Time flies, and with only two weeks left in the year, I would like to take
this opportunity to thank the members of the Energy Reporters Press Club
for their support and attention during the past year.
For the electric power industry it was a year of great change. In fact,
with partial liberalization in March and other developments, our business
environment probably underwent greater change than at any other time in
history. As this is our final press conference of the year, today I would
like to comment on the events of the past 12 months.
With regard to the domestic economy, consumer confidence is still rather
weak, but facilities investment -- particularly in IT -- seems to be picking
up. So the overall picture is slowly beginning to look a little brighter.
On the other hand, it is also true that we have witnessed the failure of
a number of major retailers and financial institutions, and that many companies
have had to undergo radical restructuring to ensure that they survive into
the next century.
The electric power industry has also been affected by these developments,
and an overview of the year's events is shown in the reference materials.
As I mentioned before, partial liberalization of the retail electric power
market was effected when the Revised Electricity Utilities Industry Law
was ratified on March 21. Although only nine months have passed, the business
environment has already become extremely competitive as new firms have
entered the field, and the Ministry of International Trade and Industry
and various other government agencies have initiated open bidding systems.
However, we have not been idly standing by. Rather than adopting a defensive
posture to ensure that customers do not abandon us, we have accepted the
challenges posed by the changing business environment, and have actively
responded. With the start of liberalization, FEPC member companies revamped
their pricing menus and services to better meet customer needs. Then, in
October, as a result of a program to increase management efficiency at
every level of operations, we reduced rates by an average of 5.42% across
the 10 companies, and further enhanced competitiveness by again revising
price menus and services. In addition, we simultaneously launched a "Green
Electric Power Program" to allow customers and electric power providers
to work together to promote the use of new energy sources.
In anticipation of even more intense competition next year, we will continue
to improve efficiency, and while strictly adhering to new legal guidelines,
will strive through head-to-head competition with new power providers to
be our customers' power supplier of choice. No matter what the competitive
environment may be, however, we pledge to actively seek solutions in areas
of public significance such as energy security and environmental protection.
I would now like to speak briefly about the situation regarding nuclear
power.
As you know, since the JCO accident, national government, local agencies
and electric power providers have worked together to implement a wide range
of strengthened safety and crisis prevention measures. The NSNet (Nuclear
Safety Network) was established, and at the national level, the role of
the Nuclear Safety Commission was strengthened, and the number of safety
inspectors and crisis management personnel was increased.
Amid these developments, the Electric Power Development Coordination Council
approved the Chugoku Electric Power Shimane Nuclear Power Plant No. 3 Unit
in August, and the Hokkaido Electric Power Tomari Power Plant No. 3 Unit
in October. So I think we can say that government and private sector efforts
to prevent any recurrence of such accidents are beginning to bear fruit.
In November, the nation's long-range nuclear plan was revised for the first
time in six years. After wide-ranging discussions with many people, including
those with reservations about the promotion of nuclear power -- and despite
the unfortunate JCO accident -- I was greatly reassured that we were able
to reconfirm the need for nuclear power in the 21st century, with the understanding
that safety is given the highest priority.
This year was also a year in which much progress was made in the area of
reprocessing and the back-end nuclear fuel cycle. In June, the "Final
Disposal of Specified Radioactive Waste Law" was ratified, and in
October, the Nuclear Waste Management Organization of Japan was established
to oversee its implementation. In October we also successfully concluded
a safety agreement regarding the receipt of spent nuclear fuel for reprocessing.
In November, an official determination was made to move ahead with domestic
processing MOX fuel, and Japan Nuclear Fuel Limited was appointed to handle
the business. In addition, on the 18th of this month, Tokyo Electric Power
Company will petition the city of Mutsu for permission to conduct a feasibility
study on the construction of a temporary storage facility there. These
developments bring us significantly closer to our goal of establishing
domestic nuclear fuel cycle operations, and we are very grateful for the
support of the many people who assisted in their realization.
Our plu-thermal energy plans and many other issues still need to be addressed,
but as we enter the 21st century, we will dedicate ourselves to their resolution
for the sake of nuclear power development for the next generation.
In conclusion, I would like to speak about the road ahead for the electric
power industry in the coming century.
As electric power providers, we have always tried to contribute to society's
development and the enrichment of community life by providing a stable
supply of electricity at affordable rates. In the 21st century, electric
power will continue to be a service that is indispensable to society, and
one that has a high degree of public significance. Given its public nature,
I believe that we must do our utmost to move the industry forward in the
coming age.
Although partial liberalization was introduced this past March, I have
repeatedly stated that, "In electric power industry liberalization,
the customer must play the leading role." In the future, I believe
that it will be even more important for us to grasp diversifying customer
needs quickly, and respond by providing appropriate services promptly.
Technological innovation is another area in which expectations are running
high, and I believe increased competition will help speed the pace of new
development. With respect to electric power distribution systems, for example,
there is a growing possibility that conventional large-scale power grids
will be supplemented by various types of smaller, localized power grid
systems -- and this is an area in which the development of new technologies
will play an exceedingly important role.
I personally feel that the 21st century will also be an age in which "electric
power companies" will be evolve into corporate groups that provide
a wide range of services with "total energy service companies"
at their core.
But no matter what form our companies take, the pride we feel in providing
a service that is essential to both industry and people's daily lives --
our "sense of duty to serve the public" if you will -- must remain
at the center of everything we do.