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Current phase of deregulation Phase beginning April 2005 Examination beginning from April 2007
PROFILE 2004
Kyushu ElectricPower Company, Incorporated
To our stakeholders
Reviewing our current operational environment, in April this year, the scope of electric power
deregulation went from including only extra-high voltage customers to including high voltage
customers with contracts of 500kW or higher. This will expand further in April 2005 to include all high
voltage customers, which means about 60 percent of our customers will be subject to electric power
deregulation. In addition, the increase in use of distributed power generation systems is compounding
the ongoing intensification of competition in the electricity market. In reflection of the changing market
environment, the electricity industry is receiving increasingly harsher appraisal of its capital market.
The situation confronting us has led us to undertake reform of our management structures with a
particular focus on strengthening our competitive edge and establishing new profit oriented structures,
while remaining committed to our public service oriented role in the electricity utility business.
In practical terms, this firstly means strengthening the company's cost competitiveness through greater
efficiency in overall management, including reduction of capital expenditure, maintenance costs,
miscellaneous business expenses, and the number of employees. Secondly, to enhance our commercial
appeal, we are assertively promoting our "Total Solution Marketing", which is all about understanding
the diverse needs of our customers and proposing practical solutions.
At the same time, we will continue to accomplish our agenda on issues of our social responsibility such
as providing a stable supply of electricity and protecting our environment. Above all, the promotion and
safe operation of nuclear power
generation is crucial to this agenda. It
is of utmost importance to us to ensure
the current and future safety of our
nuclear facilities, and we are also
committed to undertaking new
developments.
Another agenda is to improve the
profitability of the Kyushu Electric
Power Group by achieving growth in
the areas of new businesses that tap
into our accumulated technology and
expertise.
Furthermore, with a greater emphasis
on compliance management and an
active focus on improving public
disclosure of information, we are more
than ever committed to conducting our
business justly and fairly with a high
degree of transparency.
We are striving to earn the trust of
customers, shareholders and investors
and society in general so that we are
considered as first choice. We
appreciate your continuous support.Michisada KamataChairman
Shingo MatsuoPresident
Contents
Electric Power Deregulation ‥‥‥‥‥‥‥‥‥‥‥‥‥‥‥ 1
Satisfying Our Customers’ Needs ‥‥‥‥‥‥‥‥‥‥‥‥ 2
Our Commitment to a Stable Supply of Electric Power ‥‥‥ 4
Environmentally Friendly Corporate Stance ‥‥‥‥‥‥‥‥ 6
○Implementation of the environment action plan
○Promoting the increased use of new energy
Working with Regional Communities ‥‥‥‥‥‥‥‥‥‥‥ 8
Promoting Technology Development ‥‥‥‥‥‥‥‥‥‥‥ 9
New Businesses ‥‥‥‥‥‥‥‥‥‥‥‥‥‥‥‥‥‥‥ 10
Compliance Management Initiatives ‥‥‥‥‥‥‥‥‥‥‥ 12
◆Company Data ‥‥‥‥‥‥‥‥‥‥‥‥‥‥‥‥‥‥‥ 13
Dual interests of management efficiency and public common good
Pursuit of a management style that can meet the challenges of competition
Electric Power Deregulation
The operational environment that confronts our companyFrom March 2000, the first stage of deregulationoccurred, which involved the sale of electricity tocustomers with contracts for 2,000kW or more(20,000V or more).Then from April 2004, the scope of deregulationexpanded to include customers with contracts for500kW or more (6,000V or more).
● After partial deregulation, customers who were subject to thederegulation such as prefectural offices and universities puttheir power supply out to tender and in a large proportion ofthe cases where competitive bidding ensued, the contract wasawarded to new market competitors.
● Even among the customers still excluded from deregulation,some of those who annually use several tens of thousands ofkilowatts each year are adopting distributed generationsystems.
Future phasing in of electric power deregulationIn April 2005, deregulation will extend to include electricity sales to customers with contracts for 50kW or more. Then April2007, the national government will begin an examination into total nationwide deregulation that would include generalhouseholds.
Dual commitment to management efficiency and public common good
�
Approx. 33% Approx. 24% Approx. 57% of the electric power sold by Kyushu Electric Power
Extra-high voltage power
[Extra-high voltage for industries]Large-scale industrLarge-scale industrial plantsial plants(Industr(Industrial compleial complexes and mes and multi-fulti-facility plants)acility plants)
[Extra-high voltage power for business operations]DeparDepartment storestment stores, hotels, hotels, office boffice building compleuilding complexeses, hospitals and univhospitals and universitiesersities
(2,000kW or more)
High Voltage
[High voltage B (for industries)]Medium sizMedium sized fed factoractoriesies
[High voltage for business operations]SuperSupermarmarketsets, medium to small b, medium to small building compleuilding complexeses
(500kW or more, less than 2,000kW)
Customers with contracts for 50kW or more
High voltage (50kW or more, less than 500kW)
[High voltage A (for industries)]Small fSmall factoractoriesies
[High voltage for business operations]SuperSupermarmarketsets, , medium to small medium to small building compleuilding complexeses
Beginning of examination into total nationwide deregulation
Low voltage/residential (Less than 50kW)
[Low voltage electric power]Small factories (back-street factories)Convenience stores
[Residential electric power]Domestic houses
Customers with contracts for 500kW or more
Current phase of deregulation Phase beginning April 2005 Examination beginning from April 2007
1KYUSHU ELECTRIC POWER CO.,INC.
Now that full-scale competition in the electric power market will become a reality, we must pursue a management style that can meet the challenges of competition. Not only must we further accelerate our efforts to improve management efficiency, we must also fulfill our fundamental commitments such as maintaining a stable supply of electric power and addressing global environmental issues in ways that consider both management efficiency and the public common good.
Our commitment to improving management efficiency
・ Make capital expenditure more efficient・ Cut costs・ Reform office administration with information technology・ Pursue total quality management (TQM)・ Speed up management processes and improve systems
of autonomous management
Our commitment to public common good
・ Secure a long-term stable supply of electric power・ Conserve the environment・ Offer a universal service
(A service that offers a supply of electricity with impartiality to anyone, anywhere inside the regions our company supplies electric power to.)
Our commitment to lower electricity rates
Due to the results of the improvements in our
management efficiency and the recent trends in our
income and expenditure, we have been able to reduce
the electricity rate by an average of 5.46% from the 1st
of January 2005. We will continue to improve our
management efficiency so that we are able to offer
even better prices, quality, and service.
0
6,000
6,500
7,000
7,500
8,000
8,500
9,000
9,500
10,000(Yen)
Meeting the energy requirements of our customers
So that our company continues to be the company of choice for our existing corporate customers, we are deploying our Òtotal
solution marketingÓ to propose solutions that give top priority to Òput the customer first.Ó
Our corporate customers
Response via a customer relations officer
Analysis of
customer's
energy
usage
Kyushu Electric Power
Group businesses
〈Examination of the details of a proposal〉
Can you provide cheaper
electricity rates?
I would like to save on energy
but I don't know how.
I would like to reduce ourburden on the environment.We have been given a proposalfor private power generationbut what are its merits?
Satisfying Our CustomersÕ Needs
2 KYUSHU ELECTRIC POWER CO.,INC.
Our top priority is Òput the customer firstÓ and so not only will we actively seek opportunities to lower
electricity rates, we will also strive to further satisfy the needs of our customers with Òtotal solution
marketing,Ó which uses the entire management resources of the Kyushu Electric Power Group to provide
solutions that make practical use of these resources.
Kyushu Electric Power
●Optimum electricity rate plans● Introduction of thermal storage systemsand battery storage systems
● Introduction of distributed generationsystems and gas sales
●Energy saving diagnosis and ESCObusiness proposals, etc
For our corporate customers
Monthly electricity costs for typical household (trend of our company)
Note: 1. This includes surcharges such as consumption tax.
2. This does not include fuel cost adjustment.
3. The charges for the fiscal years 2002 and 2005 include a processing discount (´50).
Contract category Residential lighting Contract current 30A Monthly usage 300kWh
Compared with 1980, electricity rateshave decreased by 33%
1980�1986�1987�1988�1989�1993�1995�1996�1998�2000� 2005�(Revision year)
8,7198,530
8,205
7,192
2002�
6,524
¥3,081
9,334
7,893 7,785 7,764
7,321
6,775
6,253
For our residential customers
Always at hand to respond to customer inquiries
■ Call CentersWe have now established call centers allowing customers to receive speedy responses to inquiries and applications for services over
the telephone.
