining constantly aware of compliance in my daily duties. Through this
type of awareness, I hope to help the Shikoku Electric Power Group earn even
greater levels of trust from society.
Legal Group,
General Affairs Dept.
Preserving the Local Environment through Volunteer Activities
Masayuki Seto
General Affairs Sec.,
General Affairs Dept.,
At the Takamatsu Branch Office, we take part in Kagawa Prefecture’s Forest
Matching Project. Through this project, we concluded a partnership agreement
with the prefecture, Takamatsu City, and a local property ward, which entails that
we assume responsibility for a forest dubbed the “Kagawa Yonden Goshiki Forest.”
This agreement was signed during the fiscal year ended March 31, 2009, and we
have since continued to conduct forestry activities at this site, located in Goshikidai
mountain range of Kagawa Prefecture, together with prefectural and other
organizations.
Our forestry activities for the fiscal year ended March 31, 2014, took place in
November 2013. At this time, a group of 112 people, consisting primarily of
Takamatsu Branch Office employees and their families, assembled to plant 100
maple saplings, develop a hiking trail, and cut back undergrowth and vines. We
truly worked up a good sweat.
We concluded the undertaking by installing a commemorative plaque by the
maple thicket. This plaque embodies our desire for these saplings to grow into
majestic trees and create a beautiful forest.
Going forward, I hope to continue helping to preserve the local environment
through such volunteer activities.
Providing Information that Meets the Needs of Shareholders and Investors
Practicing
Transparent
Management
Ryoji Komobuchi
Corporate Planning Group,
Corporate Planning Dept.,
At the Shikoku Electric Power Group, we believe that our efforts to achieve ongoing growth and contribute to community development are founded on the understanding and trust of all of our shareholders, investors, and all of our other
stakeholders. Based on this belief, we are actively conducting investor relations
(IR) activities guided by the Yonden Basic IR Policy to inform stakeholders about
these efforts.
In these activities, we constantly work to provide shareholders and other investors with information that is of interest to them in reflection of current circumstances. In other words, we are always considering what information our
stakeholders need, and we are devoted to providing them with this information.
We value the feedback acquired through our IR activities. For this reason, we
are enhancing communication within the Group and sharing the opinions and
requests we receive with the relevant divisions.
Issuing Communications that are Easily Understood by Customers
Kazunari Tao
Press Group,
Public Relations Dept.
44
In the Public Relations Department, we employ various information transmission
tools to help us earn greater trust from the local society and from our customers.
I am responsible for Internet communications, and mainly manage our corporate
website.
In managing our website, I try to make sure communications are timely while
at the same time utilizing expressions that make the information easier for customers to understand. Furthermore, we began using Facebook, a social networking
service, in January 2014. This undertaking is currently a process of trial and error,
but I aim to use this service as a viable new information transmission tool.
In the future, I will continue to take advantage of the constantly advancing
Internet technologies and provide timely and appropriate communications through
a diverse range of avenues.
Striking a Balance Between Work and Family Using Childcare Support Systems
Entrenching a
Customer-First
Mindset
Hayato Yoshida
Generation Sec.,
Tachibana-wan Thermal Power Station,
Anan Thermal Power Office,
My second child was born last year. For roughly four months prior to this, I used
SEPCO’s childcare support flextime system to take my eldest son to and from
preschool.
As the preschool had set hours, I could not make it to work in time after dropping my son off. Luckily, the Company’s flextime system let me arrive 20 minutes
later in the morning and then stay 20 minutes longer at night to compensate. Even
if only for a brief period, this system allowed me to spend more time with my son.
I was also able to hear about what transpired at the preschool directly from his
teachers. The biggest benefit though was the increase in the amount of time I
could spend thinking about my children.
I am very grateful for this system, as well as for the understanding attitude of
my supervisors and coworkers and the work-side support that made it possible for
me to use this system.
In the future, I hope to maintain a balance between my work and my children,
always treasuring the time I can spend with my family.
Protecting the Community by Holding an Activity Reinforcement Month
Coexisting in
Harmony with
Communities
Takahisa Morioka
Customer Service Sec.,
Customer Service Center,
Kochi Branch Office
At SEPCO, the contractors responsible for meter reading and collections help
protect the community by regularly interacting with community members and
reporting any abnormalities to district welfare officers. In October 2012, the Kochi
Branch Office began designating a month of each year as the Yonden Community
Patrol Reinforcement Month, a period during which we strengthen these
activities.
Over these one-month periods, the contractors wear badges signifying that they
are on patrol. In addition to their everyday interactions with community members,
they also pay close attention to slight changes in customers’ actions or words, taking steps like checking to see if mailboxes have been emptied at the homes of
elderly. They thereby take these patrol activities one step closer to customers.
Given the concerns created by the declining birthrate and aging population, the
Kochi Branch Office hopes to continue such patrol activities into the future in
order to help protect the safety and security of the community.
Helping Children’s Social Learning through Community-Building Activities
Yuka Yamaguchi
Home Energy Lifestyle Service Sec.,
Customer Service Proposals Center,
Kochi Branch Office
As part of its yearly activities during the Yonden Group Interaction Period, the
Kochi Branch Office uses cherry pickers to clean Kochi’s famous statue of Ryoma
Sakamoto together with local elementary school students. Together with these
children, we also use this as opportunity to look upon the Pacific Ocean from the
same view point as the statue.
During the cleaning, tourists have been known to stop and praise the children
for their hard work, adding another element of community spirit to this activity. The
principal of the elementary school has stated that this event is a prime social learning opportunity for children, and one that is looked forward to each year.
As the children look across the Pacific Ocean from the same perspective as history-changer Ryoma Sakamoto, they are certainly dreaming big things for their future.
Through such community-building activities, we hope to interact more with the
community and make greater social contributions in order to place the Shikoku
Electric Power Group closer to its customers.
Conducting Face-to-Face Energy Lessons
Chika Sumitomo
General Affairs Sec.,
General Affairs Dept.,
Ikeda Branch Office
I am responsible for public relations at the Ikeda Branch Office. My duties include
planning events for children, such as Special-visit Energy Lessons, tours of the
Ikata Nuclear Power Station and other SEPCO facilities, and various types of
events and gatherings.
Of particular interest is the Special-visit Energy Lessons. These lessons are a
form of support offered for schools in which SEPCO employees are dispatched to
local elementary schools and junior high schools to conduct classes that explain
electricity and energy using experiments and other means. In designing these
classes, we adjust content based on feedback received through lively discussions
with teachers, aiming to create even more enjoyable classes to further raise student interest.
Activities such as these serve as perfect opportunities to connect with customers and conduct public relations face-to-face. I hope to advance more activities of
this kind in the future.
45
SEPCO is strengthening its business operations and management supervisory system under the guidance of the Board of
Directors and an Audit & Supervisory Board Member system.
Under this corporate governance system, we are practicing highly transparent management based on swift, accurate
decision making, while also ensuring strict legal compliance
and strong corporate ethics. In these ways, we are endeavoring to maximize corporate value.
Board of Directors and Board of Managing Directors
SEPCO positions the Board of Directors as an organization to make
decisions on important matters of business execution, and supervise
the individual directors in the performance of their duties. The Board
of Directors, which comprises 14 members (including one female
director), includes two external directors designated as independent
directors in accordance with the guidelines stipulated by the Tokyo
Stock Exchange, meets once a month in principle, and discusses and
reports on important business matters related to management.
As regards to the matters to be discussed by the Board of Directors
and other important matters, these are handled by the Board of
Managing Directors, which comprises directors who hold executive
positions as well as full-time Audit & Supervisory Board Members,
and in principle meets once a week to promote timely, appropriate
management.
The Internal Audit Office of SEPCO conducts audits of the implementation status of the management cycle under the Group’s annual management plan, which describes the Group’s basic policies and plans.
It also investigates whether or not appropriate decisions are being
made and business operations are being conducted efficiently based
on the responsibilities and authority of each job position.
SEPCO has five Audit & Supervisory Board Members, three of whom
are external auditors designated as independent auditors in accordance
with the guidelines stipulated by the Tokyo Stock Exchange. In
accordance with audit policies and plans established by the Board of
Audit & Supervisory Board Members, they conduct audits with a focus
on the legality of execution by directors by means of attending
meetings of the Board of Directors and other important committees,
holding regular exchanges of opinion with representative directors,
and reviewing and surveying important documents.
They also hold hearings about the results of the internal audits
performed by the Internal Audit Office, and conduct regular exchanges
of opinion with both the independent accounting auditors and Audit
& Supervisory Board Members at affiliates, working to further raise
auditing precision and effectiveness.
Corporate Governance System (SEPCO)
General Meeting of Stockholders
Appointment / Dismissal
Report
Instruction
Report
Representative
Directors
Instruction
Report
Directors
Instruction
Board of Managing Directors
(Deliberation of important issues)
Report
Operations Division
Internal audit
Compliance Consultation Service
Regulation
Group Companies
Collaboration
46
Various Specialized Committees
(CSR Promotion Council, etc.)
Audits
Independent Accounting Auditors
Collaboration
Audits
Audit & Supervisory
Board Member’s Office
Audit & Supervisory Board Members / Audit & Supervisory Board
Directors / Board of Directors
Appointment / dismissal /
supervision
Initiatives Regarding Internal Control Systems
To ensure the effective functioning of internal control systems that
support the appropriate, efficient execution of day-to-day business
operations by directors and employees, it is essential that SEPCO
maintains a sound corporate culture, identify chains of authority and
responsibility, and develop systems to manage risks. It is also essential that we regularly check the implementation status of this mechanism and make any necessary improvements.
We recognize the importance of winning the trust of society at
large. Aiming to conduct business activities that are legal, appropriate,
and efficient, the Board of Directors passed a resolution setting out our
policy on a System for Ensuring Sound Business. Going forward, we
will focus on operating our business in harmony with this policy.
Further, we will disseminate the policy to gain the understanding
of all our directors and employees, in order to strengthen our initiatives for enhancing our internal control systems.
Risk Management
Realizing the importance of practicing risk management in its business activities, SEPCO has formulated risk management rules that
define the basic aspects of risk management and action principles.
Every year, the management team checks and reviews risks that
have the potential to materially impact operations, and the results
are incorporated into the Group’s management plans for the following
fiscal year to ensure every effort is made to prevent or reduce the
impact of the risk.
For risks that cut across the entire Group, we set up expert committees as necessary and address those risks as appropriate based on
comprehensive assessments. For emergency situations brought on by
natural disasters or other circumstances, we have a separate set of
rules and a clear management structure that works to minimize the
damage and expedite recovery. Further, we encourage crisis management
awareness among all employees and share information appropriately
through such initiatives as establishing a crisis hotline in the General
Affairs Department as a helpdesk that gathers crisis information rapidly. Also, we have clarified systems and roles in the event of a crisis
and established measures to minimize damage and restore operations
as soon as possible.
Timely Disclosure of Corporate Information
SEPCO aims to ensure information is disclosed to shareholders and
other investors in a timely, appropriate, and fair manner. To facilitate
this endeavor, we have established a document entitled the Rules for
Timely Disclosure of Corporate Information, which compiles corporate information items needing to be disclosed based on the regulations applicable to companies listed on securities exchanges.
Should an event occur requiring disclosure, the appropriate chief
administrator responsible for information management will quickly
contact the General Manager of the Public Relations Department,
who is responsible for handling such information. After discussing the
details to be reported, the General Manager of the Public Relations
Department will disclose this information in a timely manner through
the Tokyo Stock Exchange’s Timely Disclosure Network (TDnet).
In addition, we actively communicate information that, while not
requiring disclosure based on timely disclosure guidelines, is judged
to be valuable to shareholders and other investors. This information
is communicated through press conferences and materials distributed to the press. Also, such information is posted on our website to
ensure the impartial and quick release of information. Further, one
may sign up for our investor relations email newsletter.
Moreover, we hold explanatory forums for analysts and institutional investors in conjunction with the release of our management
plans and financial results. For private investors, we periodically hold
forums explaining our business and also conduct facility tours.
Timely Disclosure System (SEPCO)
Company
information
Information Management
Representative
Contact
(Chief administrator
of related division)
General Manager of the Public
Relations Department
(Information processing representative)
Disclosure
Tokyo Stock Exchange
(Timely disclosure through TDnet)
Inquiry
Subsidiary
information
Representative
(General Manager of the
Business Planning Department)
General Manager of the General
Affairs Department
Other information disclosure
(Press conference, etc.)
(Determines need for disclosure)
47
Board of Directors / Audit & Supervisory Board Members
(As of June 26, 2014)
Directors
Momoki Tokiwa
Akira Chiba
Chairman of the Board
Kazutaka Kakinoki
Junichi Ietaka
Koji Yamaji
Executive Vice President and
Director
Director
Director
Hiroshi Arai
Toshihiro Mizobuchi
Hiromichi Wada
Yoshinori Miyauchi
Managing Director
Managing Director
Managing Director
Managing Director
Hayato Saeki
Hitoshi Suezawa
Koichi Tamagawa
Katsuhiko Takesaki
Michiyo Ihara
Managing Director
Managing Director
Managing Director
Director (Outside)
Director (Outside)
Division Manager of
In charge of Accounting & Finance
Dept., and Purchasing &
Materials Dept.
In charge of Public Relations Dept.,
General Affairs Dept., Plant & Facilities
Sitting Dept., and Tokyo Branch Office
General Manager of
Division Manager of
In charge of Information Systems &
Telecommunications Dept., and
Civil & Architectural Engineering Dept
Division Manager of System
Operation & Transmission Division
Division Manager of
Customer Service Division
Deputy Division Manager of
In charge of Secretary Dept., Employee
Relations & Human Resources Dept.,
General Education & Training Center,
and General Medical Services Center
48
Mikio Kawai
Toshihiko Jigami
Masao Nishiyama
Eiji Ogawa
Koji Morita
Senior Audit & Supervisory
Board Member
Audit & Supervisory
Board Member
Audit & Supervisory
Board Member (Outside)
Audit & Supervisory
Audit & Supervisory
Main Communication Methods at a Glance
Other than this report, the Yonden Group uses the following communication methods.
Main Communication Tools
Main Methods of Communication
Booklets, etc.
Community
Members
Other
olution services based on
S
integrated Group operations
ONDEN GROUP
Y
(pamphlet summarizing Group companies)
ebsites of Yonden Group
W
companies
ustomer Information Center,
C
helpdesks
YONDEN NOW (pamphlet summarizing Company)
hikoku TODAY
S
(video summarizing Company)
Electricity meter reading, visits
Meetings with external advisors
enaissance Shikoku
R
(regional information magazine)
Customers’ roundtable meetings
Shikoku Industrial Park Guide
ommunity-building facilities
C
(Yonden Plaza, etc.)
uide to All-Electric Homes, various pamphlets
G
promoting understanding of nuclear power
generation
tudy tours of facilities
S
(power generation facilities, etc.)
