Today's press conference is my last as the FEPC chairman.
I express my sincere thanks to all of you for your attention during the past four years. Although I am sad to be leaving, there is also a sense of relief.
At the close of today's meeting, I will introduce the incoming chairman, Mr.Koji Ohta, to you.
First, however, I would like to talk about the electric power industry's risk management plan for dealing with Y2K problems.
We have about six months remaining till the year 2000. I have explained how we are addressing Y2K problems here on several occasions, and I am pleased to report that our efforts continue to be on track.
Control systems that directly affect the power supply, as I have explained before, are used for real-time power supply management, and do not utilize year/month/date information. They are therefore not vulnerable to Y2K-related problems. This fact has also been confirmed for the microchips contained within such systems.
On the other hand, systems used to monitor and record electric equipment status, and business management systems used for rate calculations, accounting data and materials procurement, do use calendar information. As such, these systems have been the subject of a systematic repair program.
Currently, approximately 99% of "monitoring and recording systems" and almost 100% of "business management systems" have been repaired and tested. Our task is now virtually complete. Testing of these systems has been open to the press and public at each electric power company since the "Open Test" at the No. 6 unit of TEPCO's Kashiwazaki-Kariha Nuclear Power Plant. We intend to continue this "Open Test" policy in the future.
We are fully confident that we will be able to maintain a stable power supply when the year 2000 arrives. However, in view of the pivotal role that electric power plays in the nation's infrastructure, we have decided to alleviate public concern by announcing our risk management plans for each electric power company.
Please see Reference Document No. 2 for information on FEPC guidelines for electric power companies to follow in developing risk management plans. FEPC member companies have for many years been prepared to handle unforeseen accidents at facilities, and natural disasters such as earthquakes and typhoons. We already have a manual that covers the handling of such incidents, and we conduct regular training exercises to ensure preparedness. As such, January 1, 2000 will be like any other day for FEPC member companies, because their Y2K risk management plans build on established procedures. Even if computer problems occur, strengthened standby alert and emergency contact procedures will allow them to respond quickly, and switch to manual operation or back-up systems as necessary. Our member companies are ready to handle blackout situations at any time, and risk management is already built into their daily operating procedures. When typhoons strike, for example, power industry employees differ from employees in other industries in that they are always at their stations, and risk management is part of their daily working life.
In addition to facilities-related Y2K risk management plans, we are also prepared to deal with sudden drops in large industrial user power demand resulting from customer-side Y2K problems, and with temporary interruption in power plant fuel supplies. Our risk management plans include measures to address both of these potential problems.
As an example, I would like to explain what we do on January 1 in a 'normal' year, and what we will be doing differently for the Y2K transition. In a normal year, electricity demand on January 1 decreases to less than 50 % of peak demand, and we rely primarily on nuclear power plants, which have lower running costs than thermal power plants. For the Y2K transition, however, we will operate thermal plants at higher-than-normal levels, because thermal plant output is relatively easy to regulate in response to fluctuations in demand. In addition, any excess power from thermal plants will be diverted to hydroelectric generating facilities, and used to pump water from lower-level dams to upper-level dams. This will give us a great deal of flexibility in balancing supply and demand, and allow us to respond appropriately even if Y2K problems cause a sudden sharp drop in large industrial user demand.
Regarding the possibility of a temporary interruption in the fuel supply, I believe that in TEPCO's case, our regular fuel inventory will be sufficient to cover any contingency. However, in order to doubly sure, we have made plans to set aside certain shipments prior to January 1.
In addition, business management systems used for rate calculations, accounting and materials procurement will be intensively run-in prior to the start of business on January 4. If any problems do arise, we are prepared to process the necessary paperwork by hand.
Each company will establish command centers to deal with the Y2K issue during the December 31, 1999 - January 1, 2000 period. At TEPCO, our usual new year's period workforce of 1300 employees will be increased by 3500 people to ensure complete readiness.
Some of our member companies have already finalized their risk management plans will distribute reference materials to you later.
That concludes my comments for today. I turn you over now to the new FEPC chairman, Mr.Koji Ohta.
Comments by the incoming chairman:
I have just a few words of greeting and introduction for you today.
It was just this past April that my name was put forward as the next chairman of the FEPC. Although it is a difficult time for the electric power industry, I decided to take on the post and do my best to move the industry forward into the future. Two months have since passed, and honestly speaking, I am deeply aware of the magnitude of the responsibility I have taken on.
Mr. Araki, the outgoing FEPC chairman, has exhibited strong leadership during the past four years in addressing deregulation and other pivotal issues of the time. I know his task has been a difficult one, and that his achievements will be hard to match. But now that I have taken over this post, I intend to do the best that I possibly can.
In the near term, I will be working to ensure that market deregulation for retail electric power proceeds smoothly. In addition, there are a lot of issues relating to nuclear power that need to be addressed. These include the introduction of MOX fuels, the signing of a safety agreement for transportation of spent fuel to the Rokkasho Reprocessing Plant, the construction of an interim storage facility for spent fuel, and more. Electric power currently accounts for 40% of Japan's energy needs, and its importance is likely to grow in the future. As such, I want to help lay the groundwork for a basic energy law that will define the nation's future. With the support of FEPC member companies and other concerned parties, I hope to address these issues in the years ahead.
I will undoubtedly be meeting with you and other members of the
energy industry press in the future, and look forward to benefiting
from your support and guidance.