■ Internet online customer inquiry serviceAn online customer inquiry service is available for customers who wish to terminate, restart using or adjust the volume of electricity.
[Visit us online at http://www.kyuden.co.jp/]
We offer residential customers the worry-free, economical and comfortable "ALL DENKA*" and other electricity rate plans to suit
the customer's electricity usage.
■ Introducing the worry-free, economical ÒALL DENKAÓ package for comfortable livingAll that customers need to do to switch to the ALL DENKA plan is to do away with the need for flames in the kitchen by switching
to the high power 200V ÒIH Cooking HeaterÓ and change the hot water supply to an electric system that uses cheaper nighttime
electricity. Not only can customers choose "ALL DENKA" and benefit from the peace of mind, convenience and comfort of no
longer needing to use flames, but they can also choose the attractively priced "DENKA de Night" plan and make some worthwhile
savings in their lighting and heating costs.
Kyushu Electric PowerÕs home advisers
■ Visiting your home to explain the IH Cooking Heater andthe ALL DENKA package
■ Experience ALL DENKA equipment first hand
Our companyÕs home advisors visit civic halls and customersÕ homes to explain in simple
terms the ins and outs of our electricity services such as the IH Cooking Heater, ALL
DENKA and how electricity rates differ between packages.
Iris~Kyushu Electric PowerÕs Community Plaza~�Gain first hand experience of the comfort of the electric appliance lifestyle at this
community plaza, which offers cooking classes using the IH Cooking Heater, an exhibition
booth where you can listen to presentations and displays of the ALL DENKA equipment
such as the water heater and Eco Cute. It is also possible to seek advice on which package is
right for you.
■ Calculate the lighting and heating costs of an "ALL DENKA" householdWe offer a free service to help you calculate how much cheaper your lighting and heating costs would be if you switched your home
to the "ALL DENKA" plan. Please enquire at your local Kyushu Electric Power customer service office or visit the Kyushu Electric
Power website, which allows you to calculate your savings online.
[Visit us online at http://www.kyuden.co.jp/]
Cooking class at Iris
Kyushu Electric Power home advisor taking a seminar
Electricwater heater
IH Cooking Heater Electric hot water system
Eco Cute
ALL DENKA household
3KYUSHU ELECTRIC POWER CO.,INC.
Attractively priced package
DENKA de Nightde NightDENKA de Nightde NightDENKA de NightDENKA de Night
Daytime
Familytime
10PM
8AM
10AM
5PM
Nighttime(10 hours)
´6.9300
´6.60Familytime
´20.4750
´19.50
Nighttime isless than onethird ofdaytime rates
Summer (Jul. 1 - Sep. 30)……… ́ 32.6025
Rest of the year (Oct. 1 - Jun. 30)… ́ 27.2475(´31.05)
(´25.95)
* The prices in the parentheses are the pricesbefore consumption tax.
* ALL DENKA : This involves converting all fuel-based appliances such as gas cookers and gas or oil hot water systems to electricity.
55
60
65
70
75
80
85
90
13
14
15
16
17
18
19
20(billion kWh) (million kW)
Our Commitment to a Stable Supply of Electric Power
Vulnerability in Japan’s energy supply structureCurrently Japan imports about 80% of its energy resources. The bigger half of these imports is oil that is chiefly sourced from
the politically unstable Middle East, thus leaving JapanÕs energy supply structure extremely vulnerable in comparison with
other advanced nations.
A balance of electric power developmentcentered around nuclear power
In preparation for future increases in electric power demand,
Kyushu Electric Power is pursuing a balance of electric power
development cenered around nuclear power, which considers
the overall picture, such as the need to establish energy
security, the price and our responsibilities to the environment.
We take particular efforts to seek opportunities to hold
discourse with our contracted customers about nuclear energy
so that we may pursue development with our customersÕ
understanding and cooperation. Our intention is to have a long-
term stable supply of electric power, and to achieve this; an
environmental survey is currently in progress at Sendai Nuclear
Power Station, as part of an investigation into the potential for
expansion.
■ Ideal balance of electric power generation
■ Characteristics of each type of electric power source
Trend in electric power sales and maximum electric power
2000 2001 2002 2003 2013�[Plan]
(Fiscal year)
75.3 75.3 76.6 77.3
85.4 �billion kWh�(1.0%)�
15.3716.36
15.35 15.56
18�18�million kWhmillion kWh�(1.5%)(1.5%)
18�million kWh�(1.5%)
Ele
ctric
po
wer
sal
es
Note: 1. The maximum electric power is the maximum three-day
averages at transmission facilities.
2. The values in brackets ( ) are the average rate of annual
growth from fiscal year 2002 to fiscal year 2013.
Note: 1. The cost of power generation is based on a Report of the Sub-Committee on Costing Study forthe Research Committee on General Resources and Energy (January 2004). The rate of facilityuse was set to 80% for each energy resource (except hydro, which was 45%), the operational lifewas set to 40 years and the rate of reduction was set to 3%.
2. The cost of nuclear power generation includes the related costs such as that of reprocessing,radioactive waste processing and disposal, decommissioning of the reprocessing facilities anddecommissioning of nuclear plants.
Comparative breakdown of electric power by each category of power generation (includes power purchased from others)
New energy
We are pursuing a balance of electric power development centered around nuclear power that can ensure we have a long-term stable supply of electric power.
0
50
100(%)
5%�1%�
20%�
24%�
7%�2%�
41%�
15
20
17
111
0
36
5
16
21
82
1
47
Maximum electric power
4 KYUSHU ELECTRIC POWER CO.,INC.
¥5.3
¥11.9
¥5.7
¥6.2
¥10.7
Nuclear
Hydro
Coal
LNG(Liquid natural gas)
Oil
● The energy density of the fuel is high and it is easy to stockpile energy.
● It is possible to reprocess and reuse it as a resource fuel.
● Better stability in procurement of fuel● No CO2 emissions from power
generation process
● No CO2 emissions from power generation process
● Energy is purely a national product
● Better stability in procurement of fuel(Overseas coal)
● Large amounts of emission of CO2, SOx and NOx
● Low levels of CO2 emission and no SOx emission
● Contracted to take certain volumes based on long-term contracts
● Procurement is easily adjustable in response to short-term fluctuations in demand
● Large amounts of emission of CO2, SOx and NOx
CharacteristicsCost of power
generation(¥/kWh)
(Fiscal year)2013�[Plan]
2003�[Actual figures]
1993�[Actual figures]
Nuclear
General hydro
Geothermal
Pumped storage
Approx. 30%
Approx. 10%
Approx. 10%
Each taking approximately one third of the remaining half
Allocated according to fuel rates and other factors
Approx. 45–50%
Approx. 10%
Percentage of total equipment
Percentage of total electric power
Coal
LNG
Oil
Thermal
Oil etc
LNG
Coal
HydroGeothermal
Nuclear
■ Outline of environmental survey
The next generation of nuclear power is expected to come to fruition midway through the 2010s. The following environmental
survey has been drawn up for the Sendai Nuclear Power Station. Geological surveys within the grounds of the power station began
in October 2003.
On April 28, 2004, Kyushu Electric Power decided on the policy to implement our Plu-Thermal project at generator 3 of the Genkai
Nuclear Power Station by FY 2010. On May 28 of this year we submitted a request for a preliminary agreement from Saga
Prefecture and the Genkai-cho municipality and at the same time, applied to the national government to convert the nuclear reactor
facilities.
Our efforts to gain everyone's understanding in regard to our Plu-Thermal project, which places the utmost priority on maintaining a
safe nuclear power station, will continue in the future.
※1: MOX is a mixed oxide.
※2: Plu-Thermal is a term created from plutonium and thermal reactor (nuclear reactors
currently used in Japan).
Environmental survey at Sendai Nuclear Power Station
Our Plu-Thermal project
Environment assessment : Survey into the atmospheric environment, water environment, marine biology and terrestrial biology etc.
Geological survey : Survey into the tectonics and fault structure etc. of the grounds of the power station and the surrounding
area.
Meteorological survey : Survey into wind directions and wind speeds etc.