Light & Life (public relations magazine)
Television commercials
ommunity-building activities
C
(cleanup initiatives and
community concerts)
Participation in local events
dvertising activities for nuclear
A
power, visiting-for-dialogues
initiative
onducting questionnaire surveys,
C
etc. about residents’ attitudes
Business Partners
Shareholders and
Other Investors
Environmental
Communication
YONDEN NOW
Light & Life
Business transactions
ublication through helpdesk of material procureP
ment information
ebsites of
W
Yonden Group companies
Financial results reports
Briefings for individual investors
Financial statements
W
companies
riefings for analysts and
B
institutional investors
Fact books
email delivery service
tudy tours of power generation
S
facilities, etc.
Documents from Company briefings
Reports for shareholders
nvironmental
E
roundtable meetings
et’s ECO LIFE! (pamphlet introducing
L
environmental preservation initiatives)
pecial-visit
S
Energy Lesson
Message to You from the Last Polar
A
Bear in the North Pole (booklet for
children)
Tree-planting initiatives
W
companies
ocal area
L
cleanup initiatives
Let’s ECO LIFE!
ours of workplaces by senior
T
management team
ONDEN GROUP
Y
(pamphlet introducing Group companies)
Surveys of employees’ attitudes
YONDEN Terrace (in-house newsletter)
W
companies
abor-management roundtable
L
meetings, workplace roundtable
meetings organized by unions
Employees
ecreational activities at
R
workplaces
arious consultation services
V
related to life plans and
mental health
YONDEN Terrace
YONDEN GROUP
49
Outside Opinions
Customer Opinions
SEPCO creates a variety of opportunities for exchange of opinion with community members, including customers’ roundtable meetings and tours of power plants. We also practice reciprocal communication through the Company’s website. We work to reflect the
opinions solicited through these venues in business operations.
At customers’ roundtable meetings, the president and other members of senior management meet with a variety of stakeholders,
including representatives from municipal government agencies, economic and industrial organizations, women’s groups, consumer
organizations, educational institutions, the media, and large-volume customers. At these forums, we provide explanations of current
business topics and respond to questions and feedback while also exchanging valuable opinions with the attendees. In this section,
we will introduce some of the opinions solicited from customers attending these forums.
“
It may be impossible to eliminate the risks associated with nuclear power, but we cannot live
without electricity. In resource-scarce Japan,
nuclear power will probably need to be used to a
certain extent. I hope that power companies,
specialists in the electric power business, will
continue implementing safety measures when
operating nuclear power plants.
“
”
I got a better understanding of the safety measures at the Ikata Nuclear Power Station after
actually touring the plant. It might be a good
idea to provide more opportunities for people
to see the plant as a way to facilitate understanding regarding nuclear power.
Stable Electricity Supply
Electricity Rate Raise
“
“
In summer 2013, Kochi Prefecture experienced
record high temperatures. A number of people
suffered from heatstroke as a result. Electricity
is crucial to living safe and healthy lives, and I
therefore hope SEPCO will be able to continue
providing a stable supply of power.
“
”
I understand that legal separation of the power
transmission and distribution sectors is being
considered as part of the reforms to electricity
regulatory systems. However, I suspect that such
separation could also prove detrimental.
”
In manufacturing, companies cannot easily shift
costs to the consumer should raw material prices rise. I find it difficult to accept this increase
in electricity rates. I expect SEPCO to work to
cut costs with the aim of returning electricity
rates to the previous level in the future.
”
“
I listened to SEPCO’s explanation of the reasons behind the increase in electricity rates,
but there were several factors in this explanation that I found difficult to understand. SEPCO
needs to tailor its explanations to the viewpoint
of electricity users.
”
”
Third-Party Opinion
Opinion after reading the CSR-related sections of Yonden Group Annual Report 2014
Measures to Better Communicate Management Efficiency
In the wake of global warming and the recent string of hot summers, people
are taking a greater interest in energy. As a result, the position of power companies as an important and very public fixture in society is being reaffirmed.
The prolonged suspension of operations at the Ikata Nuclear Power
Station forced SEPCO to raise electricity rates in 2013 for the first time in
33 years. Yonden Group Annual Report 2014 describes the circumstances
regarding the Company’s management efficiency in light of this fact. This
report includes information and numeric data regarding targets and results
pertaining to major initiatives in the fiscal year ended March 31, 2014. It
also contains information on SEPCO’s plans for the medium- to long-term,
such as its goals for the fiscal year ending March 31, 2015, a fact that helps
readers better understand the Company.
Initiatives to Promote Understanding of the Electric Power
Business and Coexistence with the Community and the
Environment
This year’s explanations regarding nuclear power generation, thermal power
generation, and renewable energy were superior to those contained in
Yonden Group Annual Report 2013 in terms of both quality and quantity. As
society turns a discerning eye toward nuclear power, this report met readers’
demands for information with details regarding safety precautions for earthquakes and tsunamis as well as graph comparing the CO2 emissions and
generation costs of different power sources. Statements by SEPCO employees are featured in the voice section. Not only did this section contain more
statements than last year’s report, it also boasted an improved design, with
symbols indicating to what pillar of CSR activities each statement pertained.
I believe that this section provided a picture of SEPCO’s steadfast efforts to
realize a stable electricity supply and coexist in harmony with communities
that can be easily understood by those outside of the Company.
In the Advancing Environmental Preservation Activities section, numeric
data was offered with regard to SEPCO’s goals and results in reducing environmental impacts throughout its wide-ranging business activities. This section also provided details regarding specific activities. It discussed forestry
activities conducted in cooperation with municipal governments and also
touched on efforts to recycle demolished structures like old power lines and
concrete pillars, which are no doubt produced in massive quantities.
50
Hiroaki Itakura
Dean and Professor
Graduate School of Management
(Regional Management Research) Kagawa University
Born 1962. Completed master’s course at business management graduate school of
the Massachusetts Institute of Technology and doctoral course in advanced interdisciplinary studies at Graduate School of Engineering of the University of Tokyo.
Books: Organizational Design in the Digital Era (Hakuto-Shobo Publishing Company), Lectures on Business Administration (Keiso Shobo Publishing Co., Ltd.)
Furthermore, the report’s Corporate Data and Stock Information page
displays a map that shows the distribution of SEPCO’s shareholders by
region. Looking at this map, it is easy to see that SEPCO is a company garnering attention as its shareholders are not limited to Shikoku, but rather
reside throughout Japan and even overseas. It would have been nice if this
page had included information on the Company’s bonds, instead of just its
stocks. These bonds are available to private investors for as little as
¥100,000, and therefore provide an opportunity for more people to form a
connection with the Company. I believe that these bonds could make people
feel even more closely related to SEPCO and its electric power business.
Reciprocal Communication and Clearer View of PDCA Cycle
Functionality
Yonden Group Annual Report 2014 details the Company’s various efforts to
remain receptive to outside feedback and requests. In the Advancing
Environmental Preservation Activities section, we learned about the Yonden
Environmental Roundtable Meetings, whereas the Practicing Transparent
Management section offered information on the electricity advisory system
and customers’ roundtable meetings. Moreover, some of the opinions solicited from attendees at customers’ roundtable meetings were introduced in a
new section entitled Outside Opinions. I believe that this is a praiseworthy
effort. If the report were to offer management’s response to these opinions,
then this section could serve as an opportunity for reciprocal communication and a chance to provide a clearer view of the functionality of the
Company’s plan-do-act-check (PDCA) cycle.
Financial Section
2014
52
54
57
58
60
61
62
63
64
Eleven-Year Financial Summary
Analysis of Business Results and Financial Position (Consolidated)
Business and Other Risks
Consolidated Balance Sheet
Consolidated Statement of Operations
Consolidated Statement of Comprehensive Income
Consolidated Statement of Changes In Equity
Consolidated Statement of Cash Flows
Notes to Consolidated Financial Statements
51
Eleven-Year Financial Summary
Shikoku Electric Power Company, Incorporated and consolidated subsidiaries
Years ended March 31
Financial Performance
Operating Revenues
Electric
Other
Operating Expenses
Electric
Other
Operating Income
Ordinary Income (Loss) + Interest Expense
Income before Income Taxes
and Minority Interests in Net Income
Net Income
Financial Position
Total Assets
Total Equity*2
Interest-bearing Debt
Cash Flows
Net Cash Provided by Operating Activities
Net Cash Used in Investing Activities
Net Cash Used in Financing Activities
Term-end Balance of Cash
and Cash Equivalents
2004
2005
2006
2007
2008
¥ 561,891
508,212
53,679
501,905
449,209
52,696
59,986
60,750
¥ 576,263
522,216
54,046
515,450
459,693
55,756
60,812
61,949
¥ 567,410
514,653
52,757
514,231
461,799
52,431
53,179
53,917
¥ 579,042
520,497
58,545
518,835
463,141
55,693
60,207
62,975
¥ 618,106
550,392
67,713
563,831
499,984
63,846
54,275
58,302
40,018
41,853
42,593
43,232
44,668
27,417
26,901
27,650
28,259
26,431
1,405,629
379,224
729,174
1,363,119
386,599
653,258
1,459,552
393,460
752,013
1,435,821
390,203
727,148
1,420,775
373,988
712,195
142,514
(68,539)
(74,108)
158,299
(60,667)
(98,505)
(4,817)
(66,347)
72,337
125,553
(70,619)
(56,524)
127,140
(76,549)
(51,282)
6,749
6,412
7,584
5,993
5,301
Per Share of Common Stock
Net Income
Cash Dividends Applicable to the Year
Equity
¥ 105
50
1,479
¥ 105
50
1,537
¥ 110
50
1,601
¥ 117
50
1,636
¥ 113
50
1,627
Financial Indicators
Operating Income Margin
Return on Assets*3
Return on Equity*4
Shareholders’ Equity Ratio
Profit Returned to Shareholders (%)*5
Dividend Payout Ratio (%)
10.7
4.3
7.3
26.9
80.8
47.6
10.6
4.5
7.0
28.3
82.4
47.5
9.4
3.8
7.1
26.9
84.0
45.4
10.4
4.4
7.2
27.1
85.7
42.8
8.8
4.1
6.9
26.3
94.5
44.1
*1 U.S. dollar amounts are translated from yen, at the rate of ¥103=US$1.
*2 Effective from fiscal 2006, the fiscal year ended March 31, 2007, SEPCO and its consolidated subsidiaries adopted the new accounting standard for the presentation of net assets (“Accounting Standard
for Presentation of Net Assets in the Balance Sheet (No. 5) and its Implementation Guidance” (No. 8), issued by the Accounting Standards Board of Japan (ASBJ)). This accounting change has also been
applied to figures up to fiscal 2005 (the fiscal year ended March 31, 2006).
*3 (Ordinary income (loss) + Interest expense) / Average total assets
*4 Net income for fiscal year under review / Average shareholders’ equity
*5 (Retirement of treasury stock + Dividends) / Net income
Data on Electric Power Business
Years ended March 31
2004
2005
2006
2007
2008
Electricity Sales
Lighting (Residential)
Power (Industrial and Commercial)
Sales to Other Utility Companies
Electricity Generated and
Purchased by Power Source
Hydro
Nuclear
Coal
Oil & Gas
LNG (Liquefied Natural Gas)
Renewable Energy*6
33,691
8,858
17,415
7,418
35,444
9,172
18,039
8,233
35,000
9,410
18,558
7,032
35,148
9,326
18,835
6,987
37,137
9,651
19,618
7,868
37,462
39,205
38,698
38,799
40,897
3,814
15,076
14,223
4,286
—
63
4,276
13,713
14,802
6,333
—
81
2,578
15,210
15,582
5,211
—
117
3,592
14,704
15,328
5,003
—
172
2,549
15,415
16,472
6,181
—
280
Numbers of Customers
Lighting (Residential)
Power (Industrial and Commercial)
2,871
2,414
457
2,874
2,426
448
2,871
2,431
440
2,875
2,444
431
2,863
2,442
421
84.9
77.4
85.9
83.0
86.8
4,872
4,892
4,433
4,432
4,445
Nuclear Power Plant Uptime Ratio
Number of Employees*7
(Shikoku Electric Power)
*6 Renewable energy comprises solar energy, wind power, and energy from waste material and biomass.
*7 The continuously employed persons based on “Law concerning Stabilization of Employment of Older Persons” are included in the number of employees from fiscal 2012.
52
Thousands of
U.S. dollars*1
2014
2014
¥ 636,332
551,148
85,184
633,617
554,653
78,964
2,715
8,161
$ 6,177,980
5,350,951
827,029
6,151,621
5,384,980
766,640
26,359
79,233
2009
2010
2011
2012
¥ 635,132
569,464
65,668
580,850
519,930
60,920
54,282
57,902
¥ 545,393
486,442
58,951
502,969
449,979
52,990
42,424
46,002
¥ 592,123
519,807
72,315
532,100
465,390
66,709
60,022
57,925
¥ 592,142
528,401
63,741
586,352
528,258
58,094
5,789
7,777
46,510
35,766
39,175
(3,675)
(59,415)
(426)
(4,135)
29,104
22,079
23,646
(9,357)
(42,886)
(3,289)
(31,932)
1,405,671
381,004
690,553
1,383,190
360,156
686,742
1,379,859
351,384
657,836
125,488
(82,661)
(41,961)
6,166
¥ 128
50
1,681
126,793
(82,990)
(43,093)
6,876
¥ 100
50
1,668
145,608
(89,364)
(57,566)
5,526
¥ 111
60
1,684
1,375,197
326,815
671,800
2013
Millions of yen
¥ 561,783
487,012
74,771
612,121
543,797
68,324
(50,337)
(47,538)
1,385,440
285,201
734,684
1,397,277
287,439
737,449
13,565,796
2,790,669
7,159,699
81,605
(75,074)
(3,893)
15,781
(66,245)
56,651
65,734
(71,700)
2,725
638,194
(696,116)
26,456
8,164
14,351
11,109
107,854
Yen
U.S. dollars*1
¥ (45)
60
1,586
¥ (208)
—
1,384
¥ (16)
—
1,394
$(0.15)
—
13.53
%
1.0
0.6
(2.8)
23.7
—
—
(9.0)
(3.4)
(14.0)
20.6
—
—
0.4
0.6
(1.1)
20.6
—
—
8.5
4.1
7.7
27.1
85.6
39.2
7.8
3.3
6.0
26.0
109.9
50.1
10.1
4.2
6.6
25.4
108.3
53.9
2009
2010
2011
2012
2013
2014
34,828
9,565
19,136
6,127
30,942
9,464
18,032
3,446
34,223
10,130
18,970
5,123
32,652
9,793
18,651
4,208
28,437
9,625
17,785
1,027
28,364
9,615
17,599
1,150
38,456
34,420
37,761
35,838
30,959
31,128
3,252
14,970
15,298
4,649
—
287
2,661
14,102
13,900
3,208
196
353
3,277
16,104
13,597
2,497
1,819
467
3,611
6,698
17,395
5,398
2,235
502
3,706
—
16,400
7,794
2,397
662
3,100
—
17,354
7,124
2,566
984
2,859
2,449
410
2,861
2,461
400
2,869
2,478
391
2,872
2,490
382
2,872
2,499
373
84.5
79.6
90.9
37.7
—
Million kWh
Thousands
2,878
2,512
366
%
—
People
4,474
4,549
4,556
4,570
4,772
4,819
53
Business Performance (April 1, 2013–March 31, 2014)
Electricity Demand
Electricity Supply Operations
Electricity demand in the fiscal year ended March 31, 2014,
The amount of hydroelectric power generated and purchased
declined 0.7% year on year, to 27,214 million kWh.
decreased 16.4% year on year, to 3,100 million kWh, due to
Of this, sales for lighting (residential) were down 0.1%, to
the rebound for the abundance of water seen in the previous
9,615 million kWh. Sales to large industrial customers decreased
fiscal year.
