The start of the full liberalization of the electricity retail market in April 2016 ush-ered in a new era for electricity business. Although the managerial environment is undergoing significant changes, HEPCO is promoting a variety of future initia-tives, as we aim to become a company that can respond to the expectations and earn the trust of our customers, local residents, and shareholders.
The Tomari Nuclear Power Station, whose reactors have been shut down for an extended period of time since May 2012, is a power supply source essential for the stable supply of electricity. For the sustainable supply of electric power in Hokkaido in the future, HEPCO is committed to restarting the Tomari Nuclear Power Station on the premise of guaranteeing safety. In addition, with the resolution to ensure that accidents, such as that at the Fukushima Daiichi Nuclear Power Station, do not occur again, we refuse to be satisfied with the status quo and are continuing our ceaseless efforts to further improve safety. We would like to express our deepest gratitude to our customers for their cooperation in conserving power since the shutdown of reactors at the Tomari Nuclear Power Station. We would also like to offer our deepest apologies for the considerable burden placed on our customers as a result of two electricity price hikes. Once the Tomari Nuclear Power Station has returned to commercial operation, we will lower the electricity price with-out delay. In addition, we will eagerly work on expanding our sales activities in order to top the competition and encour-age customers to choose HEPCO, which can be achieved by offering a variety of electricity menus and services that meet customers’ needs and expectations.
Message from the President and Director
HEPCO will also examine the expan-sion of business areas, such as elec-tricity sales outside of Hokkaido and gas supply, thus we will build a foundation for further development as a total energy services corporate group.
Taking the future balance of energy into account, we are also promoting the construction of the Ishikariwan Shinko Thermal Power Station, the company’s first LNG thermal power station, and we are actively committed to taking action, such as the effective use of untapped energy in hydroelectric power and various verification tests to further expand the introduction of renewable energy that are local resources. We will also steadily increase the capacity of the Kitahon HVDC Link which connects Hokkaido and Honshu, in order to ensure a stable supply of power in the future.
For more than 60 years since our foundation, HEPCO has played a role as a responsible energy supplier, with profes-sional technologies and techniques that have been passed down and with a sense of mission to continue to secure electricity supply, 24 hours a day, 365 days a year. Based on our management philosophy of “respect for humanity,” “contribution to local communities,” and “efficient man-agement,” the HEPCO Group will share its corporate vision among all employees, and will work together for the sustainable development of the region and for im-provement of our corporate value as a total energy services corporate group that proceeds hand-in-hand with Hokkaido. To our customers, local residents, and shareholders, we thank you for your con-tinued understanding and support for the business operations of the HEPCO Group. September 2016
Doing our best for the sustainable
development of the region through
responsible energy supply
President and Director
Hokkaido Electric Power Co., Inc.
Efforts for Stable Supply
Pursuing the Best Energy Mix for the
Future and Striving to Realize
a Low-Carbon Society
In Step with People & the Community
Reducing Environmental Impacts
Corporate Profile
Contents
Message from the President and Director Financial Highlights
Fields of Business
Overview of the 2016 Business Plan
Constant Pursuit of Safety Improvements at the Tomari Nuclear Power Station
Day-to-Day Efforts for the Stable Supply of Electric Power
Improvement of Managerial Efficiency
Pursuing the Best Energy Mix for the Future and Striving to Realize a Low-Carbon Society Construction of Power Generation Facilities with an Eye to the Future
Efforts Toward Broader Introduction of Renewable Energy Sources
Development of Energy-saving Services and Activities
Efforts to Reduce Environmental Impacts in All kinds of Areas
Placing Value on the Development of Human Resources and Workplaces
Coexistence with Local Communities
Consolidated Basis
Hokkaido Electric Power Co., Inc. and Consolidated Subsidiaries
Millions of yen
Thousands of U.S. dollars (Note) 694,065 30,046 724,111 21,276 1,826,141 197,222 94.49 291,624 346,250 57,844 695,719 17,099 74.17 5.00 7,781,358.00 $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ 6,142,168 265,893 6,408,061 188,283 16,160,539 1,745,327 0.83 Operating Revenue:
Electric utility operating revenue
Other business operating revenue
Profit attributable to owners of parent
Total Assets
Total Net Assets
Profit (primary) per Share of Common Stock
Non-Consolidated Basis
Hokkaido Electric Power Co., Inc.Note: The U.S. dollar amounts represented here are the results of converting yen values at a rate of ￥113 = US$1 (the prevailing rate on March 31, 2016), and are included solely for convenience.
