Summary of Comments Made at a Press Conference by Hiroji Ohta, FEPC Chairman, on March 17, 2000

Today, I would like to speak as president of the Chubu Electric Power Company and describe some of the steps Chubu Electric has taken to prepare itself for partial deregulation. I would also like to respond to the question posed at last month's press conference regarding the future of the FEPC.

Next week, deregulation of the special high-voltage market will begin. Although we anticipate heated competition, power companies like our own have strengthened their management, and plan to compete on an open and fair basis by offering products and services that meet specific customer needs.

At Chubu Electric, we will not be fighting a rearguard campaign to keep existing customers. Rather, we accept the challenge of breaking new ground, and will strive our best to 'win' new customers.

In a competitive marketplace, it is more important than ever to consider the needs of investors and shareholders, as well as customers. As a result, Chubu Electric has adopted two major management initiatives.

The first is the establishment of management policies that address the risks associated with a fluctuating revenue base.

With increased competition, the stability of our revenue base will no longer be guaranteed. As such, we need to ensure that profit margins can be maintained in the face of mid- to long-term revenue fluctuations in a variety of business scenarios.

Mid-range management objectives, which have already been announced, include:
1) To achieve sales of some 2.05 trillion yen per annum, and profits of 1.2 billion yen per annum, averaged over the next three years.
2) To reduce interest-bearing bond debt to under 4 trillion yen by the end of 2004.
3) To increase shareholder equity to 20% by the end of 2004.

To achieve these goals, we will expand our service menu, offer consulting and guidance on electricity usage, and strengthen our marketing efforts to better respond to customer needs. In addition to these sales-oriented efforts, we will address the issue of long-term profitably by developing flexible and responsive facilities investment and operating plans.

Our second major management initiative is to strengthen the revenue-generating power of the entire Chubu Electric group. Because deregulation also means that we can now diversify, we plan to expand the areas in which we do business. Also, the introduction of internationalized accounting procedures means that our business performance will be judged on the basis of revenue generated by the entire group.

As a result, we have developed a master plan based on group-wide management, and will be shifting personnel and group resources to areas of business that offer the greatest profit potential. We will also be reviewing the role played by affiliated companies, and have established a Business Strategy Group within the Planning Department to determine the best strategies to pursue.

In the competitive new environment we face, our greatest asset will be the customer trust we have built up over many years of service to the community as a reliable, full-service, electric power provider. We consider this to be one of our most valuable management resources, and plan to strive harder than ever to become a full-service energy company that contributes to the lives and business vitality of the local community.

I would now like to move on to the subject of the FEPC's future.

The advent of deregulation will bring new participants into the field and create rivalries between existing power companies as they compete for customers. In view of these changes, it is essential that the FEPC, which currently is comprised of nine member companies, maintains a high level of transparency and fairness in its activities.

On the other hand, of course, for the 70% of the customer base that is unaffected by deregulation, our responsibility to provide wide-ranging power-supply services remains unchanged. In addition, electric power companies will continue to need to cooperate in addressing issues such as the nation's energy security and nuclear energy development program -- particularly the establishment of a nuclear fuel cycle and the implementation of back-end measures -- as well as global warming and other public issues.

In light of these factors and accepted fair trade practices, we have reviewed the FEPC's activities to clarify its proper structure and function. Our findings are summarized in the reference materials.

Regarding the FEPC's structure and function, it will continue to be comprised of "General Electric Power Providers," and will work to address issues of a broad public nature. We have also decided at this juncture to extend full membership to Okinawa Electric Power Company, which until now has participated in the FEPC as an observer. This brings to 10 the number of General Electric Power Providers who are members.

With regard to our business activities, we have always operated within the framework of the anti-trust law, and having reviewed the situation, find no need to make any significant changes in this area. That said, we will be making some minor adjustments to enhance transparency and improve efficiency. As is shown in the reference materials, we have decided to reduce the number of member meetings from 46 to 19, and will make their proceedings public.

With regard to the FEPC Secretariat, we are not planning any changes at the present time. Not only are its duties not expected to change significantly, we consolidated various departments and reduced personnel by 20% only three years ago.

With the addition of Okinawa Electric Power to our ranks, the FEPC is now a truly national association of General Electric Power Providers with a renewed sense of commitment to address a wide range of public issues. To ensure that society does not find our activities lacking in transparency, we plan to make active use of the internet and other communications media to publicize what we do.

I would also like to take this opportunity to remind you of the existence of the Central Electric Power Council, which was conceived to foster the joint development of electric power resources, power-supply sharing, joint power grid and substation operation, and joint emergency response efforts. The council, which I also chair, is comprised of the nine electric power companies that operate wide-area power grid substation facilities.

Because the council will continue to address issues of wide public concern even after deregulation, it will be held to the same standard of management transparency as the FEPC.

I would also like to note that the Ministry of International Trade and Industry and the Fair Trade Commission, announced new guidelines for the electric power industry last December. The guidelines state that, "...in the interests of even greater transparency and fair competition, new entrants to the power supply industry should be encouraged."

Those of us in who work in the industry believe that it is only natural for new entrants to be welcomed, and we will assist in implementing specific measures to ensure that new entrants and existing electric power companies are treated equitably.