2.2%, to 7,511 million kWh, due to customers increased use of
Total thermal power generated and purchased increased 1.7%,
in-house generation systems.
to 27,044 million kWh.
Sales of surplus capacity were up 11.9% year on year, to
Meanwhile, no nuclear power was generated due to the contin-
1,150 million kWh.
ued stoppage of all facilities of the Ikata Nuclear Power Station.
As a result, total electricity sales amounted to 28,364 million
kWh, a year-on-year decrease of 0.3%.
Volume of Electricity Sold
Trend in Electric Power Generation and Purchasing by Power
Million kWh
Million kWh
40,000
60,000
30,000
1,150
20,000
40,000
984
17,599
20,000
27,044
10,000
9,615
0
3,100
0
2009
2010
2011
2012
2013
2009
FY
■ Hydro
■ Lighting ■ Power ■ Sales to other utility companies
■ Nuclear
2010
2011
2012
■ Thermal
■ Renewable energy
2013
FY
Operating Results
In the fiscal year under review, operating revenues saw a 13.3%,
of new energy as well as an increase in fuel prices as a result of
or ¥74.6 billion, year-on-year increase, to ¥636.3 billion. Total
yen depreciation. These factors offset Companywide efforts to
electricity sales decreased. However, this decrease was offset by
reduce personnel expenses, repair costs, and other costs.
increases in revenues from electricity sales following the rise in
Due to the above, the Company recorded operating income of
electricity rates as well as in surcharge income. This surcharge
¥2.7 billion, compared with the previous fiscal year’s operating
income was received in association with the feed-in tariff system
loss of ¥50.3 billion. After adjustment for other expenses, such as
for renewable energy from the related institution.
interest expense, ordinary loss was ¥1.7 billion, compared with
Operating expenses increased 3.5%, or ¥21.5 billion, to
the previous fiscal year’s ordinary loss of ¥57.0 billion, while net
¥633.6 billion. This rise can be attributed to higher fuel and
loss after the deduction of income taxes was ¥3.2 billion,
power purchases due to the Company purchasing greater volumes
compared with the previous fiscal year’s net loss of ¥42.8 billion.
Operating Revenues / Operating Income
Net Income / Return on Equity
Billions of yen
Billions of yen
900
300
636.3
600
300
%
100
40
50
20
200
100
2.7
0
2009
■ Operating revenues
54
Billions of yen
2010
2011
2012
■ Operating income (right scale)
2013
(1.1)
0
(3.2)
0
(100)
FY
(50)
2009
■ Net income
2010
2011
Return on equity (right scale)
2012
2013
0
(20)
FY
Cash Flows
Net cash provided by operating activities was ¥65.7 billion,
As a result, free cash flow amounted to a negative ¥6.0 billion
largely due to depreciation and amortization, which counteracted
after deducting net cash used in investing activities from net
the recognition of ordinary loss.
cash provided by operating activities.
Net cash used in investing activities was ¥71.7 billion due to
Net cash provided by financing activities was ¥2.7 billion, re-
investment for installing safety measures into the Ikata Nuclear
flecting proceeds from issuance of bonds and proceeds from
Power Station.
long-term loans to cover free cash flow. Cash and cash equivalents at year-end decreased ¥3.2 billion.
Cash Flows
Cash and Cash Equivalents
Billions of yen
Billions of yen
20
200
100
15
2.7
11.1
65.7
0
10
(71.7)
(100)
5
(200)
2009
2010
2011
■ Net cash provided by operating activities
2012
2013
0
FY
2009
2010
2011
2012
2013
FY
■ Net cash used in investing activities
■ Net cash provided by (used in) financing activities
Financial Position
Total assets stood at ¥1,397.2 billion on March 31, 2014, up
Liabilities totaled ¥1,109.8 billion, up ¥9.6 billion, following
¥11.8 billion from the previous fiscal year-end. This was mainly
a rise in bonds and debt.
due to an increase in notes and accounts receivable.
Total equity was relatively unchanged year on year, increasing
only ¥2.2 million, to ¥287.4 billion.
Equity / Liabilities / Total Assets
Shareholders’ Equity Ratio / Interest-bearing Debt Ratio
Billions of yen
%Times
40
1,600
4
1,397.2
30
1,200
1,109.8
800
400
2.6
3
20.6
20
2
10
1
287.4
0
■ Equity
0
2009
■ Liabilities
2010
2011
Total assets
2012
2013
FY
0
2009
2010
Shareholders’ equity ratio
2011
2012
2013
FY
Interest-bearing debt ratio (right scale)
55
Dividend Policy
Paying stable dividends is SEPCO’s basic policy for returns to
dividend is set by the Board of Directors, while the final year-end
shareholders, which are decided in light of comprehensive con-
dividend is set by the general meeting of stockholders.
sideration of business results, financial position, and medium-to-
In the fiscal year under review, SEPCO regrettably chose to
long-term business conditions. Further, stipulations in SEPCO’s
forego the payment of cash dividends because it recognized a net
articles of incorporation enable the payment of interim cash divi-
loss due to delayed restart of operations at the Ikata Unit No. 3,
dends pursuant to Article 454, Paragraph 5 of Japan’s Compa-
which offset the benefits of increased electricity rates, and be-
nies Act, and SEPCO’s basic policy is to pay two cash dividends a
cause the timing of the Ikata Unit No. 3’s resumption of opera-
year, an interim dividend and a year-end dividend. The interim
tions remain uncertain.
Dividend Payout Ratio / Profit Returned to Shareholders
Buy-back and Cancellation of Treasury Stock
%
Millions of shares
120
18
90
12
60
6
30
0
0
2009
Dividend payout ratio
2010
2011*
2012*
2013*
（6）
FY
Profit returned to shareholders
2009
■ Buy-back
2010
2011
2012
2013
FY
■ Cancellation
* Dividend payout ratio and profit returned to shareholders for the fiscal years ended March 31, 2012,
2013 and 2014, are not provided due to the recording of a net loss.
Other
Capital Investment
Capital investment relating to our electric power business totaled
¥58.7 billion (before the elimination of intra-company transactions). Investments included those to install additional safety
measures at the Ikata Nuclear Power Station, a move taken in
billion (before the elimination of intra-company transactions).
As a result, consolidated capital investment for the fiscal year
ended March 31, 2014, totaled ¥73.8 billion (after the elimination of intra-company transactions).
consideration of the Great East Japan Earthquake, as well as those
Research and Development
to upgrade our transmission and transformation facilities to en-
The research and development activities of the Group are carried
sure that they can continue to supply power in a reliable manner.
out mainly by its subsidiary Shikoku Research Institute Incorpo-
In the telecommunications business, the Company invested a
rated. The purpose of these activities, which relate primarily to
total of ¥14.5 billion (before the elimination of intra-company
the supply and use of electricity, is to improve our technology
transactions) in projects related to optical communications ser-
and competitiveness.
vices and the construction of data centers.
In the fiscal year under review, the Group invested a total of ¥4.4
In our other business segments, we invested a total of ¥2.3
billion in research activities centered on the electric power business.
Outlook for the Fiscal Year Ending March 31, 2015 (April 1, 2014–March 31, 2015)
Electricity Demand
Operating Results
Electricity demand is expected to be approximately 27.0 billion
Operating revenues are expected to rise by 3.7%, or approximately
kWh, down 0.6% year on year due to the rebound from the ben-
¥24.0 billion year on year, to around ¥660.0 billion, as the full-
eficial temperature conditions in the fiscal year under review.
year benefits of the higher electricity rates and an increase in the
Due to lower sales of surplus capacity, total electricity sales are
fuel price adjustment amount will outweigh the decline in total
likely to edge down 1.5% from the previous fiscal year, to ap-
electricity sales.
proximately 27.9 billion kWh.
Due to the uncertainty as to when operations will resume at the
Ikata Unit No. 3, the Group has chosen not to release forecasts for
earnings or dividends at this point in time.
(The outlook for the fiscal year ending March 31, 2015, is based on
an announcement made on April 30, 2014.)
56
Business and Other Risks
The following is a description of the principal risks to the financial
position, operating results, and cash flows of the Group.
The forward-looking statements below represent estimates made
as of the date of the publication of this annual report.
Risks Pertaining to the Operating Environment
Economic, Social, and Weather Conditions
The electric power business accounts for 90% of the Group’s consolidated operating revenues. Electricity sales volumes can be affected
by changes in trends in economic, social, and weather conditions.
The Group’s business performance is particularly susceptible to cool
summers and warm winters.
Price Fluctuations in the Fuel Used for Thermal Power Generation
The prices of crude oil, coal, and other fuels used in our thermal p
ower
generation business are affected by trends in the international market
and currency exchange rates. The impact of these variables on our
business performance is limited by a system of appropriate adjustments under which the impacts of changes in fuel prices and exchange
rates are reflected in our electricity rates. Therefore, the effects these
variables have on the Group’s business performance are limited.
However, the Group’s business performance may be impacted if fuel
costs or currency exchange rates fluctuated to a significant degree.
In July 2013, an application was submitted to the Nuclear Regulation
Authority to confirm the compliance of Ikata Unit No. 3 with the new
regulatory standards. Since then, the Company has continued to offer
its full support for inspections conducted by the authority. At the moment, it has yet to be determined whether or not Unit No. 3 is compliant with the earthquake ground motion standards that are
prerequisite to facility safety measures. Based on the progress of
inspections, the restart of Ikata Unit No. 3 may be delayed. Such a
delay may result in higher expenses arising from an increase in fuel
costs for alternative thermal power or safety measures, which could
affect the Group’s business results.
In addition, future changes to regulations regarding nuclear power
could affect the Group’s business results.
Changes in Expenses Arising from Nuclear Fuel Cycles
The uncertainties of costs arising from the nuclear fuel cycle,
including reprocessing spent fuel and disposing of radioactive
waste, and decommissioning nuclear power units have been mitigated by various governmental systems and measures. However,
the Group’s business performance is subject to the influence of
prospective changes in these systems and measures, changes in
estimates of future costs, the operational status of reprocessing
facilities, and similar changes.
Influence of Interest Rate Fluctuations
Strengthening Environmental Regulations
The Group’s interest-bearing debt totaled ¥737.4 billion as of March
31, 2014. Future fluctuations in interest rates have the potential to
influence our business performance.
However, the majority of the Group’s interest-bearing liabilities are
in the form of long-term debt at fixed interest rates; therefore, interest rate fluctuations can have only a limited impact on the Group’s
business performance.
In the electric power business, the Group is reducing emissions
of greenhouse gases through the operation of nuclear power generation facilities and the introduction of our LNG thermal power
generation facilities. The business performance of the Group
could be affected as environmental regulations are strengthened
as part of efforts to create a low-carbon society in the future.
Risks Relating to Environment Changes
for the Electric Power Business
Revisions to Government Energy Policy and Systems Pertaining to
Electric Power Companies
In the electric power business, it is possible that the operating
environment will undergo significant change. Potential changes
could stem from future government measures in accordance with the
Basic Energy Plan, which stipulates basic policies in relation to
energy supply and demand. Another factor that has the potential to
create significant change is the reforms to electricity regulatory
systems, which include the establishment of an organization for
operations of wide-area electrical grids, complete deregulation of the
retail market, and the separation of the power transmission and
distribution sectors to raise impartiality.
Such revisions of policies or systems have the potential of
impacting the Group’s business performance.
Inspections for Confirming Conformance of Nuclear Power Plants with
New Regulatory Standards and Changes in Nuclear Power Regulations
Immediately after the serious accident at the Fukushima Daiichi
Nuclear Power Station of Tokyo Electric Power Company, Incorporated, SEPCO began instituting emergency safety measures and severe
accident countermeasures at the Ikata Nuclear Power Station to enhance safety and reliability.
Risks Pertaining to Business Activities
Operational and Facility-Related Issues
The Group’s business is focused on the electric power business. To
provide high-quality services, the Group maintains and inspects its
facilities on a regular basis. At the same time, we thoroughly evaluate
our exposure to natural disaster-related risks and work to implement
appropriate and effective safety measures for our facilities, which we
continually upgrade to reflect advances in knowledge and technologies. However, the Group’s business performance is exposed to the
risk of operational problems or damage to facilities due to malfunctions, accidents, or natural disasters, such as a major earthquake,
tsunami, or typhoon. The Group’s business performance could be
affected by the occurrence of these events.
Other Businesses
The Group is committed to promoting other businesses by carefully
investing in their future prospects and profitability. The anticipated
revenues from these initiatives are vulnerable to any sudden deterioration in the market environment and other factors.
The Group places priority on implementing the strict and appropriate
management of customer information in the Group’s possession as well
as other important business information by establishing information
management rules and systems, training employees, and other means.
The Group’s business performance could be affected by the leakage of
such information outside the Group.