Non-fissionable
plutonium etc.
Approx. 3%
Non-fissionable uranium etc.
Approx. 91%
Non-fissionable uranium
Approx. 96%
Fissionable uranium
Approx. 4%
Fissionable plutonium
Approx. 6%
■ Nuclear fuel cycle
■ Difference between uranium fuel and MOX fuel
■ What is Plu-Thermal?Uranium fuel after it has been used for nuclear power generation (spent fuel) contains
plutonium that can be reused as a fuel. This fuel, which is produced by extracting the
plutonium and mixing it with non-fissionable uranium, is called MOX※1 fuel. When
this MOX fuel is used in currently operating nuclear power stations to generate
electric power, the process is called Plu-Thermal※2.
■ The necessity of Plu-Thermal
■ The reliability of Plu-Thermal● Even in the nuclear electric power generation currently used, non-
fissionable uranium is converted to plutonium and part of this plutonium is
burnt as fuel.● Plu-Thermal has been implemented in power stations in other countries for
more than 40 years (approx. 4,000 reactors in 55 plants). Moreover MOX
fuel has already been used safely in nuclear power stations in Japan
(Mihama Power Station, Tsuruga Power Station).
■ Why Genkai 3 was decided for Plu-Thermal implementation
Current fuel for nuclear power
generation
Uranium fuel MOX fuel
Plu-Thermal fuel
5KYUSHU ELECTRIC POWER CO.,INC.
Although it would be possible to implement Plu-Thermal at any plant of the
Genkai or Sendai nuclear power stations, Genkai 3 was chosen for the
implementation policy for the following reasons:● Genkai 3 and 4 are the largest of our nuclear reactors and can utilize the more MOX fuel in a single plant.● The working space that can be secured for Genkai 3 is double that of Genkai 4. In addition to a safer operation, it would
also ensure easier implementation of acceptance and testing of the fuel.
Since Japan imports 80% of its energy resources, it is essential that Japan
utilizes its limited energy resources as effectively as possible in order to
secure a reliable supply of energy for the future. To do this, we must establish
a nuclear fuel cycle and implement Plu-Thermal, which a part of this cycle.
Such implementation will allow Kyushu Electric Power to:● deliver a long-term and reliable supply of electricity to customers.● ensure our company's stock of plutonium, which has been acquired through
reprocessing, is used for the peaceful purpose of electric power generation
to prevent it being used for the development of nuclear weapons.
Since it is important that both these points are achieved, we believe that it is
paramount that we implement Plu-Thermal.
Natural uranium
Recovered uranium
Enriched uranium
MOX fuel Uranium fuel
Radioactive waste (low level)
Radioactive waste(high level)
Reprocessing plant
Spent fuel intermediate storage facility
(Storage center for recycled fuel)
Nuclear power station
High level radioactive waste processing plant
Low level radioactive waste processing plant
MOX fuel processing
plantEnrichment
plant
Uranium fuel processing
plant
Spent fuel (recycled fuel)
Spent fuel (recycled fuel)
Spent fuel (recycled fuel)
Recycli
ng of
plutonium
Flow of uranium fuel
Legend
Flow of recycled fuel
Environmentally Friendly Corporate Stance
Promotion of environment managementWe have established an environment management system in all company locations that can achieve continual environmental
improvements through planning, implementing, evaluating and revising autonomous environmental practices.
Measures for global environmental issuesWe are striving to reduce CO2 emissions through achieving an “optimum mix of power sources,” which is the pursuit of an
optimal balance of nuclear-based energy resource development and developing and adopting renewable energies.
We are also actively endeavoring to proliferate the use of highly efficient equipment and thermal storage systems, harness unused
energy and pursue energy saving activities.
Promoting a recycling-based societyWe are working to decrease the amount of waste generated in our operational
activities and pursuing re-use or recycling of this waste.
We are also striving to attain “zero emission,” where the final disposal of
waste is reduced to as close to zero as possible. Our concrete target is to
recycle 90% or more of our industrial waste and 100% of our paper waste.
We are also pursuing “green procurement,” choosing environmentally
friendly commodities.
Harmoniously coexisting with the local environmentWhen we design our power generation facilities etc., we strive to ensure that
they only have a minimal impact on the environment by taking advantage of
the latest knowledge and technology and designing them to suit the regional
conditions. Once our facilities are up and running, we pay thorough attention
to the everyday management of the environment.
Working with societyWe are committed to actively spreading the word about the environment such
as through our "Eco Mother" initiative, which serves to provide greater
connections between our company and customers while encouraging dialog
on environmental issues and expanding environmental awareness.
Since 2001 we have been conducting the "Kyushu Homeland Forestation Program", a tree planting campaign that has the aim of
planting 1 million trees in the space of 10 years. We are also involved in the
"Car-Sharing Project", a collaborative venture with Fukuoka City and
environmental NGOs, which involves the use of low emission vehicles.
※This communal car sharing system works by individuals forgoing ownership of a car and
becoming a member of the organization that assumes the management and operational
responsibilities for the cars. It is expected to effectively lower car gas emissions and alleviate
traffic congestion.
■ Major sites targeted for the Kyushu Homeland Forestation ProgramPlanting of 100,000 trees
in Koga City
Forestation surrounding Aburaki Dam
Tree planting in Higashiyoka mud flat
Forestation of Kawaura-cho
Green project in Tano-cho
Greening project in Fukiage Beach
Each year we settle upon an "Environment Action Plan", as an entire group we strive to accomplish the plan's goals. Furthermore, each year we report on what has been accomplished in the "Environment Action Report".
=Implementation of the environment action plan=�
Forestation volunteers in Unzen/Fugen
Forestation of Onagohata
Helping cultivate “Green Helper”�As part of our commitment to the global environmental issues, since 1998 we have supported ÒGreen HelperÓ volunteer leaders to
promote more greenery in the environment .● 550 people participated in the training program during 1998 and 2003. (Hosted by: Building Green Towns Exchange (NPO) in
Kumamoto City.
Ranked in first position in the "Electric power, gas" category for businesses in the "Nihon Keizai Shimbun Seventh Environmental Management Survey"In a survey conducted on September 9, 2003 that evaluated and ranked companies' efforts and commitments to environmental corporate management, Kyushu Electric Power was ranked first out of 17 companies in the "electric power, gas" category.
6 KYUSHU ELECTRIC POWER CO.,INC.
Products made from recycled paper
Promoting new energyIn regard to our efforts so far, not only have we been
developing photovoltanic and wind power generation,
we have been taking the initiative to implement
support activities such as purchasing surplus electric
power and cooperating with the Kyushu Green
Electric Power Fund.
We will continue these efforts into the future and in
order to fulfill our obligations under the RPS
System*, we will strive to promote the take-up of new
energy.
We are promoting the increased use of new energy through measures such as purchasing surplus electric power from photovoltanic and wind power generators and installing photovoltanic and wind power generators as part of the generating facilities of our own company.
=Promoting the increased use of new energy=�
* Renewables Portfolio Standard (RPS System)New obligations were placed on electric utility providers to utilize no less than the set minimum of new energy when the RPS system took effect on April 1, 2003.This system is based on the RPS Law (a law on special measures regarding the utilization of new energy by electric utility providers), which was announced officially in June 2002, and places obligation on electric utility providers to utilize no less than the set minimum portion of the total annual electric power sales that must be generated from new energies※1. This system has been put in place to promote the increased use of new energy.�
※1. The energy sources classified as new energies are: photovoltanic, wind, geothermal (geothermal must be a power generation system that does not significantly deplete resources of geothermal hot water: e.g. geothermal binary cycle power generation), hydro (hydro must be a water conduit system that produces 1,000kW or less) and biomass (organic matter that originates from animals and plants that can be utilized as an energy resource).
※2. Geothermal binary cycle power generation is a power generating system in which liquid with a low boiling point is heated and vaporized and this vapor drives a turbine. By using a medium with a low boiling point, low temperature vapor and heated water that cannot be utilized as the medium's heating source in conventional geothermal systems can be used in this system. We have built the Hatchobaru Binary Cycle Power Plant (Geothermal Binary Cycle: 2,000kW), which uses a low temperature geothermal heating source, as part of the facilities of the Hatchobaru Power Station (Kokonoe-machi, Kusu-gun, Oita Prefecture). Since February 2004, we have been conducting confirmation tests at this plant.
