Summary of Comments Made at a Press Conference
by Hiroshi Araki, FEPC Chairman, 22 January 1999.

22 January 1999

Welcome to the year's first press conference. I believe that this year's main themes, as in 1998, will be the establishment of concrete rules for partial liberalization, preparations for the increased competition that this will bring, and further development of nuclear power generation. Concerning this last theme, the promotion of an efficient nuclear fuel cycle and various back-end measures will be of particular importance. All of these themes will have a major impact on the economy and society in the 21st century, and we are going to do our utmost to address them.

Today there are two topics I would like to discuss. The first is the progress we have made in dealing with the Y2K issue, and the second is the visit of the WANO (World Association of Nuclear Operation) President and Chairman to Japan.

I will begin by commenting on the Y2K issue.

The year 2000 is almost at hand, and public interest in this issue has grown significantly. The FEPC and various electric power companies have received numerous inquiries from the press, and there has been increased coverage of the issue in print and broadcast media.

As I stated at the October 1998 press conference, the electric power industry is addressing the issue on two fronts. The first is the business management systems used to calculate and collect electricity rates. The second is the control systems used to regulate hydro, thermal and nuclear power facilities, as well as substations and other power supply equipment.

Regarding these systems, as is shown in Reference 1, we have already finished screening all systems, and parts needing repairs have been systematically addressed. As of the end of 1998, testing had been completed on about 90% of the business management systems, and about 80% of the control systems. So the necessary repair tasks are clearly on track.

I think that concerns regarding Y2K problems center on whether, when the year 2000 comes, control system problems at nuclear power plants may cause blackouts or voltage irregularities.

As you know, power supply systems must be controlled on a real-time basis to accommodate changes in electricity demand. As a result, they do not rely on pre-programmed date information, and will therefore not be affected by the arrival of the year 2000.

Clock functions contained in individual microchips implanted in computer systems have also been considered, and we have confirmed that there are no problems in areas that are relevant to control systems. These results have been confirmed through careful examination of schematics and specifications in cooperation with chip manufacturers and computer system suppliers.

Incidentally, the task of addressing Y2K problems has been completed at 17 of 51 nuclear power plant units, and at 217 of 305 thermal plant units nationwide. In test trials, we have not found any problems. As the work is being carried out according to regular inspection schedules, some units will not be inspected until later this year. Although there are some who have expressed concerns about the delay, I believe these concerns are groundless, because the system specifications of the remaining units are the same as those of the units which have already been confirmed to be free from any problems.

In conclusion, I believe that the Y2K issue will not have any effect on the power supply. However, in order to ensure that all possible measures have been taken, each company is gathering information from the trading and oil companies that supply them with fuel ﾑ even though their computer systems are not directly linked. In addition, we expect to announce a comprehensive risk management plan by June 1999.

Progress reports on our efforts to address this issue have been posted on the FEPC and electric power company websites since November 1998. We encourage you to refer to them for information.

Next, I would like to move on to the visit of the WANO President and Chairman to Japan.

Today, Mr. Allan Kupcis, WANO President, and Mr. Zack Pate, WANO Chairman called at the FEPC to address our presidential meeting.

Please see Reference 2. WANO is a non-governmental organization established in 1989 in the aftermath of the accident at the Chernobyl nuclear power plant. Its purpose is to improve the safety and credibility of nuclear power plant operations worldwide, and provide a forum free from any political agenda in which its approximately 130 members can exchange technical information. Japan's nine electric power companies, the Japan Atomic Power Company, the Central Research Institute of Electric Power Industry and the Japan Nuclear Cycle Development Institute are all members of WANO.

It seems, however, that willingness to participate in WANO activities is gradually waning due to fading memories of the accident at Chernobyl, improved operating performance at nuclear power plants worldwide, lower oil prices, stiff competition among energy sources brought about by deregulation, as well as other factors. In light of these circumstances, the two gentlemen are visiting operators in Korea, China and Japan in order to gain wider understanding and support for WANO, which will celebrate its tenth anniversary this year.

At today's meeting, I was most impressed by the Chairman's talk, in which he expressed concern that economic pressures brought about by the worldwide storm of restructuring and increased competition in the electric power industry may undermine the safety of nuclear power operations.

In the U.S., liberalization of the electricity market has led to increased restructuring. Power plants which are still efficient and have commercial value, such as the Three Mile Island No. 1 unit which was sold in July of last year, have come under new management or had their operating permits renewed. I have also heard that other plants which are considered valueless have been closed even before their operating permits expired. In addition, it seems that plant administration is increasingly being farmed out to outside companies.

I think that such restructuring will extend to other countries in the future. And I fear that the pace will be accelerated by economic pressures, and that this may undermine safety.

Unlike Europe and the U.S., it is expected that nuclear power development in Asia and China ﾑ which is said to be the largest nuclear power market in the world ﾑ will move forward rapidly. In some areas, however, information-disclosure and safety policies are only loosely defined, and operators have limited nuclear power plant construction and operating experience. There are also many countries such as Indonesia and Vietnam where commercial nuclear power is still only in the planning stage.

As Mr. Zack Pate, the Chairman of WANO, pointed out at the meeting, if an accident on the scale of Chernobyl were to occur in one of these countries, the door to future commercial nuclear power development could conceivably be closed forever.

These comments were a powerful reminder that here in Japan, where we are forced to rely on nuclear power in order to conserve resources and address global environmental issues, we must take the lead in ensuring that the highest standards of safety are vigilantly maintained.