57
Consolidated Balance Sheet
March 31, 2014
Millions of yen
ASSETS
2014
2013
Thousands of
U.S. dollars (Note 1(a))
2014
PROPERTY, PLANT AND EQUIPMENT (Notes 2 and 17):
Utility plant, at cost
Other plant and equipment, at cost
Construction in progress
¥ 2,968,816
¥ 2,952,708
$ 28,823,456
241,037
227,050
2,340,165
32,135
24,968
311,990
3,241,989
3,204,727
31,475,621
Less:
Contributions in aid of construction
Accumulated depreciation
(35,823)
(33,689)
(347,796)
(2,366,309)
(2,320,737)
(22,973,873)
(2,402,133)
(2,354,426)
(23,321,679)
Net property, plant and equipment
839,856
850,300
8,153,941
NUCLEAR FUEL, LESS ACCUMULATED AMORTIZATION
139,559
140,802
1,354,941
Investment securities (Notes 3 and 13)
44,556
44,196
432,582
Investments in and advances to unconsolidated subsidiaries
and affiliates
32,879
33,171
319,213
1,509
1,628
14,650
INVESTMENTS AND OTHER ASSETS:
Long-term loans receivable
110,456
116,146
1,072,388
Deferred tax assets (Note 10)
41,865
53,326
406,456
Net defined benefit assets (Note 6)
22,093
Other assets
14,013
25,718
136,048
267,375
274,187
2,595,873
Fund for reprocessing of irradiated nuclear fuel (Note 13)
Total investments and other assets
214,495
CURRENT ASSETS:
Cash and cash equivalents (Note 13)
11,109
14,351
107,854
Notes and accounts receivable (Note 13)
79,344
59,411
770,330
Inventories (Note 4)
39,308
32,713
381,631
Deferred tax assets (Note 10)
11,774
4,816
114,310
Other current assets (Note 12)
11,842
11,893
114,970
Allowance for doubtful accounts
Total current assets
TOTAL
See notes to consolidated financial statements.
58
(2,894)
(3,035)
(28,097)
150,485
120,150
1,461,019
¥ 1,397,277
¥ 1,385,440
$ 13,565,796
Millions of yen
LIABILITIES AND EQUITY
2014
Thousands of
2014
2013
LONG-TERM LIABILITIES:
Long-term debt (Notes 5 and 13)
¥ 641,723
Liability for retirement benefits (Note 6)
Reserve for reprocessing of irradiated nuclear fuel
123,452
22,053
Asset retirement obligations (Note 8)
96,296
Other long-term liabilities (Note 12)
$ 6,230,320
21,720
Net defined benefit liabilities (Note 6)
Total long-term liabilities
¥ 615,588
131,217
1,198,563
103,879
934,912
214,106
10,281
11,733
99,815
893,805
884,138
8,677,718
CURRENT LIABILITIES:
Current portion of long-term debt (Notes 5 and 13)
77,504
65,513
752,466
Short-term borrowings (Notes 7 and 13)
27,000
62,000
262,135
Notes and accounts payable (Note 13)
55,083
48,244
534,786
313
584
3,038
26,220
22,869
254,563
Income taxes payable (Note 10)
Accrued expenses
26,989
12,656
262,029
213,110
211,869
2,069,029
2,921
4,231
28,359
145,551
145,551
1,413,116
35,198
35,198
341,728
133,618
136,908
1,297,262
(41,428)
(41,410)
(402,213)
14,257
8,720
138,417
Net unrealized gain on available-for-sale securities
4,803
4,511
46,631
Deferred gain on derivatives under hedge accounting
6,608
4,209
64,155
287,198
284,968
2,788,330
241
232
2,339
Other current liabilities (Notes 12 and 17)
Total current liabilities
RESERVE FOR FLUCTUATIONS IN WATER LEVEL
COMMITMENTS AND CONTINGENT LIABILITIES (Notes 12, 14 and 15)
EQUITY (Note 9):
Common stock-authorized, 772,956,066 shares;
issued, 223,086,202 shares in 2014 and 2013
Capital surplus
Retained earnings
Treasury stock-at cost
17,122,400 shares in 2014 and 17,111,088 shares in 2013
Accumulated other comprehensive income:
Remeasurements of defined benefit plans
Total
Minority interests
Total equity
TOTAL
2,846
27,631
287,439
285,201
2,790,669
¥1,397,277
¥1,385,440
$13,565,796
59
Consolidated Statement of Operations
Millions of yen
Thousands of
2014
2013
2014
¥551,148
¥487,012
$5,350,951
OPERATING REVENUES:
Electric
85,184
74,771
827,029
636,332
561,783
6,177,980
554,653
543,797
5,384,980
78,964
68,324
766,640
Total operating expenses
633,617
612,121
6,151,621
OPERATING INCOME (LOSS)
2,715
Other
Total operating revenues
OPERATING EXPENSES (Notes 11 and 17):
Electric
Other
26,359
(50,337)
OTHER EXPENSES (INCOME):
Interest expense
Interest and dividend income
Gains on sales securities
9,898
9,462
96,097
(3,168)
(3,338)
(30,757)
(59)
(324)
(572)
Foreign exchange (gains) losses
(976)
263
(9,475)
Equity in (earning) loss of an affiliate
(271)
16
(2,631)
Other, net
Total other expenses
(969)
(9,407)
582
4,452
6,663
43,223
LOSS BEFORE PROVISION FOR RESERVE FOR FLUCTUATIONS
IN WATER LEVEL, INCOME TAXES AND MINORITY INTERESTS
(1,737)
(57,001)
(16,864)
PROVISION FOR RESERVE FOR FLUCTUATIONS IN WATER LEVEL
(1,310)
2,414
(12,718)
LOSS BEFORE INCOME TAXES AND MINORITY INTERESTS
(426)
(59,415)
(4,135)
721
1,026
7,000
INCOME TAXES (Note 10):
Current
Deferred
2,132
(17,568)
20,699
Total income taxes
2,853
(16,542)
27,699
(3,280)
(42,873)
(31,844)
NET LOSS BEFORE MINORITY INTERESTS
MINORITY INTERESTS IN NET INCOME OF CONSOLIDATED SUBSIDIARIES
NET LOSS
8
77
12
¥ (3,289)
¥ (42,886)
2014
2013
$ (31,932)
Yen
2014
PER SHARE OF COMMON STOCK (Notes 1(q) and 18):
Basic net loss
60
¥(15.97)
¥(208.21)
$(0.15)
Consolidated Statement of Comprehensive Income
Millions of yen
2014
NET LOSS BEFORE MINORITY INTERESTS
2014
2013
¥(3,280)
Thousands of
¥(42,873)
$(31,844)
OTHER COMPREHENSIVE INCOME (Note 16):
Unrealized gain on available-for-sale securities
Share of other comprehensive income in associates
Total other comprehensive income
COMPREHENSIVE LOSS
284
1,216
2,757
2,398
6,049
23,281
7
200
67
2,691
7,466
26,126
¥ (589)
¥(35,406)
$ (5,718)
¥ (597)
¥(35,419)
$ (5,796)
TOTAL COMPREHENSIVE LOSS ATTRIBUTABLE TO:
Owners of the parent
Minority interests
8
12
77
61
Consolidated Statement of Changes In Equity
Thousands
Millions of yen
Accumulated
other comprehensive income (loss)
Outstanding
number of
shares of
common stock
BALANCE AT APRIL 1, 2012
205,982
Common
stock
Capital
surplus
¥145,551
¥35,198
Net loss
Cash dividends, ¥30 per share
Purchase of treasury stock
(8)
Disposal of treasury stock
0
Retained
earnings
¥185,992
Treasury
stock
¥(41,400)
205,975
¥326,595
35,198
(42,886)
(6,196)
(11)
(11)
136,908
(11)
205,963
2
(41,410)
1
(0)
¥35,198
¥133,618
6,049
7,466
12
7,479
4,511
4,209
284,968
232
285,201
(3,289)
(3,289)
(18)
(18)
0
¥(41,428)
1
1,417
(18)
¥145,551
¥326,815
(6,196)
(3,289)
0
Total equity
(6,196)
(1)
145,551
¥219
(42,886)
Net change in the year
BALANCE AT MARCH 31, 2014
¥(1,840)
Minority
interests
Total
(11)
Net loss
¥3,093
Remeasure
ments of
defined
benefit plans
(42,886)
Deferred
(loss)
Net unrealized
gain on
gain on
derivatives
available-for- under hedge
sale securities
accounting
0
0
292
2,398
2,846
5,537
8
5,546
¥4,803
¥6,608
¥2,846
¥287,198
¥241
¥287,439
Thousands of U.S. dollars (Note 1(a))
Accumulated
other comprehensive income
Common
stock
Capital
surplus
$1,413,116
$341,728
Retained
earnings
Treasury
stock
$1,329,203 $(402,038)
(1)
3
62
$40,864
(174)
$43,796
Remeasure
ments of
defined
benefit plans
(31,932)
Net loss
Deferred
Net unrealized
gain on
gain on
derivatives
available-for- under hedge
sale securities
accounting
$1,413,116
$341,728
$1,297,262 $(402,213)
Total
Minority
interests
Total equity
$2,766,679
$2,252
$2,768,941
(31,932)
(31,932)
(174)
(174)
1
1
2,834
23,281
27,631
53,757
77
53,844
$46,631
$64,155
$27,631
$2,788,330
$2,339
$2,790,669
Consolidated Statement of Cash Flows
Millions of yen
2014
Thousands of
2014
2013
OPERATING ACTIVITIES:
Loss before income taxes and minority interests
¥ (426)
¥(59,415)
$ (4,135)
Adjustments for:
Income taxes (paid) refund
(1,137)
Depreciation and amortization
66,229
69,463
643,000
2,615
2,772
25,388
Loss on disposal of property, plant and equipment
Provision for liability for retirement benefits
Increase in net defined benefit liabilities
Reversal of provision for reprocessing of irradiated nuclear fuel
Decommissioning cost of nuclear power units
(Decrease) increase in allowances for doubtful accounts
Provision for (reversal of) reserve for fluctuations in water level
Decrease in fund for reprocessing of irradiated nuclear fuel
Equity in (earning) loss of an affiliate
7,696
(11,038)
546
818
(7,765)
797
7,941
(5,157)
1,333
(75,388)
7,737
(141)
34
(1,368)
(1,310)
2,414
(12,718)
5,690
5,781
55,242
(271)
16
(2,631)
Changes in assets and liabilities:
Increase in prepaid pension cost
Increase in net defined benefit assets
(169)
(3,033)
(193,524)
(6,218)
3,565
(60,368)
6,839
(2,683)
66,398
Other, net
22,983
(12,112)
223,135
Net cash provided by operating activities
65,734
15,781
638,194
(73,372)
(61,713)
(712,349)
(Increase) decrease in inventories
Increase (decrease) in notes and accounts payable
(19,933)
(29,446)
1,696
(Increase) decrease in notes and accounts receivable
INVESTING ACTIVITIES:
Capital expenditures including nuclear fuel
Proceeds from sales of property, plant and equipment
671
Increase in investment securities
(43)
Increase in investments in and advances to unconsolidated subsidiaries
and affiliates
512
(0)
(417)
(5,855)
Proceeds from sales of investment securities
285
341
Other, net
757
471
Net cash used in investing activities
6,514
(71,700)
(66,245)
2,766
7,349
(696,116)
FINANCING ACTIVITIES:
Proceeds from issuance of bonds
Redemption of bonds
40,000
70,000
388,349
(20,000)
(40,000)
(194,174)
Proceeds from long-term loans
62,100
88,100
602,912
Repayments of long-term loans
(44,339)
(29,221)
(430,475)
Net decrease in short-term borrowings
(35,000)
(26,000)
(339,805)
Cash dividends paid
(6,196)
(16)
(10)
Other, net
(18)
(20)
Net cash provided by financing activities
(155)
(174)
2,725
56,651
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS
(3,241)
6,186
(31,466)
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR
14,351
8,164
139,330
¥ 11,109
¥ 14,351
$ 107,854
CASH AND CASH EQUIVALENTS AT END OF YEAR
26,456
63
1. SIGNIFICANT ACCOUNTING AND REPORTING POLICIES
(a) Basis of presentation of consolidated financial statements
The accompanying consolidated financial statements have been
prepared in accordance with the provisions set forth in the
Japanese Financial Instruments and Exchange Act, the Japanese
Electric Utility Law and its related accounting regulations and in
accordance with accounting principles generally accepted in
Japan (“Japanese GAAP”), which are different in certain respects
as to the application and disclosure requirements of International
Financial Reporting Standards.
In preparing these consolidated financial statements, certain
reclassifications and rearrangements have been made to the
consolidated financial statements issued domestically in order to
present them in a form which is more familiar to readers outside
Japan. In addition, certain reclassifications have been made in
the 2013 consolidated financial statements to conform to the
classifications used in 2014.
The consolidated financial statements are stated in Japanese
yen, the currency of the country in which Shikoku Electric Power
Company, Incorporated (the “Company”) is incorporated and operates. The translations of Japanese yen amounts into U.S. dollar
amounts are included solely for the convenience of readers outside
Japan and have been made at the rate of ¥103 to $1, the approximate rate of exchange at March 31, 2014. Such translations should
not be construed as representations that the Japanese yen amounts
could be converted into U.S. dollars at that or any other rate.
Amounts less than one million yen have been rounded down,
except for per share data.
As a result, the totals shown in the accompanying consolidated financial statements do not necessarily agree with the
sums of the individual amounts.
(b) C
onsolidation and investments in unconsolidated subsidiaries
and affiliates
The consolidated financial statements as of March 31, 2014,
include the accounts of the Company and its eight (eight in
2013) significant subsidiaries (collectively, the “Group”). Under
the control and influence concepts, those companies in which
the Company, directly or indirectly, is able to exercise control
over operations are fully consolidated, and those companies over
which the Group has the ability to exercise significant influence
are accounted for by the equity method.
Investment in one (one in 2013) significant affiliate is accounted for by the equity method. Investments in the remaining
unconsolidated subsidiaries and affiliates are stated at cost.
If the equity method of accounting had been applied to the investments in these companies, the effect on the accompanying
consolidated financial statements would not be material.
The excess of the cost of acquisition over the fair value of the
net assets of an acquired subsidiary at the date of acquisition is
being amortized over a maximum period of 20 years.
All significant intercompany balances and transactions have
been eliminated in consolidation. All material unrealized profit
included in assets resulting from transactions within the Group is
also eliminated.
64
(c) Property, plant and equipment
Property, plant and equipment are stated at cost. Contributions
in aid of construction include contributions made by customers
and are deducted from the cost of the related assets in accordance with the regulations described in 1(a).
Depreciation of property, plant and equipment is principally
computed by the declining-balance method based on the
estimated useful lives of the assets.
(d) Long-lived assets
The Group reviews its long-lived assets for impairment whenever
events or changes in circumstances indicate the carrying amount
of an asset or asset group may not be recoverable. An impairment
loss is recognized if the carrying amount of an asset or asset
group exceeds the sum of the undiscounted future cash flows
expected to result from the continued use and eventual disposition of the asset or asset group. The impairment loss would be
measured as the amount by which the carrying amount of the
asset exceeds its recoverable amount, which is the higher of the
discounted cash flows from the continued use and eventual
disposition of the asset or the net selling price at disposition.
(e) Amortization of nuclear fuel
Amortization of nuclear fuel is computed based on the quantity
of heat produced for the generation of electricity.
(f) Investment securities
All investment securities are classified and accounted for,
depending on management’s intent, as follows:
Available-for-sale securities are reported at fair value, with unrealized gains and losses, net of applicable taxes, reported as a separate
component of equity. Nonmarketable available-for-sale securities
are stated at cost, determined by the moving-average method.