FY2015
FY2016 FY2016
Financial Highlights
Yen U.S. dollars (Note) ¥ ¥ ¥ ¥ ¥ ¥ ¥ 662,237 30,687 692,925 2,938 1,815,675 188,392 14.30 286,938 339,386 37,604 663,929 4,230 20.58 ̶ ¥ ¥ ¥ ¥ ¥ ¥ ¥
Millions of yen
Thousands of U.S. dollars (Note) 2,580,743 3,064,159 511,893 6,156,805 151,318 0.65 0.04 68,861.57 Operating Revenue: Residential (lighting)
Commercial and Industrial
Other
Profit and Dividends:
Profit
Profit (primary) per Share of Common Stock
Cash Dividends (Common Stock)
Cash Dividends (Class-A Preferred Stock)
Note: The U.S. dollar amounts represented here are the results of converting yen values at a rate of ￥113 = US$1 (the prevailing rate on March 31, 2016), and are included solely for convenience.
Note: HEPCO’s fiscal year begins on April 1 and ends on March 31. Accordingly, FY 2016 runs from April 1, 2015, to March 31, 2016.
FY2015
FY2016 FY2016
Fields of Business
Hokkaido-Honshu (Kitahon) HVDC Link
Sunagawa Nokanan Takisato Uryu
TomuraTokachi
Naie
Okuniikappu Niikappu
Takami
Shizunai
Onbetsu
Tomakomai Tomatoh-Atsuma
Minamihayakita
Ishikariwan Shinko Thermal Power Station Unit 1 (under construction)
Date
Mori Tomari
Hoheikyo
Shiriuchi
■ Transmission line route length Number of support structures ■ Number of substations ■ Distribution line route length Number of support structures
Power Generation Facilities
(as of March 31, 2016)
Power Transmission/ Distribution Facilities
(as of March 31, 2016)
1,647MW 4,214MW
3,900MW 148MW 166MW
2,070MW 25MW 1MW 7,957MW 56 12 6 1 5 1 1 1 71
8,359 km 46,631 22,746 MVA 68,244 km 1,479,040 373
■ Hydroelectric power stations ■ Thermal power stations
Steam power Gas turbine Internal combustion
■ Nuclear power station ■ Geothermal power station ■ Photovoltaic power station Total
Ishikari Thermal Power Trunk Line (under construction)
Hokuto-Imabetsu HVDC Link (under construction) *New route of Hokkaido-Honshu (Kitahon) HVDC Link
◎High quality electricity for years to come
Hokkaido has a population of about 5.4 million people and a population density
of about 65 people per 1 km
2, which is about one-fifth of the national average.
The general impression of Hokkaido as expansive and open may reflect the
nature of the locality where people can lead relaxing lifestyles.
On the other side of the coin, it takes a lot of hard work and effort to deliver
electricity from one end of this vast, yet sparsely populated land to the other. We
must also cope with global warming in order to protect the natural environment.
In addition to the use of a nuclear power station on the major premise of
guaranteeing safety, HEPCO seeks to achieve a balanced mix of power
sources that will benefit the environment, including the expanded introduction
Hokkaido Electric Power Co., Inc.
