TEPCO; Overview and Challenges Takashi HAYASHI Tokyo Electric Power Company Oct.24，2005

Contents Overview and latest topics in TEPCO Current status and experiences of Japan’s Liberalization

Overview and Latest Topics

(Based on electric service contracts closed as of March 31,2005 ) Company Highlight 2004FY Customers 27,740,000 (Based on electric service contracts closed as of March 31,2005 ) Electricity Sales 286,741 GWh Maximum Demand 64,300 MW (July 24,2001) Power Generation Capacity Total: 62,825MW Hydro: 8,521MW Thermal: 36,995MW Nuclear: 17,308MW Wind: 1MW Number of Employees 38,510 (as of March 31,2005)

Overall Transmission Network in TEPCO UHV - designed The Sea of Japan 9GW 9GW Large Power Flow Large Power Flow 11GW 6GW 3GW 5GW Pacific Ocean Center of Tokyo 50 100km

UHV Transmission Technology

UHV Substation Equipment Test Site

Latest Topics Construction of the Bulk Power System Operation Center in Tokyo suburb area, which has substitutive function for the Central Load Dispatching Center as a risk management for disaster

2. Current Status and Experiences of Japan’s Liberalization

Power Systems in Japan AC interconnection(500kV) AC interconnection(154kV～275kV) DC interconnection Back-to-Back Frequency Converter AC-DC Converter 187kV Donan line Hokkaido 5 GW Hokkaido-Honshu HVDC 600MW Shin-Shinano F.C. 600MW 275kV Hokubu Line Tohoku 15GW -Distance between Kyushu- Hokkaido is about 2000 km -Utilities are located sequentially - Available capacity (ATC) is relatively scarce Minami-Fukumitsu BTB 500kV Echizen-Reinan line 500kV Soma-Futaba Line Hokuriku 5GW 500kV Seiban-Higashi Okayama line 64GW Tokyo Chugoku 11GW Kansai Chubu 25GW 30GW Sakuma F.C. 300MW 3333 Shikoku 6GW Kyushu 16GW Kii-suido HVDC 1400MW 500kV Honshi tie line 500kV Kanmon tie line 60 Hz 50 Hz

Characteristic of Load Curve in TEPCO Load Curves in Countries and Regions Ｇｅｒｍａｎｙ UK TEPCO PJM (Hour) Load increases quite steeply in the morning

Present Electricity Market System Partial liberalization of the electricity retail market Target:Eligible Customers (Contract Demand≧50kW Voltage ≧6,000V) New Entrants use Wheeling Service provided by electric utility companies.(TPA system) Wholesale Suppliers Other Electric Utilities New Entrants Generation Electric Utility Company Transmission & Distribution Wheeling Service Retail Eligible Customers Other Customers Accounting Separation(to avoid internal subsidies) Regulated Liberalized

Functions of Electric Power System Council of Japan (ESCJ) Board of Directors Utility, Wholesaler, Alternative Supplier, Independent member Power Exchange OASIS Congestion Management of Inter-ties Enhancement Procedure Management Grid Code (basic) Dispute resolution ESCJ Tohoku Electric Power Co. TEPCO Inter-tie 9 Vertically Integrated Utilities Planning, Construction and Operation of regional grid for reliable and economic power system operation Grid Code (regional)

Start of Japan Electric Power Exchange (JEPX) Start with two types of products Spot markets : Trade of day-ahead electricity Forward markets kWh Yen/kWh

Comments on Regulatory Reform Steps from Japan’s Experience We should take care of … Consideration of the characteristics of the power systems ‘Well-ordered’ play for participants Step-by-step liberalization Opinions from grid operator’s/planner’s point of view

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