For other-than-temporary declines in fair value, investment securities are reduced to net realizable value by a charge to income.
(g) Inventories
Inventories, principally fuel for power generation, are stated at
the lower of cost, determined by the average method, or net
realizable value.
(h) Cash equivalents
Cash equivalents are deposits and short-term investments
that are readily convertible into cash and that are exposed to
insignificant risk of changes in value. They mature or become
due within three months of the date of acquisition.
(i) Reserve for reprocessing of irradiated nuclear fuel
The reserve for reprocessing of irradiated nuclear fuel is provided
at the present value amount equivalent to the cost of reprocessing irradiated nuclear fuel generated from the operations of a
nuclear reactor with and without a definite plan to reprocess.
Effective April 1, 2005, the Company adopted the revised
accounting regulation applicable to electric utility companies,
and the difference in the reserve from the accounting change was
¥60,327 million as of April 1, 2005, and is being amortized over
15 years. However, the difference in the reserve was reduced to
¥50,927 million from ¥60,327 million as of April 1, 2008, due
to the decrease in the estimated future reprocessing cost. As a
result, the unrecognized difference in the reserve at April 1,
2008, was ¥38,862 million, and is being amortized over 12
years, and the remaining balance was ¥19,431 million
($188,650 thousand) for the year ended March 31, 2014.
Additionally, under the accounting regulations applicable to
electric utility companies, the unrecognized actuarial loss of
¥5,029 million ($48,825 thousand) and loss of ¥2,073 million
at March 31, 2014 and 2013, respectively, have been amortized
starting from the next fiscal year over the period for which the
definite reprocessing plan for irradiated nuclear fuel is executed.
(j) Retirement and pension plans
The net defined benefit liabilities and assets are accounted for
based on projected benefit obligations and plan assets at the
consolidated balance sheet date. The projected benefit obligations are attributed to the proportion of points. Actuarial gains
and losses are mainly amortized in the following period. Past
service costs are mainly amortized in the current period.
In May 2012, the Accounting Standards Board of Japan (the
“ASBJ”) issued ASBJ Statement No. 26, “Accounting Standard
for Retirement Benefits” and ASBJ Guidance No. 25, “Guidance
on Accounting Standard for Retirement Benefits”, which replaced the accounting standard for retirement benefits that had
been issued by the Business Accounting Council in 1998 with an
effective date of April 1, 2000, and the other related practical
guidance, and were followed by partial amendments from time to
time through 2009.
(1) Under the revised accounting standard, actuarial gains and
losses and past service costs that are yet to be recognized in
profit or loss are recognized within equity (accumulated other
comprehensive income), after adjusting for tax effects, and any
resulting deficit or surplus is recognized as a liability (net defined
benefit liability) or asset (net defined benefit asset).
(2) The revised accounting standard does not change how to recognize actuarial gains and losses and past service costs in profit
or loss. Those amounts are recognized in profit or loss over a certain
period no longer than the expected average remaining service
period of the employees. However, actuarial gains and losses and
past service costs that arose in the current period and have not
yet been recognized in profit or loss are included in other comprehensive income and actuarial gains and losses and past service costs that were recognized in other comprehensive income
in prior periods and then recognized in profit or loss in the current period shall be treated as reclassification adjustments.
(3) The revised accounting standard also made certain amendments relating to the method of attributing expected benefit to
periods and relating to the discount rate and expected future
salary increases.
This accounting standard and the guidance for (1) and (2)
above are effective for the end of annual periods beginning on or
after April 1, 2013, and for (3) above are effective for the beginning of annual periods beginning on or after April 1, 2014, or for
the beginning of annual periods beginning on or after April 1,
2015, subject to certain disclosure in March 2015, both with
earlier application being permitted from the beginning of annual
periods beginning on or after April 1, 2013. However, no retrospective application of this accounting standard to consolidated
financial statements in prior periods is required.
The Company applied the revised accounting standard and
guidance for retirement benefits for (1) and (2) above, effective
March 31, 2014. As a result, net defined benefit assets of
¥22,093 million ($214,495 thousand) and net defined benefit
liabilities of ¥22,053 million ($214,106 thousand) were recorded as of March 31, 2014, and accumulated other comprehensive
income for the year ended March 31, 2014, increased by ¥2,846
million ($27,631 thousand).
(k) Asset retirement obligations
In March 2008, the ASBJ issued the accounting standard for
asset retirement obligations, ASBJ Statement No.18, “Accounting Standard for Asset Retirement Obligations” and ASBJ Guidance No.21, “Guidance on Accounting Standard for Asset
Retirement Obligations”. Under this accounting standard, an
asset retirement obligation is defined as a legal obligation imposed either by the law or contract that results from the acquisition, construction, development and normal operation of a
tangible fixed asset and is associated with the retirement of such
tangible fixed asset. The asset retirement obligation is recognized as the sum of the discounted cash flows required for the
future asset retirement and is recorded in the period in which the
obligation is incurred if a reasonable estimate can be made. If a
reasonable estimate of the asset retirement obligation cannot be
made in the period the asset retirement obligation is incurred,
the liability should be recognized when a reasonable estimate of
the asset retirement obligation can be made. Upon initial recognition of a liability for an asset retirement obligation, an asset
retirement cost is capitalized by increasing the carrying amount
of the related fixed asset by the amount of the liability. Any subsequent revisions to the timing or the amount of the original estimate of undiscounted cash flows are reflected as an adjustment
to the carrying amount of the liability and the capitalized amount
of the related asset retirement cost.
65
For nuclear power units, the Company recognizes asset retirement obligations as the sum of the discounted cash flows using
a discount rate of 2.3%. However, the Company recognizes asset
retirement obligations as the amount determined by the J apanese
Electric Utility Law and its related accounting regulations if such
amount is higher than the sum of the discounted cash flows.
On October 1, 2013, the accounting regulations applicable to
electric utility companies were revised and the method of cost
allocation for asset retirement cost of nuclear power units was
changed to the straight-line method over the estimated running
period added to the estimated storage period of each unit from
the method based on the proportion of the generation of electricity. As a result, operating income for the year ended March 31,
2014, decreased by ¥2,238 million ($21,728 thousand), and
losses before income taxes and minority interests for the year
ended March 31, 2014, increased by ¥2,238 million ($21,728
thousand). However, no retrospective application of these accounting regulations to consolidated financial statements in prior
periods is required. In addition, under these revised accounting
regulations, the discount period of the asset retirement obligations and capitalized asset retirement costs was changed. As a
result, the asset retirement obligations and the capitalized asset
retirement costs for the year ended March 31, 2014, decreased
by ¥8,360 million ($81,165 thousand).
(l) Income taxes
The provision for income taxes is computed based on the pretax
income included in the consolidated statement of operations.
The asset and liability approach is used to recognize deferred
tax assets and liabilities for the expected future tax consequences
of temporary differences between the carrying amounts and the
tax bases of assets and liabilities. Deferred taxes are measured by
applying currently enacted income tax rates to the temporary differences.
(m) Leases
In March 2007, the ASBJ issued ASBJ Statement No. 13,
“Accounting Standard for Lease Transactions”, which revised the
previous accounting standard for lease transactions. The revised
accounting standard for lease transactions is effective for fiscal
years beginning on or after April 1, 2008.
Under the previous accounting standard, finance leases that
were deemed to transfer ownership of the leased property to the
lessee were capitalized. However, other finance leases were
permitted to be accounted for as operating lease transactions if
certain “as if capitalized” information was disclosed in the notes
to the lessee’s financial statements. The revised accounting
standard requires that all finance lease transactions be capitalized to recognize lease assets and lease obligations in the consolidated balance sheet. In addition, the revised accounting
standard permits leases that existed at the transition date and
that do not transfer ownership of the leased property to the l essee
to be accounted for as operating lease transactions.
66
The Company applied the revised accounting standard
effective April 1, 2008. In addition, the Company continues to
account for leases that existed at the transition date and that do
not transfer ownership of the leased property to the lessee as
operating lease transactions.
All other leases are accounted for as operating leases.
(n) Bond issuance costs
Bond issuance costs are charged to income as incurred.
(o) Foreign currency transactions
All short-term and long-term monetary receivables and payables
denominated in foreign currencies are translated into Japanese
yen at the exchange rates at the consolidated balance sheet date.
The foreign exchange gains and losses from translation are
recognized in the consolidated statement of operations to the
extent that they are not hedged by forward exchange contracts.
(p) Derivative and hedging activities
The Group uses derivative financial instruments to manage its
exposures to fluctuations in foreign exchange and interest rates.
Foreign exchange forward contracts and interest rate swaps are
utilized by the Group to reduce foreign currency exchange and
interest rate risks. The Group does not enter into derivatives for
trading or speculative purposes.
For derivatives used for hedging purposes, if the derivatives
qualify for hedge accounting because of high correlation and
effectiveness between the hedging instruments and the hedged
items, gains or losses on derivatives are deferred until maturity of
the hedged transactions.
Payables denominated in foreign currencies for which foreign
exchange forward contracts are used to hedge the foreign
currency fluctuations are translated at the contracted rate if the
forward contracts qualify for hedge accounting.
The interest rate swaps which qualify for hedge accounting
and which meet specific matching criteria are not remeasured at
market value, but the differential paid or received under the
swap agreements is recognized and included in interest expense.
(q) Per share information
Basic net income (loss) per share is computed by dividing net
income (loss) available to common shareholders by the weightedaverage number of common shares outstanding for the period.
Diluted net income per share is not disclosed because dilutive
securities are not issued.
(r) Consolidated tax system
The Group applies the consolidated tax system.
(s) New accounting pronouncements
Accounting Standard for Retirement Benefits
On May 17, 2012, the ASBJ issued ASBJ Statement No. 26,
“Accounting Standard for Retirement Benefits” and ASBJ Guidance No. 25, “Guidance on Accounting Standard for Retirement
Benefits”, which replaced the Accounting Standard for Retirement Benefits that had been issued by the Business Accounting
Council in 1998, with an effective date of April 1, 2000, and the
other related practical guidance, and were followed by partial
amendments from time to time through 2009.
Major changes are as follows:
(1) Treatment in the consolidated balance sheet
Under the current requirements, actuarial gains and losses and
past service costs that are yet to be recognized in profit or loss
are not recognized in the consolidated balance sheet, and the
difference between retirement benefit obligations and plan
assets (hereinafter, “deficit or surplus”), adjusted by such unrecognized amounts, is recognized as a liability or asset.
Under the revised accounting standard, actuarial gains and
losses and past service costs that are yet to be recognized in
profit or loss shall be recognized within equity (accumulated other
comprehensive income), after adjusting for tax effects, and any
resulting deficit or surplus shall be recognized as a liability (net
defined benefit liability) or asset (net defined benefit asset).
(3) Amendments relating to the method of attributing expected
benefit to periods and relating to the discount rate and expected future salary increases
The revised accounting standard also made certain amendments
relating to the method of attributing expected benefit to periods and
relating to the discount rate and expected future salary increases.
This accounting standard and the guidance for (1) and (2)
above are effective for the end of annual periods beginning on or
after April 1, 2013, and for (3) above are effective for the beginning of annual periods beginning on or after April 1, 2014, or for
the beginning of annual periods beginning on or after April 1,
2015, subject to certain disclosure in March 2015, both with
earlier application being permitted from the beginning of annual
periods beginning on or after April 1, 2013. However, no retrospective application of this accounting standard to consolidated
financial statements in prior periods is required.
The Company applied the revised accounting standard for (1)
and (2) above effective on March 31, 2014, and expects to apply
(3) above from April 1, 2014, and is in the process of measuring
the effects of applying the revised accounting standard for (3)
above in future applicable periods.
(2) T
reatment in the consolidated statement of operations and
the consolidated statement of comprehensive income
The revised accounting standard does not change how to recognize actuarial gains and losses and past service costs in profit or
loss. Those amounts would be recognized in profit or loss over a
certain period no longer than the expected average remaining service period of the employees. However, actuarial gains and losses
and past service costs that arose in the current period and have
not yet been recognized in profit or loss shall be included in other
comprehensive income and actuarial gains and losses and past
service costs that were recognized in other comprehensive income in prior periods and then recognized in profit or loss in the
current period shall be treated as reclassification adjustments.
67
2. PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment at carrying amount, at March 31, 2014 and 2013, were as follows:
Thousands of
U.S. dollars
Millions of yen
March 31,
2014
¥ 286,129
Hydroelectric power
March 31,
2014
2013
¥ 285,756
$ 2,777,951
Thermal power
530,497
528,760
5,150,456
Nuclear power
693,800
686,384
6,735,922
Transmission facilities
542,063
539,980
5,262,747
Transformation facilities
338,911
339,337
3,290,398
Distribution facilities
466,956
461,710
4,533,553
General facilities
110,457
110,778
1,072,398
2,968,816
2,952,708
28,823,456
241,037
227,050
2,340,165
32,135
24,968
311,990
3,241,989
3,204,727
31,475,621
Total utility plant, at cost
Other plant and equipment, at cost
Construction in progress
Total
Less contributions in aid of construction
Less accumulated depreciation
Carrying amount
(35,823)
(33,689)
(347,796)
(2,366,309)
(2,320,737)
(22,973,873)
¥ 839,856
¥ 850,300
$ 8,153,941
3. INVESTMENT SECURITIES
Information regarding each category of the securities classified as available-for-sale was as follows:
Millions of yen
Cost
Unrealized
Unrealized
Gains
Losses
Fair Value
March 31, 2014
Securities classified as:
Available-for-sale:
Equity securities
¥3,397
¥6,965
26
1
¥3,396
¥6,537
26
0
Other securities
¥(135)
¥10,227
28
March 31, 2013
Available-for-sale:
Equity securities
Other securities
¥(117)
¥9,815
27
Thousands of
U.S. dollars
Unrealized
Unrealized
Cost
Gains
Losses
$32,980
$67,621
252
9
Fair Value
March 31, 2014
Available-for-sale:
Equity securities
Other securities
68
$(1,310)
$99,291
Carrying amounts of available-for-sale securities, whose fair value is not readily determinable, are disclosed in Note 13.