7KYUSHU ELECTRIC POWER CO.,INC.
■ Amounts of new energy electric power purchased from customers (As of the end of the fiscal year 2003)
Number of customers Electric power (kW)
32,353 130,575Photovoltanic
32 104,342Wind
State of our company’s photovoltanic and wind power generation facilities (As of the end of the fiscal year 2003)
Photovoltanic power generation
325kW [21] 3,250kW [2]
Wind power generation
Note: [ ] indicates the number of sites installed.
Advantages
Disadvantages
Facility capacity
● The energy resource is inexhaustible.
● No CO2 emissions from the electric power generation process.
● The system can be freely designed to suit purpose and geographical terrain.
● Little noise is made during the electric power generation.
● The energy resource is inexhaustible.
● No CO2 emissions from the electric power generation process.
● The amount of power generated by one generator unit is small and a large surface area is required to generate a large amount of electric power.
● Cloudy and rainy days significantly lower generation capacity and no generation is possible at night.
● It is an expensive way of generating electric power.
● The amount of power generated by one generator unit is small and a large surface area is required to generate a large amount of electric power.
● Generation is not possible if there is no wind or if the wind is too strong.
● The wind turbine generates a loud noise when the blades rotate.
● It is an expensive way of generating electric power.
Research and development of fuel cellsIn regard to polymer electrolyte fuel cell technology, which has attracted much attention for automobile and general household use,
our company is currently carrying out demonstrative research on manufacturer prototypes in order to ascertain their reliability and
gain technological knowledge.
Noma wind park power station
Photovoltanic power generator on roof of our Kumamoto Branch
�
8 KYUSHU ELECTRIC POWER CO.,INC.
Working with Regional Communities
Spreading the news and listening to feedback
Community service and regional promotionAs a company that has a strong affiliation to the region and which is integral to people's everyday life, we are always looking for
opportunities to contribute to the enrichment of the local communities so that we may express our gratitude for the daily
patronage by our customers and pay respect to the symbiotic relationship between us and the community.
〈Regional development initiatives〉�
Samples of our pamphlets and periodicals
● "Fureai Concert" Concert for parents and children by the Kyushu Symphony Orchestra (held in 8 locations per year)
● "Bunka no Mori Concert" Concert of standard classical music by the Kyushu Symphony Orchestra (held in 8 locations per year)
Music
● Event assistance such as co-sponsoring cultural events including local music, fine art and photography exhibitions
Event assistance
● Instigation of a training system for young artists of traditional crafts to travel to other parts of Japan or overseas to receive training
● Instigation of support programs for traditional crafts
Traditional crafts
● "Ochanoma Ronbun" Essay competitionLiterary arts
● Participation in local festivals by many of our offices and plants etc.
Participation in local festivals
● Hosting and cooperation of sport events hosted at company facilitiesSports
�
The Kyushu Electric Power Fureai Concert
Oita Branch's institution visit (Flower planting and weeding)
We use a range of mass media and our website to not only ensure that our public information reaches the broadest possible audience, but also to give the community a chance to voice its concerns. We also work hard to fulfill our responsibilities as a member of society by involving ourselves in various activities that serve the community or promote the region.
〈Major community activities〉�
As part of our efforts to implement our ALL DENKA and nuclear power generation strategies, we are publicizing company
information through media releases and mass media advertising to ensure our customers are well informed. We are also
interested in our customers' opinions and are eager to answer any questions. For this purpose, we have a "feedback box" at our
website which customers can use to write their opinions or ask questions.�〈Major publicity and feedback activities〉�
● Regular news conferences held by the president (each month except in
August), press releases (as required)● Television and radio commercials, newspaper advertisements● Various organized meetings, publishing of pamphlets and periodicals● Nuclear power station tours● Internet website (http://www.kyuden.co.jp/)● Staff from our company listens to your opinions and needs.
�
Using our companyÕs network, which has coverage of all of Kyushu, we are making positive efforts to invigorate the
economy of regional areas in Kyushu by promoting local industry, attracting companies to set up in the area and cooperating
in improving the infrastructure.
�
● Provision of a service that provides an inspection of electrical wiring for houses of independent elderly and important cultural assets
● Volunteer work such as paying visits to residents of welfare institutions, and taking part in beautification campaigns
Thanks campaign
9KYUSHU ELECTRIC POWER CO.,INC.
Promoting Technology Development
Development of technologies for cost reduction�We are engaged in the development of various technologies to reduce running costs such
as developing new types of low-cost equipment and systems, and developing technology
to analyze deterioration and estimate remaining operating lifespan to ensure the existing
facilities are effectively utilized.● Research on new types of lightning arrester● Research on anticorrosion technologies suitable for steel towers etc.
(Establishment of maintenance regimes that provide the optimum prevention against
corrosion for transmission towers)● Research on ways of preserving units that are out of service for long periods
(Establishment of low-cost preservation technologies) etc.
Development of technologies for improved profitability of Kyushu Electric Power Group �
We are engaged in tapping into the research resources of the entire Kyushu Electric Power
Group to develop new products and new technologies that promise increased profit and
increased growth.● Development of high-capacity lithium batteries (Electric power storage systems and
uninterruptible power supply systems)● Research on anticorrosion technologies such as expanding the application of ceramic
spray coating etc.
Development of technologies for a stable supply of electric power and environmental preservation�
We are engaged in developing technologies for superior operation and maintenance of
facilities to maintain the quality of electric power, and for environmental preservation such
as effective utilization of industrial waste and global warming prevention.● Research on the output characteristics and systematic influences of wind power
generation● Research on the recycling of industrial waste● Research on biological CO2 fixation etc.
Development of new technologies for the future�We are engaged in the development of technologies that could lead to future technological
innovation.● Research into high-temperature superconducting coil for superconducting magnetic
energy storage system (SMES)● Research on effective utilization of natural energy (demonstration test of binary cycle
power plant at Hachobaru)● Demonstration test on high speed power line communication system (high speed PLC)
etc.
In addition to developing technologies that will make our company more competitive, we are also promoting the development of technologies that will contribute to public interests such as a stable supply of electric power and environmental preservation.
Newly developed type of lightning arrester
Construction works at k-hat reef (algal reef)(Saikaiosaki, Nagasaki Prefecture )
Superconducting magnetic energy storage system (SMES)
Coating work on loading arm and part of base riser
�
Overseas projectsWe are utilizing the strengths of our people and technologies to develop various projects overseas such as IPP operations※ and
electric power consultancy services.
※IPP (independent power producer) operations are businesses that generate electric power independently. The business builds and operates electric power generator
facilities at their own expense and sells electric power to electric power companies.
Project locations
■ Thermal power projects (IPP projects)
Tuxpan No. 2 and 5 IPP projectsMexico: Veracruz (state)
Technical consultancy for substation constructionThailand and Taiwan
Phu My 3 IPP projectVietnam: Ba Ria-Vung Tau Prov.
Ilijan IPP projectPhilippines: Batangas City
Project Name
Mexico: Tuxpan No. 2, IPP project
Philippines: Ilijan, IPP project
Vietnam: Phu My 3, IPP project
495
1,200
717
February 2000
March 1999
December 2001
December 2001
June 2002
March 2004
Joint venture companies Type of generation (fuel) Output (MW) Commenced construction Commenced operations
Mitsubishi Corp.Natural gas
fired combined cycle system
Korea Electric Power Corp., Mitsubishi Corp.,Mirant Corp. (Hong Kong)BP plc. (Britain), SembCorp Utilities Pte Ltd. (Singapore),Sojitz Corp.
Mexico: Tuxpan No. 5, IPP project 495 July 2004Scheduled completion isSeptember 2006Mitsubishi Corp.
Total energy solutionsWe are endeavoring to offer customers with total energy solutions that could include gas and LNG sales,
distributed generation systems, or overseas IPP (independent power producer) operations to complement our
existing electric power provision.
Sales of gas and LNG�These new businesses utilize the LNG plant holdings of Kyushu Electric
Power Group and sell gas and LNG to gas companies and large industrial
customers.
● Kitakyushu LNG Co., Inc., Oita LNG Co., Inc. and Kitakyushu LNG
Sales and Lorry Transport Corp.
