kyushu electric power company, incorporated profile 2004 · kyushu electric power company,...

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


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


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


¥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


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)



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.


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.


■ 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

�


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


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


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

�


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


● 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)


Company Data


■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


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


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


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


0

150

180


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


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, %)


(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


【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


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.


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


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


Envi

ronm

ent

and r

ecy

clin

gIT

and

tele

com

mun

icat

ion


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


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 (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 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


Main Facilities (As of the end of March 2004)

1,400


Printed in Japan

October 2004

kyushu electric power company, incorporated profile 2004 · kyushu electric power company,...

Documents