271
4. INVENTORIES
Inventories at March 31, 2014 and 2013, consisted of the following:
Millions of yen
March 31,
2014
Merchandise and finished products
Work-in-process
Raw materials and supplies
Total
March 31,
2014
2013
¥ 545
Thousands of
U.S. dollars
¥ 451
$ 5,291
6,079
4,019
59,019
32,684
28,242
317,320
¥39,308
¥32,713
$381,631
5. LONG-TERM DEBT
Long-term debt at March 31, 2014 and 2013, consisted of the following:
Millions of yen
March 31,
0.25% to 2.26% (0.25% to 2.26% in 2013) domestic bonds,
due on various dates through 2027
0.99% to 2.95% (0.65% to 2.95% in 2013) loans from
The Development Bank of Japan, due on various dates through 2024
0.52% to 2.20% (0.58% to 2.20% in 2013) loans principally from banks and
insurance companies, due on various dates through 2029
Obligations under finance leases
Total
Less current portion
Long-term debt, less current portion
Thousands of
U.S. dollars
March 31,
2014
2013
¥369,963
¥349,958
$3,591,873
15,436
12,558
149,864
325,050
310,167
3,155,825
8,777
8,417
85,213
719,227
681,101
6,982,786
(77,504)
¥641,723
2014
(65,513)
¥615,588
(752,466)
$6,230,320
All of the Company’s assets are subject to certain statutory preferential rights as collateral for loans from The Development Bank of
Japan, for bonds and for transferred bonds by debt assumption.
The aggregate annual maturities of long-term debt subsequent to March 31, 2014, were as follows:
Years ending March 31,
Millions of yen
Thousands of
U.S. dollars
2015
¥ 77,504
$ 752,466
2016
51,414
499,165
2017
75,293
731,000
2018
123,481
1,198,844
2019
Thereafter
Total
93,389
906,689
298,181
2,894,961
¥719,263
$6,983,135
69
6. RETIREMENT AND PENSION PLANS
The Company has a defined benefit pension plan based on the Defined Benefit Corporate Pension Act, a lump-sum retirement benefit
plan and a defined contribution pension plan. The consolidated subsidiaries have adopted some of these plans. In certain cases, the
Group pays additional retirement benefits for employees.
Year Ended March 31, 2014
(1) The changes in defined benefit obligation for the year ended March 31, 2014, were as follows:
Millions of yen
March 31,
2014
Balance at beginning of year
Thousands of
U.S. dollars
March 31,
2014
¥126,643
$1,229,543
Current service cost
4,356
42,291
Interest cost
2,531
24,572
Actuarial gains
Benefits paid
Past service cost
Balance at end of year
(606)
(5,883)
(7,737)
(75,116)
1,485
14,417
¥126,671
$1,229,815
Note: Except for plans applying the simple method.
(2) The changes in plan assets for the year ended March 31, 2014, were as follows:
Millions of yen
March 31,
2014
Thousands of
U.S. dollars
March 31,
2014
¥124,912
$1,212,737
Expected return on plan assets
2,504
24,310
Actuarial gains
3,030
29,417
Contributions from the employer
Benefits paid
3,076
29,864
(6,088)
(59,106)
¥127,435
$1,237,233
(3) The changes in net defined benefit liabilities and net defined benefit assets for plans applying the simple method for the year ended
March 31, 2014, were as follows:
Millions of yen
March 31,
March 31,
2014
2014
¥760
$7,378
Net periodic benefit cost
120
1,165
Benefits paid
(76)
(737)
Contributions from the employer to plan assets
(81)
(786)
70
Thousands of
U.S. dollars
¥722
$7,009
(4) Reconciliation between the liabilities and assets recorded in the consolidated balance sheet and the balances of defined benefit
obligation and plan assets
Millions of yen
March 31,
2014
Funded defined benefit obligation
Plan assets
(1,237,233)
(22,034)
(213,922)
21,270
¥ (763)
March 31,
2014
206,504
$ (7,407)
Thousands of
U.S. dollars
March 31,
2014
¥ 21,316
$ 206,951
(22,080)
(214,368)
¥ (763)
$ (7,407)
Net defined benefit assets
Net assets arising from defined benefit obligation
$ 1,023,310
(127,435)
Millions of yen
Net defined benefit liabilities
March 31,
2014
¥ 105,401
Unfunded defined benefit obligation
Net assets arising from defined benefit obligation
Thousands of
U.S. dollars
(5) Reconciliation between the liabilities and assets recorded in the consolidated balance sheet and the balances of defined benefit
obligation and plan assets for plans applying the simple method
Millions of yen
Thousands of
U.S. dollars
March 31,
March 31,
2014
2014
¥1,558
Funded defined benefit obligation
(946)
Plan assets
Unfunded defined benefit obligation
Net liabilities arising from defined benefit obligation
$15,126
(9,184)
612
5,941
110
1,067
¥ 722
$ 7,009
Millions of yen
Thousands of
U.S. dollars
March 31,
March 31,
2014
2014
¥736
(13)
¥722
Net liabilities arising from defined benefit obligation
$7,145
(126)
$7,009
(6) The components of net periodic benefit costs for the year ended March 31, 2014, were as follows:
Millions of yen
March 31,
2014
Thousands of
U.S. dollars
March 31,
2014
Service cost
¥ 4,356
$ 42,291
Interest cost
2,531
24,572
(2,504)
(24,310)
Recognized actuarial gains
(3,334)
(32,368)
1,500
14,563
Amortization of prior service cost
Others
Net periodic benefit costs
68
660
¥ 2,617
$ 25,407
71
(7) Net periodic benefit cost for plans applying the simple method for the year ended March 31, 2014, was as follows:
Millions of yen
Thousands of
U.S. dollars
March 31,
March 31,
2014
2014
¥120
Net periodic benefit cost
$1,165
(8) Accumulated other comprehensive income on defined retirement benefit plans as of March 31, 2014
Millions of yen
March 31,
2014
¥ 33
Unrecognized prior service cost
Unrecognized actuarial gains
Total
Thousands of
U.S. dollars
March 31,
2014
$ 320
(3,899)
(37,854)
¥(3,865)
$(37,524)
(9) Plan assets as of March 31, 2014
a. Components of plan assets
Plan assets consisted of the following:
Debt investments
Equity investments
Life insurance company general accounts
Others
Total
48.6%
9.4%
40.2%
1.8%
100.0%
b. Method of determining the expected rate of return on plan assets
The expected rate of return on plan assets is determined considering the long-term rates of return which are expected currently and in
the future from the various components of the plan assets.
(10) Assumptions used for the year ended March 31, 2014, were set forth as follows:
Discount rate
Expected rate of return on plan assets
2.0%
Mainly 2.0%
(11) Defined contribution pension plan cost for the year ended March 31, 2014, was as follows:
Millions of yen
Defined contribution pension plan cost
72
Thousands of
U.S. dollars
March 31,
March 31,
2014
2014
¥1,595
$15,485
Year Ended March 31, 2013
(1) The liability (asset) for employees’ retirement benefits at March 31, 2013, consisted of the following:
Millions of yen
March 31,
2013
Projected benefit obligations
Fair value of plan assets
Prepaid pension cost
¥ 128,307
(125,815)
15,680
Unrecognized prior service cost
Unrecognized actuarial gains
Net liability
(49)
3,597
¥ 21,720
(2) The components of net periodic benefit costs for the years ended March 31, 2013, were as follows:
Millions of yen
March 31,
2013
Service cost
¥ 4,500
Interest cost
2,547
(2,446)
Amortization of prior service cost
16
Recognized actuarial losses
Other
Net periodic benefit costs
290
1,418
¥ 6,326
(3) Assumptions used for the years ended March 31, 2013, were set forth as follows:
2013
Discount rate
Expected rate of return on plan assets
2.0%
Mainly 2.0%
Amortization period of prior service cost
Mainly one year
Recognition period of actuarial gain / loss
Mainly one year
7. SHORT-TERM BORROWINGS
Short-term borrowings consisted of the following:
Millions of yen
March 31,
2014
Loans, principally from banks, with weighted-average interest rates of 0.72%
and 0.81% per annum at March 31, 2014 and 2013, respectively
Commercial paper with weighted-average interest rates of 0.08% and 0.12%
per annum at March 31, 2014 and 2013, respectively
Total
¥18,000
Thousands of
U.S. dollars
March 31,
2014
2013
¥18,000
$174,757
9,000
44,000
87,378
¥27,000
¥62,000
$262,135
73
8. ASSET RETIREMENT OBLIGATIONS
The changes in asset retirement obligations for the years ended March 31, 2014 and 2013, were as follows:
Millions of yen
(Decrease) increase during the period
2014
2013
¥103,879
¥100,843
(7,582)
¥ 96,296
3,035
¥103,879
Thousands of
U.S. dollars
2014
$1,008,533
(73,611)
$ 934,912
Please see Note 1(k) for more detail about reason for decreasing in asset retirement obligations for the years ended March 31, 2014.
9. EQUITY
Japanese companies are subject to the Companies Act of Japan
(the “Companies Act”). The significant provisions in the Companies Act that affect financial and accounting matters are summarized below:
(a) Dividends
Under the Companies Act, companies can pay dividends at any
time during the fiscal year in addition to the year-end dividend
upon resolution at the shareholders meeting. For companies that
meet certain criteria including (1) having a Board of Directors,
(2) having independent auditors, (3) having an Audit & Supervisory Board, and (4) the term of service of the directors is prescribed as one year rather than two years of normal term by its
articles of incorporation, the Board of Directors may declare dividends (except for dividends-in-kind) at any time during the fiscal
year if the Company has prescribed so in its articles of incorporation. However, the Company cannot do so because it does not
meet all the above criteria.
The Companies Act permits companies to distribute dividends-in-kind (noncash assets) to shareholders subject to a certain limitation and additional requirements.
Semiannual interim dividends may also be paid once a year
upon resolution by the Board of Directors if the articles of incorporation of the Company so stipulate. The Companies Act provides certain limitations on the amounts available for dividends
or the purchase of treasury stock. The limitation is defined as the
amount available for distribution to the shareholders, but the
amount of net assets after dividends must be maintained at no
less than ¥3 million.
74
(b) Increases / decreases and transfer of common stock, reserve
and surplus
The Companies Act requires that an amount equal to 10% of
dividends must be appropriated as a legal reserve (a component
of retained earnings) or as additional paid-in capital (a component of capital surplus) depending on the equity account charged
upon the payment of such dividends, until the total aggregate
amount of legal reserve and additional paid-in capital equals
25% of the amount of common stock. Under the Companies Act,
the total amount of additional paid-in capital and legal reserve
may be reversed without limitation. The Companies Act also provides that common stock, legal reserve, additional paid-in capital, other capital surplus and retained earnings can be transferred
among the accounts under certain conditions upon resolution at
the shareholders meeting.
(c) Treasury stock and treasury stock acquisition rights
The Companies Act also provides for companies to purchase treasury stock and dispose of such treasury stock by resolution of the
Board of Directors. The amount of treasury stock purchased cannot exceed the amount available for distribution to the shareholders which is determined by specific formula. Under the
Companies Act, stock acquisition rights are presented as a separate component of equity. The Companies Act also provides that
companies can purchase both treasury stock acquisition rights
and treasury stock. Such treasury stock acquisition rights are
presented as a separate component of equity or deducted directly from stock acquisition rights.
10. INCOME TAXES
The Group is subject to several taxes based on income. The aggregate normal statutory tax rates for the Company approximated 33% for
the years ended March 31, 2014 and 2013. Such rates for the consolidated subsidiaries approximated 38% for the years ended March
31, 2014 and 2013.
The tax effects of significant temporary differences which resulted in deferred tax assets and liabilities at March 31, 2014 and 2013,
were as follows:
Millions of yen
March 31,
Thousands of
U.S. dollars
March 31,
2014
2013
2014
Deferred Tax Assets:
¥ 23,130
¥ 21,354
$ 224,563
11,557
11,920
112,203
Asset retirement obligations
10,076
12,404
97,825
Tax loss carryforwards
Liability for retirement benefits
7,194
7,228
Intercompany profit elimination
4,351
4,644
42,242
Reserve for reprocessing of irradiated nuclear fuel
4,771
5,427
46,320
Accrued bonuses
1,845
2,022
17,912
10,413
11,333
101,097
Other
70,174
Less valuation allowance
(7,264)
(6,613)
(70,524)
Total
66,110
69,689
641,844
Deferred Tax Liabilities:
Prepaid pension cost
(4,946)
(6,807)
(2,927)
(1,913)
(66,087)
(28,417)
Net unrealized gain on available-for-sale securities
(19,436)
(2,002)
(1,882)
Other
(733)
(2,803)
(7,116)
Total
(12,470)
(11,545)
(121,067)
Net Deferred Tax Assets
¥ 53,639
¥ 58,143
$ 520,766
A reconciliation between the normal effective statutory tax rate and the actual effective tax rate reflected in the accompanying consolidated statements of operations for the years ended March 31, 2014 and 2013, is omitted, as net loss was recorded.
New tax reform laws enacted in 2014 in Japan changed the normal effective statutory tax rate for the fiscal year beginning on or after
April 1, 2014. The effect of this change was to decrease deferred tax assets in the consolidated balance sheet as of March 31, 2014
by ¥1,328 million ($12,893 thousand), to increase income taxes—deferred in the consolidated statement of operations for the year
then ended by ¥1,360 million ($13,203 thousand) and to increase accumulated other comprehensive income in the consolidated balance sheet as of March 31, 2014 by ¥31 million ($300 thousand).
At March 31, 2014, the Company has deferred tax assets relating to tax loss carryforwards of ¥23,130 million ($224,563 thousand),
which have the effect to reduce future income tax. These deferred tax assets relating to tax loss carryforwards, if not utilized, will expire
as follows:
Year ending March 31,
Millions of yen
Thousands of
U.S. dollars
2022
¥ 1,608
$ 15,611
2023
19,224
186,640
2024 and thereafter
Total
2,297
22,300
¥23,130
$224,563
75
11. RESEARCH AND DEVELOPMENT COSTS
Research and development costs charged to income were ¥4,435 million ($43,058 thousand) and ¥5,055 million for the years ended
March 31, 2014 and 2013, respectively.
12. LEASES
The Group accounted for leases, which existed at the transition date and which did not transfer ownership of the leased property to the
lessee, as operating lease transactions.
[Lessee]
Pro forma information of leased property under finance leases that do not transfer ownership of the leased property to the lessee on an
“as if capitalized” basis for the years ended March 31, 2014 and 2013, was as follows:
Millions of yen
2014
Thousands of
U.S. dollars
2014
2013
Other Facilities:
Acquisition cost
Net leased property
¥108
¥721
105
704
$1,048
1,019
¥ 3
¥ 16
$ 29
Obligations under finance leases:
Millions of yen
Due within one year
Due after one year
Total
2014
2013
¥ 811
¥ 977
Thousands of
U.S. dollars
2014
$ 7,873
1,203
2,028
11,679
¥2,015
¥3,006
$19,563
The imputed interest expense portion, which is computed using the interest method, is excluded from the above obligations
under finance leases. Obligations under finance leases include sublease rentals.