Distributed generation�We are working to expand our service to provide distributed generation solutions based on co-generation to customers who
need to reduce electricity costs. Through this service we are able to integrate the entire process from consulting through to
installation, maintenance, monitoring and fuel supply.
● Nishinippon Environmental Energy Co., Inc.
New energy generationWe are developing electric power generation businesses that utilize biomass and wind power.
● Nishinippon Environmental Energy Co., Inc., Nishinippon Plant Engineering and Construction Co., Ltd., and Kyudenko Co., Inc.
New Businesses
We aim to make full use of our facilities, technologies and expertise that we have gained from our background in the electric utility industry to vigorously grow new businesses in such fields as “total energy solutions”, “IT and telecommunications”, “environment and recycling” and “consumer and community services” and further strengthen the profitability of the Kyushu Electric Power Group.
Kitakyushu LNG’s LNG plant
10 KYUSHU ELECTRIC POWER CO.,INC.
IT and Telecommunications
Environment and recycling
Consumer and Community Services
J Re-Light Co., Ltd.
Kyushu Good Life’s “Nice Day Fukuma”
We are engaged in environmental businesses such as industrial waste recycling.
We are engaged in a range of businesses aimed at upholding a rich and comfortable lifestyle for customers.
IT and telecommunications is our second highest source of revenue after our energy operations and we are
continuing to pursue growth in this sector.
Waste-fired power generation Waste-fired power generation projects using industrial waste etc. so that we can
effectively utilize energy by thermal recycling● Fukuoka Clean Energy Corporation● Kitakyushu Eco-Energy Co., Ltd.
Fluorescent bulb recyclingFluorescent bulb recycling services that aim toward a recycling-oriented society● J Re-Lights Co., Ltd.
Confidential document recyclingServices for collecting, shredding and recycling confidential documents● Kyushu Environmental Management Co., Ltd.
Senior citizens apartment (with nursing care)Senior citizen apartments with nursing care to support a comfortable and worry-
free lifestyle for senior citizens living in apartments.● Kyuden Good Life Corporation● Kyuden Good Life Kumamoto Corporation● Kyuden Good Life Kagoshima Corporation
Housing assessmentsHousing assessment service to help customers secure or build reliable and
worry-free homes● Kyushu Housing Guarantee Inc.
Personnel serviceServices for dispatching or introducing staff to meet the needs of the business
community● Kyuden Business Front Co., Ltd.
BBIQ is the name of our broadband Internet connection service
Kyushu Denwa is the name of our fixed-line telephone service
�
11KYUSHU ELECTRIC POWER CO.,INC.
TelecommunicationsBBIQ, our fiber-optic broadband Internet connection service, Kyushu Denwa, our fixed-
line telephone service and Korea Japan Cable Network (KJCN), our international leased-
line service● Kyushu Telecommunication Network Co., Inc.
IT solutionsBroad range of IT services, from planning and proposing IT and telecommunications
systems through to designing, building and implementing such systems● Kyuden Infocom Company, Inc., Kyuden Business Solutions Co., Inc., and Nishimu
Electronic Industry Co., Ltd.�Fiber-optic cable leasing operations
Leasing service of fiber-optic cable for local government agencies, telecommunication
carriers and cable television companies● Kyushu Electric Power Co., Inc.
Compliance Management Initiatives
[Actual measures taken]
In order to further strengthen the relationship of trust we have with society, we are committed to further improve our business conduct so that it is not merely observant of the law but also fair, highly transparent and in accordance with corporate ethics.
・Incidents of corporate misconduct in other companies are on the rise・Competition in the electric power market has intensified
We are raising the standard of compliance management.
However
Having established ÒKyushu Electric Power Charter of Corporate Conduct,Ó we have traditionally focused our efforts on
compliance management with the objective to be a Òcompany that earns trust and recognition from society.Ó
12 KYUSHU ELECTRIC POWER CO.,INC.
● Establishment of a compliance committee (October 2002)
(Members include people with the relevant knowledge who hold employment outside our company.)
1. Respect of fundamental human rights
2. Observance of laws and ordinances and corporate ethics
3. Respect for environmental conservation and rules of international society
4. Provide excellent products and services and ensure that they are safe
5. Further advance the public disclosure of information
● Establishment of a “Compliance Conduct Policy” (December 2002)
● Establishment of a point of contact for compliance related inquiries (February 2003)
● Allocation of one month per year for compliance promotion (Every January)
13KYUSHU ELECTRIC POWER CO.,INC.
Company Data
14 KYUSHU ELECTRIC POWER CO.,INC.
■Date of establishment
■Capital
■Number of shareholders
■Service area
■Annual sales
■Total assets
■Number of Employees
■Supply facilities
Hydroelectric power stations
Thermal power stations
Geothermal power stations
Internal combustion power stations (including waste heat, gas turbine)
Nuclear power stations
Other
Our company’s power stations
May 1, 1951
´237.3 billion
199,916
Fukuoka Prefecture, Saga Prefecture, Nagasaki Prefecture, Oita Prefecture,
Kumamoto Prefecture, Miyazaki Prefecture, Kagoshima Prefecture
´1,318.3 billion
´3,859.0 billion
13,660
2,371,000kW
11,651,000kW
208,000kW
5,258,000kW
3,000kW
19,889,000kW
138 facilities
11 facilities
5 facilities
2 facilities
2 facilities
197 facilities
Other companies’ power stations
Total supply capacity
Substations
Total transmission line length
Total distribution line length
3,141,000kW
23,030,000kW
66,350,000kVA
46 facilities
243 facilities
565 facilities
9,668km
130,400km
Residential electric power
Commercial and industrial electric power
Total
Residential electric power
Commercial and industrial electric power
Total
7.16 million
1.08 million
8.24 million
Number of customers
26.3 billion kWh
51.0 billion kWh
77.3 billion kWh
Electric power sales (FY 2003)
39 facilities 399,000kW
Company Overview (As of the end of March 2004)
Board of Directors (As of the end of July 2004)
Chairman
President
Executive Vice Presidents
Managing Directors
Michisada Kamata
Shingo Matsuo
Hidemi Ashizuka
Hiroaki Okui
Shigehiko Matsumoto
Mitsuaki Sato
Kowashi Imamura
Kiyohiko Matsushita
Kouichi Hashida
Yukio Tanaka
Taku Ishii
Takahiro Higuchi
Kyouichi Hiratsuka
Morimasa Takeda
Tokihisa Ichinose
Tomokazu Odahara
Director
Senior Corporate Auditor
Corporate Auditors
Honorary Advisors
Advisor
Keiji Mizuguchi
Noriyuki Ueda
Hajime Sankoda
Toru Soufukuwaki
Kiyoko Nishimura
Kimiya Nakazato
Zengo Ishimura
Tatsuo Kawai
Shigeru Ohno
Takeshi Koga
15KYUSHU ELECTRIC POWER CO.,INC.
Nuclear Power Operation Dept.
Consignment Service Center
Nuclear Power Stations
Thermal Power Stations
Geothermal Power Stations
Transmission and SubstationConstruction Office
Power PlantsConstruction Office
Branch Offices
Customer Service Offices
Power System Maintenance Offices
Tokyo Branch Office
Survey Office
Central Dispatch Command Center
Fukuoka Call Center
Office Support Center
Telecommunications Center
Education and Training Center
Purchasing andMaterials Center
Bioresource Research Center
Nuclear Power Projects Dept.
Thermal Power Dept.
Power System Engineering Dept.
Power System Operation Dept.
Marketing Dept.
Energy Solutions Dept.
Distribution Dept.
Business Development Dept.
Overseas Business Dept.
Information and Communications Business Dept.
Information Systems Dept.
Telecommunications Dept.
Corporate Auditors’ Office
Board of CorporateAuditors
Organization (As of July 2004)
General Meetingof Stockholders
Board of Directors
Transmission and System Operation Division
Thermal Power Generation Division
Business Development Division
Plant Siting and Environmental Affairs Headquarters
Customer Services Division
Chairman
President
ExecutiveVice Presidents
Managing Directors
Directors
Board of Managing Directors
Corporate Planning Office
Management Administration Office
Secretary Sec.
Public Relations Dept.
General Affairs Dept.
Human Resources Dept.
Accounting and Finance Dept.
Materials and Fuels Dept.
Civil Engineering Dept.
Research Laboratory
Power Plant Siting Affairs Dept.
Facilities Siting Dept.