Other information under finance leases for the years ended March 31, 2014 and 2013, was as follows:
Millions of yen
2014
Lease payments
Depreciation expense
Thousands of
U.S. dollars
2014
2013
¥51
¥98
$495
13
30
126
0
1
0
Interest expense
Depreciation expense and interest expense, which are not reflected in the accompanying consolidated statement of operations, are
computed by methods similar to the declining-balance method and the interest method, respectively.
The minimum lease payments under noncancellable operating leases subsequent to March 31, 2014 and 2013, were as follows:
Millions of yen
2014
Due within one year
Due after one year
Total
76
¥109
2013
¥148
Thousands of
U.S. dollars
2014
$1,058
12
112
116
¥121
¥261
$1,174
[Lessor]
Information of leased property under finance leases for the years ended March 31, 2014 and 2013, was as follows:
Other Facilities
Millions of yen
2014
Acquisition cost
2014
2013
¥4
4
Net leased property
Thousands of
U.S. dollars

¥0
Future lease revenue under finance leases at March 31, 2014 and 2013, was as follows:
Millions of yen
Due within one year
Due after one year
Total
2014
2013
¥ 928
¥1,075
Thousands of
U.S. dollars
2014
$ 9,009
1,388
2,332
13,475
¥2,317
¥3,408
$22,495
The imputed interest revenue portion which is computed using the interest method, is excluded from the above future lease revenue
under finance leases. Future lease revenue under finance leases includes sublease revenue.
Other information under finance leases at March 31, 2014 and 2013, was as follows:
Millions of yen
2014
Lease revenue
Thousands of
U.S. dollars
2014
2013
¥0
Depreciation expense
Interest revenue
0
The minimum lease revenue under noncancelable operating leases subsequent to March 31, 2014 and 2013, was as follows:
Millions of yen
2014
Due within one year
Due after one year
Total
Thousands of
U.S. dollars
2014
2013
¥15
¥18
15
25
$145
145
¥30
¥43
$291
[Sublease]
Lease investment assets and lease obligations without deducting interest expense in the accompanying consolidated balance sheet as
of March 31, 2014, under sublease transactions were as follows:
Millions of yen
Thousands of
U.S. dollars
2014
2013
2014
¥8,569
¥8,173
$83,194
Current liabilities
1,282
1,124
12,446
Noncurrent liabilities
7,287
7,048
70,747
Lease investment assets:
Current assets
Lease obligations:
77
13. FINANCIAL INSTRUMENTS AND RELATED DISCLOSURES
(1) Group policy for financial instruments
The Group uses financial instruments, mainly long-term debt,
including bonds and loans, based on its capital financing plan.
Short-term borrowings are used to fund ongoing operations. Cash
surpluses, if any, are invested in low-risk financial assets. Derivatives are used not for speculative purposes, but to manage exposure to financial risks as described in (2) below.
(2) N
ature and extent of financial instruments and
risk management
Investment securities, mainly equity instruments for ensuring
stable and efficient operation of the electric utility business, are
managed by monitoring market values and financial position of
issuers on a regular basis.
Under the law applicable to electric utility companies, a fund
for reprocessing of irradiated nuclear fuel is provided for the reprocessing of spent fuel at nuclear power stations.
Accounts receivable are mostly for electricity charges and
managed individually.
The repayments of bonds and loans are primarily long-term,
and the interest rates for them are fixed. Although they are exposed to market risks from changes in interest rates, fluctuations
in interest have only a limited impact on the Group.
Payment terms of payables, such as trade notes and trade accounts, are less than one year.
Derivatives mainly include foreign exchange forward contracts
and interest rate swaps, which are used to manage exposure to
market risks from changes in foreign currency exchange rates of
payables and from changes in interest rates of loans. The counterparties to these derivatives are limited to major international
financial institutions with high credit ratings. Therefore, the
Group does not anticipate any losses arising from credit risk.
Derivative transactions are executed and controlled by the Accounting Department. Please see Note 14 for more details about
derivatives.
(3) Fair values of financial instruments
Fair values of financial instruments are based on quoted price in active markets. If quoted price is not available, other rational valuation
techniques are used instead. Please also see Note 14 for the details of fair value for derivatives.
Millions of yen
March 31, 2014
Investment securities
Fund for reprocessing of irradiated nuclear fuel
Cash and cash equivalents
Carrying Amount
Fair Value
¥ 10,255
¥ 10,255
110,456
110,456
11,109
11,109
Unrealized Gain / Loss
79,344
79,344
Total
¥211,166
¥211,166
Bonds
¥369,963
¥384,873
¥14,909
340,486
351,464
10,978
27,000
27,000
Notes and accounts receivable
Long-term loans
Short-term borrowings
Notes and accounts payable
Total
55,083
55,083
¥792,532
¥818,420
¥25,887
Carrying Amount
Fair Value
¥ 9,843
¥ 9,843
116,146
116,146
Millions of yen
March 31, 2013
14,351
14,351
59,411
59,411
Total
¥199,752
¥199,752
Bonds
¥349,958
¥363,819
¥13,860
322,725
333,505
10,780
62,000
62,000
Long-term loans
Total
78
48,244
48,244
¥782,928
¥807,568
¥24,640
Thousands of
U.S. dollars
March 31, 2014
Carrying Amount
$ 99,563
$ 99,563
1,072,388
1,072,388
Fair Value
107,854
107,854
770,330
770,330
Total
$2,050,155
$2,050,155
Bonds
$3,591,873
$3,736,631
$144,747
3,305,689
3,412,271
106,582
262,135
262,135
Long-term loans
534,786
534,786
$7,694,485
$7,945,825
Total
$251,330
Notes: 1.Bonds and long-term loans in the above table include the current portion of such instruments.
2.At March 31, 2014 and 2013, investment securities whose fair values cannot be reliably determined were ¥34,300 million ($333,009 thousand) and ¥34,353 million, respectively, and their carrying
amounts were not included in the above table.
The fair values of investment securities are measured at the
quoted market price of the stock exchange for the equity instruments. The information of the fair value for investment securities
by classification is included in Note 3.
Financial instruments whose fair value cannot be reliably determined are not included in the tables above.
Contributions to the fund for reprocessing of irradiated nuclear
fuel are made in accordance with the Spent Nuclear Fuel Reprocessing Fund Act for the purpose of appropriate reprocessing of
irradiated nuclear fuel, which is associated with the operation of
a nuclear reactor.
The Company is required to follow the plan on funding as
determined by the Minister of Economy, Trade and Industry.

As the carrying amount of this plan is based on the amount
equivalent to the present value, the fair value is equal to the
carrying amount.
The carrying values of cash and cash equivalents approximate
fair value because of their short maturities.
Bonds
The fair values of bonds are measured at the quoted market price.
Long-term loans
The fair value of long-term loans is determined by discounting
the cash flows related to the debt at the Group’s assumed corporate borrowing rate.
Short-term borrowings, notes and accounts receivable and payable
The carrying values of short-term borrowings, notes and accounts
receivable and payable approximate fair value because of their
short maturities.
Derivatives
The information of the fair value for derivatives is included in
Note 14.
(4) Maturity analysis for financial assets and securities with contractual maturities
Millions of yen
Due in One Year
March 31, 2014
Total
Thousands of
U.S. dollars
Due in One Year
or Less
or Less
¥11,109
$107,854
79,344
770,330
¥90,454
$878,194
The estimated refund from the fund for reprocessing of irradiated nuclear fuel will be ¥10,890 million ($105,728 thousand) in the next
fiscal year.
Please see Note 5 for annual maturities of long-term debt.
79
14. DERIVATIVES
The Company uses derivative financial instruments (“derivatives”), including foreign exchange forward contracts and currency swaps, to
hedge foreign exchange risk associated with certain assets and liabilities denominated in foreign currencies. The Company also enters
into interest rate swap contracts as a means of managing its interest rate exposure on certain liabilities. The Company does not hold or
issue derivatives for trading or speculation purposes.
The counterparties to these derivatives are limited to major international financial institutions with high credit ratings. Therefore, the
Company does not anticipate any losses arising from credit risk.
There were no derivative transactions to which hedge accounting is not applied at March 31, 2014.
Derivative transactions to which hedge accounting is applied at March 31, 2014, were as follows:
Millions of yen
Contract Amount due
March 31, 2014
Hedged Item
Contract Amount
after One Year
Fair Value
Foreign exchange forward contracts:
Buying U.S.$
Payables and Forecasted transactions
Total
¥43,921
¥38,570
¥9,535
¥43,921
¥38,570
¥9,535
Thousands of
U.S. Dollars
Contract Amount due
March 31, 2014
Hedged Item
Contract Amount
after One Year
Fair Value
Buying U.S.$
Total
$426,417
$374,466
$92,572
$426,417
$374,466
$92,572
Notes1.The fair value of derivative transactions is measured at the quoted price obtained from the financial institution.
2.The amount of long-term debt which includes derivative transactions to fix the interest rates is ¥17,000 million ($165,048 thousand).
There were no derivative transactions to which hedge accounting is not applied at March 31, 2013.
Derivative transactions to which hedge accounting is applied at March 31, 2013, were as follows:
Millions of yen
Contract Amount due
March 31, 2013
Hedged Item
Contract Amount
after One Year
Fair Value
Buying U.S.$
Buying U.K.£
Total
¥49,404
¥43,921
93
¥49,497
¥6,136
(0)
¥43,921
¥6,136
Interest rate swaps:
Pay fixed / Receive floating
Receive fixed / Pay floating
Total
Long-term debt
¥12,000
¥ (20)
6,000
(*)
¥18,000
¥ (20)
(*) The fair value of interest rate swaps is included in that of the hedged items because the interest rate swaps are combined with the hedged item if they qualify for hedge accounting and meet specific matching criteria.
Notes1.The fair value of derivative transactions is measured at the quoted price obtained from the financial institution.
2.The amount of long-term debt which includes derivative transactions to fix the interest rates is ¥5,000 million.
80
15. COMMITMENTS AND CONTINGENT LIABILITIES
(a) Fuel Purchase Commitments
At March 31, 2014, the Company had a number of fuel purchase commitments, most of which specify quantities and dates for fuel
deliveries. However, purchase prices are contingent upon fluctuations of market prices.
(b) At March 31, 2014, total contingent liabilities were as follows:
Millions of yen
Thousands of
U.S. dollars
Co-guarantees of loans of other companies:
¥ 51,440
$ 499,417
Al Suwadi Power Company S.A.O.C.
607
5,893
Al Batinah Power Company S.A.O.C.
576
5,592
1,081
10,495
Ras Girtas Power Company Q. S. C.
802
7,786
Other
300
2,912
17,776
172,582
Japan Nuclear Fuel Limited
Tosa Power Co., Inc.
Guarantees of employees’ housing loans
Guarantees under debt assumption agreements
Total
110,000
1,067,961
¥182,586
$1,772,679
16. COMPREHENSIVE INCOME
The components of other comprehensive income for the years ended March 31, 2014 and 2013, were as follows:
Millions of yen
2014
Thousands of
U.S. dollars
2014
2013
Unrealized gain on available-for-sale securities:
Gains arising during the year
¥ 411
¥ 1,756
411
1,756
$ 3,990
Reclassification adjustments to profit or loss
Amount before income tax effect
Income tax effect
Total
(127)
(539)
3,990
(1,233)
¥ 284
¥ 1,216
$ 2,757
¥ 4,356
¥ 8,535
$42,291
328
9,097
Deferred gain on derivatives under hedge accounting:
Adjustments for amounts transferred to
the initial carrying amounts of hedged items
Amount before income tax effect
Income tax effect
Total
(937)
0
3,419
(1,020)
(58)
8,805
(2,755)
0
33,194
(9,902)
¥ 2,398
¥ 6,049
$23,281
¥ 22
¥ 110
$ 213
90
135
Share of other comprehensive income in associates:
(14)
Total
¥ 7
¥ 200
$67
Total other comprehensive income
¥ 2,691
¥ 7,466
$26,126
81
17. RELATED-PARTY TRANSACTIONS
Significant transactions of the Company with directors and Audit & Supervisory Board Members, unconsolidated subsidiaries and an
affiliated company for the years ended March 31, 2014 and 2013, were as follows:
Yondenko Corporation
(The Company owns 32.4% of the common stock of Yondenko Corporation at March 31, 2014)
Millions of yen
2014
Thousands of
U.S. dollars
2014
2013
Transactions:
Construction
¥18,389
¥18,421
$178,533
Maintenance
14,303
14,537
138,864
¥ 4,181
¥ 3,957
$ 40,592
Balances:
Other current liabilities
18. PER SHARE INFORMATION
Basic net loss per share (“EPS”) for the years ended March 31, 2014 and 2013, was as follows:
Millions of yen
Net Loss Available to
For the year ended:
Common Shareholders
Thousands of shares
Yen
U.S. dollars
Weighted Average
Shares
EPS
March 31, 2014
¥ (3,289)
205,970
¥ (15.97)
March 31, 2013
¥(42,886)
205,979
¥(208.21)
$(0.15)
19. SEGMENT INFORMATION
Under ASBJ Statement No.17, “Accounting Standard for Segment Information Disclosures” and ASBJ Guidance No.20,
“Guidance on Accounting Standard for Segment Information
Disclosures”, an entity is required to report financial and descriptive information about its reportable segments. Reportable segments are operating segments or aggregations of operating
segments that meet specified criteria. Operating segments are
components of an entity about which separate financial information is available and such information is evaluated regularly by
the chief operating decision maker in deciding how to allocate
resources and in assessing performance. Generally, segment information is required to be reported on the same basis as is used
internally for evaluating operating segment performance and deciding how to allocate resources to operating segments.
1. Description of reportable segments
The Group’s reportable segments are those for which separate financial information is available and regular evaluation by the Company’s
management is being performed in order to decide how resources are allocated among the Group.
For the year ended March 31, 2014, the Group’s reportable segments were reclassified into two segments: “Electric utility” and “IT/
Communications” from the previous segment: “Electric utility”
Segment information for the year ended March 31, 2013, is also disclosed using the new segmentation.
2. Methods of measurement for the amounts of sales, profit (loss), assets and other items for each reportable segment
The accounting policies of each reportable segment are consistent to those disclosed in Note 1, “Significant accounting and reporting policies”. Reportable segment profit is based on operating income. Also, intersegment sales or transfers are computed based on market price.
82
3. Information about sales, profit (loss), assets and other items of the Group for the years ended March 31, 2014 and 2013 (restated to
conform to 2014 classifications), was as follows:
Millions of yen
Reportable segments
Electric Utility
IT/
Communications
Total
Other
Total
Adjustments
Consolidated
2014
Sales
Sales to external customers
Intersegment sales or transfers
¥ 551,148
¥21,382
¥ 572,531
¥ 63,801
¥ 636,332
1,174
8,567
9,742
71,837
81,579
135,638
717,912
(81,579)
636,332
Segment (loss) profit
¥ (5,075)
¥ 3,622
¥ (1,452)
¥ 4,561
¥ 3,109
¥ (394)
¥ 2,715
Segment assets
¥1,323,570
¥38,787
¥1,362,358
¥124,526
¥1,486,885
¥(89,607)
¥1,397,277
57,073
4,508
61,581
6,122
67,704
(1,475)
66,229
Increase in property, plant and equipment
and intangible assets
58,797
14,585
73,382
2,336
75,718
(1,915)
73,802
Total
552,323
29,950
582,274
¥ 636,332
¥(81,579)
Other:
Millions of yen
Reportable segments
Electric Utility
IT/
Communications
Total
Other
Total
Adjustments
Consolidated
2013
Sales
Total
¥ 487,012
¥20,035
¥ 507,047
¥ 54,736
¥ 561,783
1,183
9,369
10,553
68,661
¥79,214
488,195
29,404
517,600
123,397
640,998
¥ 561,783
¥(79,214)
(79,214)
561,783
¥ (59,193)
¥ 4,575
¥ (54,618)
¥ 4,229
¥ (50,388)
¥ 50
¥ (50,337)
Segment assets
¥1,307,206
¥32,032
¥1,339,238
¥136,541
¥1,475,779
¥(90,339)
¥1,385,440
60,454
4,334
64,789
6,177
70,967
(1,503)
69,463
53,151
6,585
59,736
5,690
65,427
(1,485)
63,941
Other:
Notes:1. ”Other” consists of electrical and mechanical engineering, production and sales of electric appliances and others.
2. Amounts of adjustment were as follows:
• The amount of adjustment of segment loss of ¥50 million, which represents transactions made between segments, is eliminated.
Segment loss, after this adjustment, is consistent with the operating loss.
• The amount of adjustment of segment assets of ¥(90,339) million, which represents transactions made between segments, is eliminated.
• The amount of adjustment of depreciation of ¥(1,503) million, which represents transactions made between segments, is eliminated.
• The amount of adjustment of increase in property, plant and equipment and intangible assets of ¥(1,485) million, which represents transactions made between segments, is eliminated.
83
Thousands of U.S. dollars
Reportable segments
Electric Utility
IT/
Communications
Total
Other
Total
$ 5,350,951
$207,592
$ 5,558,553
$ 619,427
$ 6,177,980
11,398
83,174
94,582
697,446
792,029
Adjustments
Consolidated
2014
Sales
1,316,873
6,970,019
(792,029)
6,177,980
$ (49,271)
$ 35,165
$ (14,097)
$ 44,281
$ 30,184
$ (3,825)
$ 26,359
Segment assets
$12,850,194
$376,572
$13,226,776
$1,208,990
$14,435,776
$(869,970)
$13,565,796
554,106
43,766
597,873
59,436
657,320
(14,320)
643,000
570,844
141,601
712,446
22,679
735,126
(18,592)
716,524
Total
5,362,359
290,776
5,653,145
$ 6,177,980
$(792,029)
Other:
Notes:1. ”Other” consists of electrical and mechanical engineering, production and sales of electric appliances and others.
2. Amounts of adjustment were as follows:
• The amount of adjustment of segment profit of ¥(394) million ($3,825 thousand), which represents transactions made between segments, is eliminated.
Segment profit, after this adjustment, is consistent with the operating profit.
• The amount of adjustment of segment assets of ¥(89,607) million ($(869,970) thousand), which represents transactions made between segments, is eliminated.
• The amount of adjustment of depreciation of ¥(1,475) million ($(14,320) thousand), which represents transactions made between segments, is eliminated.
• The amount of adjustment of increase in property, plant and equipment and intangible assets of ¥(1,915) million ($(18,592) thousand), which represents transactions made between segments, is
eliminated.
84
Independent Auditor’s Report
85
Corporate Information
Organization
Corporate Planning Dept.
Business Planning Dept.
Environmental Affairs Dept.
Thermal Power Dept.
Fuels Dept.
Anan Thermal Power Office
Thermal Power Stations (Anan, Tachibana-wan)
Thermal Power Stations (Saijo, Sakaide)
Nuclear Power Dept.
Nuclear Fuel Dept.
Nuclear Research & Training Center
System Operation & Transmission Division
Power System Operation Dept.
Audit & Supervisory Board
Member
Transmission & Substation Dept.
Hydropower Dept.
Members’ Office
Customer Service Division
Industrial and Commercial Customer Service Dept.
Board of Directors
Chairman of the Board
Board of
Managing
Directors
Residential Customer Service Dept.
Distribution Dept.
Tokyo Branch Office
Executive Vice President
and Director
Managing Director
Meeting of Managing Staff
Secretary Dept.
Branch Offices
Public Relations Dept.
Sales & Customer Services Dept.
Plant & Facilities Sitting Dept.
Electrical Engineering Dept.
Sales & Customer Services Offices
Internal Audit Dept.
Internal Nuclear Quality Assurance Audit Dept.
Accounting & Finance Dept.
Purchasing & Materials Dept.
Employee Relations & Human Resources Dept.
General Education & Training Center
General Medical Services Center
Information Systems & Telecommunications Dept.
Civil & Architectural Engineering Dept.
86
Subsidiaries and Affiliated Companies
Company Name
Electric Utility
IT /
Communications
Year of
Foundation
TOSA POWER Inc.
2003
Electricity supply business
STNet, Incorporated*
1984
Telecommunication services (FTTH, etc.) and information
system services
Cable Media Shikoku Company, Incorporated
1995
Cable TV broadcasting and telecommunication businesses
Cable Television Tokushima, Incorporated
1987
Cable TV broadcasting and telecommunication businesses
SHIKOKU INSTRUMENTATION CO., LTD.*
1951
Manufacture and sales of automatic gauging control,
information transmission system, etc.
Techno-Success Company, Incorporated
1990
Manufacture and sales of transmission and distribution
equipment
SHIHEN TECHNICAL CORPORATION
1946
Manufacture and sales of transformer and other electric
equipment
Eco-Tech Company, Incorporated
1992
Development, manufacture, and sales of materials for
environment preservation
Yonden Engineering Company, Incorporated*
1970
Study, designing, engineering, and maintenance of
electricity-related facilities
Yonden Consultants Company, Incorporated*
1982
Planning and designing of civil works and construction, and
supervision of engineering works
YONDENKO CORPORATION*
1963
Engineering works for power supply facilities
Shikoku Research Institute, Incorporated*
1987
Research and development on technologies related to electric
utility business and other
Yonden Business Company, Incorporated*
1961
Real estate, planning and production of advertisements, and
office-related services
Yonden Energy Service Company, Limited*
1971
Sales and engineering of electric hot water heaters and
air-conditioning systems
Yonden Life Care Company, Incorporated
2002
Operation of charged nursing facilities for the aged
SHIKOKU AIR SERVICE CO., LTD.
1956
General aviation using aircraft and tourist agency
Ikata Service Company, Incorporated
1995
Local community development and management services of
Yonden Media Works Company, Incorporated
2001
Video production and other related services
Sakaide LNG Company, Incorporated*
2004
Construction and operation of LNG fuel bases; storage and
delivery of LNG
Tachibana Thermal Power Port Service
Company, Limited
1998
Harbor unloading of coals imported from overseas to use at
Tachibana-wan Thermal Power Station
MISAKI WIND POWER Co., Ltd.
2004
Wind power generation business
Okawara Windfarm Corporation
2006
Ei Wind Power Company, Incorporated
2006
Utazu Kyushoku Service Co., Ltd.
2006
General maintenance, servicing, and management of school
catering facility
Tokushimaichiko PFI Service Co., Ltd.
2007
Facilities and maintenance of Tokushima Municipal
High School
SEP International Netherlands B.V.
2011
Investment and financing for overseas projects
(a subsidiary company for international investments)
Manufacturing
Construction
Research and
Development
Real Estate,
Energy, Services,
and Others
Principal Business
* Covered by consolidated financial statements (YONDENKO CORPORATION is accounted for by the equity method)
87
Corporate History
1951
1963
1965
May
Jul.
Nov.
1968
1971
Jul.
Jul.
1972
Aug.
1973
Apr.
Oct.
Aug.
Sep.
1977
1979
1982
1988
Mar.
Jun.
Oct.
1990
Jul.
1994
Jul.
Dec.
Dec.
Mar.
Jun.
Jan.
Mar.
Mar.
Oct.
1999
2000
2001
2004
2005
2008
2010
2011
2012
2013
Apr.
Jul.
Aug.
Mar.
Aug.
Dec.
Feb.
Mar.
Jan.
Feb.
Jul.
Sep.
Shikoku Electric Power Company, Incorporated, established
Our first thermal power station, Anan Thermal Power Station Unit No. 1 (125 MW), commenced operations
Saijo Thermal Power Station No. 1 (156 MW) commenced operations
(thermal power stations surpassed hydropower stations in terms of approved maximum output in the fiscal year ended
March 31, 1966 (thermal power became primary and hydropower secondary))
Peak load exceeded 1,000 MW
Sakaide Thermal Power Station Unit No. 1 (195 MW), incorporating Japan’s first combined-cycle power generation systems
(gas turbine and steam turbine), commenced operations
Peak load exceeded 2,000 MW and annual electricity sales in the fiscal year ended March 31, 1973, exceeded
10 billion kWh
Sakaide Thermal Power Station Unit No. 3 (450 MW) commenced operations
First Oil Shock energy crisis occurred
Our first nuclear power station, Ikata Nuclear Power Station Unit No. 1 (566 MW), commenced operations
Second Oil Shock energy crisis occurred
Ikata Nuclear Power Station Unit No. 2 (566 MW) commenced operations
Hongawa Pumped-Storage Power Station Unit No. 1 (300 MW) commenced operations
Started to visit and hold explanatory meetings at the 20,000 homes that fell within 10 km of Ikata Nuclear Power Station
(and has been continued every fall since)
Peak load exceeded 4,000 MW and annual electricity sales in the fiscal year ended March 31, 1991, exceeded
20 billion kWh
Ikata Nuclear Power Station Unit No. 3 (890 MW) commenced operations and total output reached 2,022 MW
Ikata Nuclear Power Station adopted the “Ikata System” of prompt, highly transparent disclosure of information
Deregulation of electricity retail market for extra-high-voltage power
Tachibana-wan Thermal Power Station (700 MW) commenced operations
Started to purchase and cancel treasury stock (began cancelling treasury stock in October)
Customer Information Center commenced operations
2010 Yonden Group Vision announced
STNet, Incorporated, started Pikara Optical Cable Internet Services, an optical telecommunication service
for individual households
Deregulation of electricity retail market for high-voltage power occurred
Participated in the first overseas IPP business, Ras Laffan C Power and Water Project in Qatar
First LNG terminal completed; introduced LNG to the Sakaide Thermal Power Station Unit No. 4 (350 MW) and
commenced operations
Pluthermal power generation started at the Ikata Nuclear Power Station Unit No. 3
Introduced LNG to the Sakaide Thermal Power Station Unit No. 1 (296 MW) and commenced operations
Matsuyama Solar Power Station expansion plan phase I (2.042 MW) completed
New Yonden Group Vision announced
Great East Japan Earthquake and an accident at a nuclear power plant in Fukushima Prefecture occurred
Operation of all units of Ikata Nuclear Power Plant halted
Peak winter-time load exceeded 5,220 MW
Applications submitted to confirm the compliance of Ikata Unit No. 3 with the new regulatory standards
Electricity rates raised for customers in regulated categories
(electricity rates raised for customers in deregulated categories in July 2013)
Trends in Electricity Sold and Peak Load
Billion kWh
9
20
6
10
3
0
1951
Electricity sold
88
Million kW
30
1960
■ Peak load (right scale)
1970
1980
1990
2000
2010
2013
0
FY
Corporate Data and Stock Information
Corporate Data
Share Ownership Distribution (by Region)
Corporate Name
Shikoku Electric Power Company, Incorporated
URL
http://www.yonden.co.jp/english/
Head Office
2-5, Marunouchi, Takamatsu,
Kagawa 760-8573, Japan
Date of Establishment
May 1, 1951
Paid-in Capital
¥145,551,921,500
Hokkaido
398
(0.4%)
Kinki
Tohoku
14,782
(16.0%)
Stock Information
Total Number of Shares
Authorized to be Issued
772,956,066
Total Number of Shares Issued
223,086,202
Number of Shareholders
92,261
Stock Exchange Listing
The Tokyo Stock Exchange
Share Transfer Agency
Department
Sumitomo Mitsui Trust Bank, Limited
1-4-1, Marunouchi, Chiyoda-ku,
Tokyo 100-8233, Japan
Kyushu*
Chugoku
1,929
(2.1%)
3,115
(3.4%)
Kanto
17,287
(18.7%)
Shikoku
45,906
(49.8%)
* Including Okinawa Prefecture
Independent Auditors
Deloitte Touche Tohmatsu
Business Year
From April 1 to March 31 of the next year
General Meeting of Shareholders
June every year
633
(0.7%)
Chubu /
Hokuriku
Overseas
349
(0.4%)
7,862
(8.5%)
Share Ownership Distribution (by Investor Profile)
Principal Shareholders (Top 10)
Thousands
Number of
Shareholding
Shares
(%)
(Thousands)
Name
● Local Government
The Iyo Bank, Ltd.
8,851
4.0%
The Hyakujushi Bank, Ltd.
8,846
4.0%
Nippon Life Insurance Company
8,329
3.7%
SUMITOMO JOINT ELECTRIC POWER CO., LTD.
7,062
3.2%
Kochi Prefecture
6,230
2.8%
The Master Trust Bank of Japan, Ltd.
(Trust account)
5,635
2.5%
Japan Trustee Services Bank, Ltd. (Trust account)
5,251
2.4%
Shikoku Electric Power Employee Stock Ownership
4,645
2.1%
● Foreigners
26,064
(11.7%)
Meiji Yasuda Life Insurance Company
4,001
1.8%
The Shikoku Bank, Ltd.
2,749
1.2%
● Financial
Organizations, etc.
6,278 (2.8%)
Institutions
70,052
(31.4%)
● Treasury Stock
15,493 (6.9%)
223,086
● Individuals
thousands of shares
and Others
85,027
(38.2%)
● Securities
Companies
1,406 (0.6%)
● Other
Corporations
18,766
(8.4%)
Monthly Share Price and Trading Volume
Yen
Millions of shares
5,000
50
4,000
40
3,000
30
2,000
20
1,000
10
0
2008
2009
2010
Share price (as of the end of the month) ■ Trading volume (right scale)
2011
2012
2013
0
FY
89
Tel +81-87-821-5061
URL http://www.yonden.co.jp/
2014
Yonden Group Annual Report
Business and CSR Activities
This report was printed on FSC®-certified paper using vegetable oil ink and a waterless printing process.
Printed in Japan

Annual Report 2014

Transcription

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