Environmental Affairs Dept.
Nuclear Power Generation Division
Information andCommunicationsDivision
Corporate Auditors
0
20
40
60
80
100
120
140
160
180
200(Billions of yen)
0
0.5
1.0
1.5
2.0
2.5
3.0(Trillions of yen)
Objective for electricity rates
Our rates must be able to stand up to
those offered by other electric power
companies, distributed generation
companies and new competitors.
Financial objectives
・ ROA (return on assets) = net operating profit after tax divided by average total assets
・ ROE (return on equity) = net income divided by average shareholdersÕ equity�・ Free cash flow: the cash that can be used freely and is calculated by subtracting the capital expenditure (outlay for the acquisition of fixed assets) necessary
to maintain the current business activities from the cash flow generated from business activities (operating cash flow).
Management Objectives
Because of the intensification of competition with other power companies and new competitors, we are accelerating our efforts to streamline our operations by meeting our objectives stated in our mid term management plan.
Trend of balance of interest-bearing debt outstanding
Trend of free cash flow
2001 2002 2003 2006(Fiscal year)
2001 2002 2003 2002-2006(Fiscal year)
2001 2002 2003 2002-2006(Fiscal year)
2001 2002 2003 2002-2006(Fiscal year)
2.492.33
2.18
180.2162.2
Note: The reduction in borrowings is based on the cumulative reduction
from fiscal year 2002 to fiscal year 2006.Note: Targeted figures: ROA and ROE are averages for fiscal years 2002Ð2006;
shareholdersÕ equity ratio is as of end of the fiscal year 2006.
Trend of ordinary income
0
20
40
60
80
100
120(Billions of yen)
Trend of shareholders’ equity ratio, return on asset (ROA), return on equity (ROE)
0
5
10
15
20
25
30(%)� (%)�
0
5
10
15 TargetTarget
-¥450 billion25%�
8.0%�
3.0%�
¥120 billion
Target
102.290.7
107.9
¥100 billion
Target
ROE
ROA
19.6
8.4
3.1
20.3
7.9
2.8
22.3
8.5
3.1
16 KYUSHU ELECTRIC POWER CO.,INC.
69.6
Shareholders’ equity ratio
Decrease in outstanding borrowings (interest-bearing debts)
FCF (free cash flow)
Ordinary income
ROA (return on assets)
ROE (return on equity)
25% by end of fiscal year 2006
Management objectives (fiscal years 2002-2006)
Accumulative total of ¥450 billion
Average ¥120 billion
Average ¥100 billion
Average 3%
Average 8%
Shareholders’ equity ratio
Shareholders’ equity ratio (left vertical axis)
ROE (right vertical axis)
ROA (right vertical axis)
ApproApprox.x. ¥2 tr2 trillionillionApprox. ¥2 trillion
We aim to reduce miscellaneous operating expenses such as
expenditure for outsourced tasks, hire charges and
consumables and thoroughly streamline operations to a new
level of simplicity and efficiency across all areas of business.
Despite facing an increased number of issues concerning
facility maintenance due to, for example, the expansion of
electrical power facilities and the advanced age of some
facilities, we will control maintenance costs by adopting risk
management techniques etc.
Maintenance costs� Annual average of ¥160 billion or less
(fiscal years 2003-2006)
Capital expenditure� Annual average of ¥220 billion or less
(fiscal years 2003-2006)
■ Trend of thermal efficiency※
■ Nuclear power plant capacity factor trend※�
1995 2001 2002 2003 2003-2006(annual average)�
(Fiscal year)
1994 2001 2002 2003 2003-2006(annual average)�
(Fiscal year)
1993 2001 2002 2003 2003-2006(annual average)�
(Fiscal year)1997 2001 2002 2003 2006�
(Fiscal year)
Higher nuclear power ratio and more efficient thermal power
The cost of fuel for nuclear power stations is considerably
cheaper than that for thermal power stations and we aim to
maintain a nuclear power ratio of approximately 80%.
We aim to improve the thermal efficiency of high efficiency
thermal power stations by maintaining a high operation
ratio.
2001 2002 2003 2004 (Fiscal year)�[Plan]
2004 (Fiscal year)�[Plan]
※ Percentage of thermal energy obtained from fuel combustion converted to electricity.
※ Peak since 1988
※�
※ Percentage of the total operation time (8760 hours) per year duringwhich the nuclear reactors were in full operation.
Improving Management Efficiency (Strategies and Outcomes)
Personnel� About 12,500 personnel by the end of FY 2006
The total number of our staff will decrease through
centralizing business operations and revolutionizing
operations through the use of information technology.
79.7
88.984.4
39.0
39.2
0
100
200
300
400
500
600(Billions of yen)
0
150
180
210(Billions of yen)
0
140
160
180
(Billions of yen)
60
70
80
90
100(%)�
0
10,000
11,000
12,000
13,000
14,000
15,000(People)
38.0
38.5
39.0
39.5
40.0(%)�
Historical high
Historical high
Historical highHistorical
high
178.3
203.5
535.7
297.9
108.5
118.5
70.9 68.7 61.0
74.3
71.697.7
75.2241.6
206.9
14,60914,191 13,964
13,660
177.9
158.8153.2
161.7158.4 160.4
Target
¥150 billion
Target
¥160 billionor less
¥220 billionor less
A staff of 12,500
Target
Target
2001 2002 2003
Power source Distribution Other
17KYUSHU ELECTRIC POWER CO.,INC.
In order to restrain the capital expenditure required for the
construction, expansion or replacement of facilities, the
planning criteria and replacement criteria for facilities are
being reviewed and the costs related to planning and
construction are being reduced.
Miscellaneous operating expenses� Annual average of approximately ¥150 billion
(fiscal years 2003–2006)
38.8
39.3
85.9
Features of financial statement for FY 2003【Decreased revenues and increased profit】�
【Electric Power Sales】�
The impact of us lowering the price of electricity rates as of October 2002 led to a decrease in revenue throughout the full financial
year. However our profit increased mainly due to major changes in overall management to improve efficiency and an increase in
nuclear generated power, which lowered fuel costs and reduced depreciation costs.
Breakdown of major expenses�(1) Personnel expenses : Increased by ´10.6 billion mainly due to an increase in contributions to retirement funds (pension costs).
(2) Fuel expenses : Decreased by ´11.4 billion mainly due to a decrease in fuel costs for steam turbine power from an
increase in nuclear generated power.
(3) Maintenance expenses : Decreased by ´5.6 billion mainly due to a decrease in the cost of maintenance inspections of steam
turbine power stations.
(4) Depreciation expenses : Decreased by ´15.7 billion. One reason for this is that depreciation schedules on some existing facilities
are well advanced.
(5) Electric power purchases : Decreased by ´8.7 billion mainly due to a decrease in thermal power received from other companies.
(6) Interest expenses : There was a decrease in interest payments mainly due to lower interest rates but because of debt
assumption for corporate bonds that were executed to reduce the burden of payments of principal and
interest in future years, the overall expenses for interest payment was about the same.
(7) Other : Decreased by ´27.1 billion mainly due to a reduction in spent nuclear fuel reprocessing costs.
The total amount of electric power sold in the fiscal year 2003 was 77.26 billion kWh, a rise of 0.8% compared with the previous fiscal year.
[General Demand] (large industrial power subtracted from total power sold)
Compared with the previous year, summer was cooler and winter
was warmer and this resulted in decreased demand for heating
and cooling. However, there was a growth in commercial power
from the establishment of new stores etc. Overall there was an
increase of 0.7% compared with the previous year.
(Demand has increased for 23 consecutive years since 1981.)
[Large industrial power demand]The 1.3% increase in power sales to large-scale industry was
mainly due to an increase in electrical machinery from an overall
average production increase and conversion from generating
private electric power to buying power in some plants.
(Demand has increased for 2 consecutive years since 2002.)
Trend of electric power sales
80
(Billions of kWh)
70
60
50
40
30
20
10
1999 2000
19.8
53.3
2001
54.7
2020.6
55.3
20.3 20.6
56.7
73.1 75.375.3 76.6 77.3
56.3
2002 20030
Large industry General
Financial Statement for the Fiscal Year 2003
【Non-consolidated Statement】�
■ Comparative Table of Revenues and Expenses
Residential and commercial/industrial
electric power
FY’03�(A)�
FY’02�(B)�
Change�(A-B)�
Change�(A/B)�
Personnel
Fuel
Depreciation
Purchased power
Interest exp.
Other
Total
201.5�
126.5�
153.2�
232.1�
95.9�
73.5�
330.5�
1,213.4
190.9�
137.9�
158.8�
247.8�
104.6�
73.6�
357.7�
1,271.6
10.6�
▲11.4�
▲ 5.6�
▲15.7�
▲ 8.7�
-�
▲27.1�
▲58.1
105.6�
91.7�
96.5�
93.7�
91.6�
99.9�
92.4�
95.4
107.9�
2�
-�
-�
54.5�
▲18.7�
70.1�
�
90.7�
-�
23.1�
15.4�
49.5�
▲13.5�
62.5
17.1�
2�
▲23.1�
▲15.4�
5�
▲ 5.2�
7.5
118.9�
-�
-�
-�
110.2�
138.4�
112.1
Other
(Sales)
Total
1,275.7 1,310.4 ▲34.7 97.3
45.6 51.9 ▲ 6.2 88.0
(1,318.3) (1,358.6) (▲40.2) (97.0)
1,321.4 1,362.4 ▲41 97.0
Ordinary income�
Drought reserve�
Extraordinary gain
Extraordinary loss�
�
�
Net income
Note: Values smaller than 100million yen have been truncated.
(Billions ofyen, %)
18 KYUSHU ELECTRIC POWER CO.,INC.
(Fiscal year)
Ord
inar
y re
venu
esO
rdin
ary
expe
nses Maintenance
Corporate taxes and residential taxes
Adjustment cost for corporate taxes etc.
Financial Statement for the Fiscal Year 2003
19KYUSHU ELECTRIC POWER CO.,INC.
【Comparative Table of Income and Expenses (Consolidated)】�
【Consolidation breakdown】�
【Business Performance and Financial Trends (Kyushu Electric Power Co., Inc.)】�
- -▲6.12
[Oct 2000]▲5.21
[Oct 2002]
73.1(1.4)
1,393.6(0.3)
68.2
22.9
48.47
3,959.2
2,602.6
129.8
17.1
2.8
3.6
75.3(3.0)
1,411.4(1.3)
111.9
60.1
126.83
4,006.2
2,528.9
109.3
19.1
3.3
8.3
75.3(0.1)
1,384.5(▲1.9)
102.2
65.1
137.40
3,984.7
2,488.7
69.6
19.6
3.1
8.4
76.6(1.7)
1,358.6(▲1.9)
90.7
62.5
131.64
3,929.9
2,332.1
180.2
20.3
2.8
7.9
77.3(0.8)
1,318.3(▲3.0)
107.9
70.1
147.65
3,859.0
2,183.3
162.2
22.3
3.1
8.5
-
FY 2003FY 1999 FY 2000 FY 2001 FY 2002
(As of the end of March 2003)
Note: Values smaller than 100 million yen have been truncated.
Ordinary Revenues(Sales)
FY’03�(A)�
FY’02�(B)�
Change�(A-B)�
Change�(A/B)�
Ordinary expenses
Ordinary income
Net income
1,398.5
1,284 1,337.8 96.0
[1,391.6]�1,426
[1,421.3]�▲27.5[▲29.6]�
98.1[97.9]�
▲53.7
114.4 88.1 129.826.2
72.7 64.3 113.28.4
Consolidated subsidiaries (19 companies)
Companies included in consolidated accounts (43 companies)Kyushu Telecommunication Network Co., Inc.Kyuden International CorporationOita LNG Co., Inc.Nishinippon Environmental Energy Co., Inc.Kitakyushu LNG Co., Inc.Capital Kyuden CorporationKyushu Rinsan Co., Ltd.Kyuden Infocom Company, Inc.Denki Bldg. Co., Ltd.Nishimu Electronics Industry Co., Ltd.
Tobata Co-operative Thermal Power Company, Inc.Kyudenko Co., Inc.Oita Co-operative Thermal Power Company, Inc.Kyuhen Co., Inc.
Kyushu Koatsu Concrete Industries Co., Ltd.Seishin CorporationKyuken CorporationNishigi Engineering Co., Inc. Plus 16 other companies
Kyuki CorporationNishi Nippon Airlines Co., Ltd.Nishinippon Plant Engineering and Construction Co., Ltd.Kyuden Sangyo Co., IncKyuden Information Services Co., Inc. West Japan Engineering Consultants, Inc.Shinrintoshi Co., Ltd.Kyushu Meter & Relay Engineering CorporationKoyo Denki Kogyo Co., Ltd.
Equity-method affiliates
(24 companies)
(Billions of yen, %)
Rate of decrease of electricity rates (%)[Implementation date]
Electric power sales and rate of increase (billion kWh, %)
Sales and rate of increase (billions of yen, %)
Ordinary income (billions of yen)
Net income (billions of yen)
Net income per share (yen)
Total assets (billions of yen)
Interest-bearing debts outstanding(billions of yen)
Free cash flow (billions of yen)
Shareholders’ equity ratio (%)
ROA (return on assets) (%)
ROE (return on equity) (%)
Notes
1: 13 subsidiaries and 11 affiliated companies are covered under the equity method. The equity method is a simple consolidating method used to account for only the portion
of the associated company's net assets and net profit (or loss) that is held by our company. (Sales etc is not included.)
2: Kyuden Information Services Co., Inc. inherited an information systems business from Nishimu Electronics Industry Co., Ltd. as part of a corporate split-up on April 1,
2004 and changed its name to Kyuden Business Solutions Co., Inc.
・ROA (return on assets) = net operating profit after tax divided by average total assets
・ROE (return on equity) = net income divided by average shareholdersÕ equity
・Free cash flow: the cash that can be used freely and is calculated by subtracting the capital expenditure (outlay for the acquisition of fixed assets)
necessary to maintain the current business activities from the cash flow generated from business activities (operating cash flow).
Economic Conditions and Electric Power Demand
20 KYUSHU ELECTRIC POWER CO.,INC.
Using the large industrial power curve as an economic indicator�Economic trends and large-scale industry's power demands closely correlate.
From looking at the economic performance in previous years, when a growth in "power usage" exceeds the growth in "contract
demand" it is an indicator of improved economic conditions, the reverse is an indicator of poor economic conditions. When the
two lines intersect on the graph, it corresponds to a turning point in the economic conditions.� ● "Power usage": The power usage is the sum of the power that a large industry customer (contract of 500 kW or more) buys
and the power that the customer generates privately. It reflects the level of production activity. ● "Contract demand": This reflects the trend in production performance and capital expenditure of plants etc.
Note: Figures are comparison percentage of previous fiscal year.
[Rate of growth compared with the same time in the previous fiscal year]
Contract demandPower usage
6(%)�
4
2
0
-2
-4
-601/06 01/07 01/09 01/11 02/01 02/03 02/05 02/07 02/09 02/11 03/09 03/11 04/0303/01 04/0103/03 03/05 03/07
0.6
0.1
2.02.2
1.60.8
▲2.8 ▲2.8
▲4.2 ▲4.1
▲1.1▲1.1
▲0.2
▲0.9
0.2 3.2
4.0
-1.9 -1.9 -2.2
-1.5
-1.6
-0.6
-0.4
-0.4-0.7 -0.5
1.2
-1.2-0.1-0.8
(Year/Month)
(Compared with the previous year, %)
Trough in January 2002 (Provisional)(Announcement by Cabinet Office in June 6, 2003)
Power usage
Contract demand
0.1
2.4
0.4 -0.2
▲0.7
10.0�
8.0�
6.0�
4.0�
2.0�
0.0�
▲2.0�
▲4.0�
▲6.0
(%)�
March 1991 to October 1993First Heisei recession
June 1997 to January 1999Second Heisei recession
1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003(Fiscal year)
PeakPeak TroughTrough
Trend of the large industrial power curve
■ Trend since 1989
■ Recent trends
New Businesses (As of the end of August 2004)To
tal E
nerg
yC
onsu
mer
and
com
mun
ity s
ervi
ces
Othe
rbu
sines
ses
Kyushu Electric Power Co., Inc.
Kitakyushu LNG Co., Inc.
Kitakyushu LNG Sales and Lorry Transport Corp.
Oita LNG Co., Inc.
Nishinippon Environmental Energy Co., Inc.
Environment Power Supply Co., Inc.
Nishinihon Wind Development Co., Ltd.
Miyazaki Biomass Recycle Co., Inc.
Kyuden Ilijan Holding Corporation (Philippines)
Electricidad Aguila de Tuxpan, S. de R.L. de C.V. (Mexico)
Phu My 3 BOT Power Co., Ltd. (Vietnam)
Electricidad sol de Tuxpan, S. de R.L. de C.V. (Mexico)
COARACo., Ltd.
J Re-Lights Co., Ltd.
Fukuoka Clean Energy Corporation
Kitakyushu Eco-Energy Co., Ltd.
Kyushu Environmental Management Co., Ltd.
Kyuden Sangyo Co., Inc.
Kyuden Good Life Corporation
Kyuden Good Life Kumamoto Corporation
Kyuden Goode Life Kagoshima Corporation
Medical Support Kyushu Co., Ltd.
Kyushu Housing Guarantee Inc.
Kyushu Electric Power Co., Inc.
Kyuken Corporation
Kyushu Rinsan Co., Ltd.
Kyushu I.S.O. Certification/Registration Organization Co., Ltd.
Kyuden Business Front Inc.
REQ Motooka Co., Ltd.
Kyuki Corporation
Kyuden Sangyo Co., Inc
Kyuken Corporation
Koyo Denki Kogyo Co., Ltd.
Reihoku Salt Co., Ltd.
Shinrintoshi Co., Ltd.
Kyushu Meter & Relay Engineering Corporation
Koyo Denki Kogyo Co., Ltd.
eBANK Corporation
Fukuoka Realty Co., Ltd.
Sales of gas and LNG
Distributed generation
New energy generation
Overseas IPP
Broadband content service
Fluorescent bulb recycling
Waste-based generation
Confidential document recyclingSynthetic zeolite sales
Nursing homes for the elderly (private apartments)
Medical support servicesHousing assessmentsReal estate property management
Car park operations
ISO assessment and registrationPersonnel placement
Kyushu university private finance initiativeManufacturing/sales of water pipe tunnel inspection vehicles
Manufacturing/sales of tea beverageLarge public bath centersManufacturing/sales of anti-crime street lightingNatural sea salt manufacturing and sales
Rental videoMagnetic water treatment device salesManufacturing/sales of plates for decorative ceramicsInternet bill payment serviceReal estate investment trust management
Kyushu Captioning Co-Production Center Inc.Caption broadcasting business
Outline of operations (33 businesses) Company names (41 companies)
Kyushu Telecommunication Network Co., Inc.Fiber-optic cable and broadband serviceInternational data
Kyushu Electric Power Co., Inc.
Kyuden Infocom Company Inc.
Dark fiber leasingData center operations
IT solutions
Kyuden International Corporation
Capital Kyuden Corporation
Kyushu Venture Partners Co., Ltd.
Acquisition and holding of securities
21KYUSHU ELECTRIC POWER CO.,INC.
Envi
ronm
ent
and r
ecy
clin
gIT
and
tele
com
mun
icat
ion
22 KYUSHU ELECTRIC POWER CO.,INC.
Overview of Power Generation Facilities (As of the end of March 2004)
Station name Output (kW) Operation commencement date System Location
Genkai 3,478,000(559,000 x 2 )(1,180,000 x 2)
Oct. 1975 Pressurized water reactor
Genkai-cho, Higashi Matsuura-gun, Saga Prefecture
Sendai 1,780,000(890,000 x 2)
July 1984 Pressurized water reactor Gumisaki-cho, Sendai-shi
Approved maximum output Total 5,258,000kW
Nuclear Power Stations
Station name Approved maximum output (kW) Operation commencement date Main fuel Location
Shin Kokura 2,112,000(156,000 x 2) (600,000 x 3)
Oct. 1961 LNG Nishi Minato-cho, Kokura Kita-ku, Kita Kyushu-shi
Karita 735,000(375,000 x 1) (360,000 x 1)
April 1972 Heavy oil/crude oil/coal (PFBC)
Kanda-machi, Miyako-gun, Fukuoka Prefecture
Buzen 1,000,000(500,000 x 2)
Dec. 1977 Heavy oil/crude oil Oaza Hachiya, Buzen-shi
Karatsu 875,000(375,000 x 1) (500,000 x 1)
July 1971 Heavy oil/crude oil Futago, Karatsu-shi
Oita 500,000(250,000 x 2)
July 1969 Heavy oil Oaza Ichinosu, Oita-shi
Ainoura 875,000(375,000 x 1) (500,000 x 1)
April 1973 Heavy oil/crude oil Hikari-machi, Sasebo-shi
Minato* 156,000 Sept. 1960 Coal Shinko-machi, Omuta-shi
Matsuura 700,000 June 1989 Coal Shisa-cho, Matsuura-shi
Shin Oita 2,295,000(115,000 x 6) (217,500 x 4) (245,000 x 3)
June 1991 LNG Oaza Aosaki, Oita-shi
Reihoku Dec. 1995 Coal Reihoku-machi, Amagusa-gun, Kumamoto Prefecture
Sendai 1,000,000(500,000 x 2)
1,400,000(700,000 x 2)
July 1974 Heavy oil/crude oil/LPG Minato-cho, Sendai-shi
Approved maximum output Total 11,648,000kW
Thermal Power Stations
Station name Operation commencement date Location
Takigami 25,000 Kokonoe-machi, Kusu-gun, Oita PrefectureNov. 1996
Approved maximum output Total 207,500kW
Hydroelectric Power Stations (Stations with output 50,000kW or more are listed.)
Approved maximum output (kW)
Hatchoubaru 110,000(55,000 x 2)
Kokonoe-machi, Kusu-gun, Oita PrefectureJune 1977
Otake 12,500 Kokonoe-machi, Kusu-gun, Oita PrefectureAug. 1967
Ogiri 30,000 Makizono-cho, Aira-gun, Kagoshima PrefectureMarch 1996
Yamagawa 30,000 Yamagawa-cho, Ibusuki-gun, Kagoshima PrefectureMarch 1995
Geothermal Power Stations
Shin Oita Thermal Power Station
Operation commencement date
Dec. 1986
Dec. 1975
June 1963
May 1955
March 1932
Oct. 1938
June 1973
Jan. 1926
Jan. 1942
Aug. 1971
Feb. 1961
Station name
Tenzan
Ohira
Hitotsuse
Kamishiiba
Oyodogawa No. 2
Tsukabaru
Yanagimata
Oyodogawa No. 1
Iwayado
Matsubara
Morozuka
Approved maximum output Total 1,773,490kW
Approved maximum output (kW)
600,000
500,000
180,000
90,000
71,300
63,090
61,900
55,500
51,100
50,600
50,000
System
Dam and conduit system (pure pumped storage)
Dam and conduit system (pure pumped storage)
Dam and conduit system
Dam and conduit system
Dam and conduit system
Dam and conduit system
Dam and conduit system
Dam system
Dam and conduit system
Dam system
Dam and conduit system (river pumped storage)
Location
Kyuragi-machi, Higashi Matsuura-gun, Saga Prefecture
Sakamoto-mura, Yatsushiro-gun,Kumamoto Prefecture
Oaza Katauchi, Saito-shi,Miyazaki Prefecture
Shiiba-son, Higashi Usuki-gun, Miyazaki Prefecture
Takaoka-cho, Higashi Morokata-gun, Miyazaki Prefecture
Morotsuka-son, Higashi Usuki-gun, Miyazaki Prefecture
Oaza Uchigawano, Hita-shi, Oita Prefecture
Takazaki-cho, Kita Morokata-gun, Miyazaki Prefecture
Shiiba-son, Higashi Usuki-gun,Miyazaki Prefecture
Oyama-machi, Hita-gun, Oita Prefecture
Morotsuka-son, Higashi Usuki-gun, Miyazaki Prefecture
�
* Decommissioned on April 1, 2004
Hatchoubaru Geothermal Power Station
Hitotsuse Hydroelectric Power Station
Sendai Nuclear Power Station
23KYUSHU ELECTRIC POWER CO.,INC.
Main Facilities (As of the end of March 2004)
1,400
Current phase of deregulation Phase beginning April 2005 Examination beginning from April 2007
Printed in Japan
October 2004
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