HEPCO
Area
(as of October 1, 2015) Population(as of January 1, 2016) Number of households(as of January 1, 2016)
22.1%
4.2%
4.8%
83,424.31km2 Hokkaido
377,970.75km2 JAPAN
5,401,210 Hokkaido
128,066,211 JAPAN
2,751,282 Hokkaido
56,950,757 JAPAN
(Source:MInistry of Land, Infrastructure, Transport and Tourism’s Geospatial Information Authority of Japan website)
Hokkaido Data
Location
(Source: MInistry of Land, Infrastructure, Transport and Tourism’s Geospatial Information Authority of Japan website)
Longitude : 139°20′-148°53′east Latitude : 41°21′- 45°33′north
Kyogoku Unit 3 (under construction)
Hydroelectric power station
Another company’s hydroelectric power station Thermal power station
Another company’s thermal power station Nuclear power station
Geothermal power station Photovoltaic power station Substation
Switching station Converter station
Transmission line (275 kV) Transmission line (187 kV) Transmission line (100 kV ‒ 110 kV) Transmission line （direct current） Another company’s transmission line
(Source: Ministry of Internal Affairs
Corporate Vision of the HEPCO Group
Overview of the 2016 Business Plan
Electric power sales outside of Hokkaido
Gas supply
（ ）
Further growth as a total energy services corporate group
In order to achieve further growth
and development as a total energy
services corporate group, the HEPCO
Group will develop a growth strategy
to expand revenue and promote
studies on electric power sales
outside of Hokkaido and on gas
supply including alliances with
other companies.
1. Early resumption of operations at the Tomari Nuclear Power Station and activities to enhance safety
2. Improvement of profits and strengthening the financial base Measures for the early
stabilization management
3. Facilitating sales activities to beat fierce competition 4. Business expansion for further growth
5. Ensuring transmission and distribution facilities as well as power generation facilities to support the stability of future supply
6. Studies on the organization and business management structure towards legal separation of the power transmission/distribution sector
7. Development and securing of human resources that can respond to new challenges 8. Coexistence with local communities and society
Significant period to achieve sustainable growth in this competitive environment and ensure the base for a stable
supply of power in the future in order to maintain our status as a responsible energy supplier
FY 2017-2019 Activities
Management Philosophy of the HEPCO Group
Initiatives as a Total Energy Services Corporate Group
●
The HEPCO Group has defined FY 2017 to 2019 as a significant period to achieve sustainable growth in this
competitive environment and ensure the base for a stable supply of power in the future.
●
With a management philosophy of “respect for humanity,”
“contribution to local communities,” and “efficient
management,” the HEPCO Group is promoting efforts with an eye on the next three years under the group’
s unified
management system where the corporate vision of the HEPCO Group is shared among all employees, in order
to continuously enhance our corporate value.
●
Through these activities, we aim to achieve further growth and development as a total energy services corporate
group and develop our business to respond to all expectations.
Respect for humanity Contribution to local
communities Efficient management
・We will support the sustainable development of the region by fulfilling our responsibility for energy supply.
・Adopting a fresh perspective, we will aggressively take on challenges to achieve further growth as a total energy
services corporate group.
・We will manage business operations in a nimble and agile manner, strengthen our business platform, and
respond to the expectations of our stakeholders.
Growth strategy contributing to revenue expansion
Measures for strengthening our business platform
Expansion of business areas
Electric power industry in Hokkaido Business foundation for
A coastal levee about
1,250 m long and 16.5 m
above sea level was
constructed so that a
15-m-high tsunami, such
as that which struck
the Fukushima Daiichi
Nuclear Power Station,
does not flood the site.
◎Tsunami measures
◎Forest fire measures
We set a firebreak about 2,120 m long by cutting
down trees across a width of 40 to 66 m and spraying
concrete, so that forest fires in the areas surrounding
the Tomari Nuclear Power Station do not spread
to the power station.
◎Earthquake measures
HEPCO has carried out seismic assessments based
on the basis seismic ground motions.* Seismic
rein-forcing works are conducted for facilities as needed.
*Refers to the vibration of bedrock by an earthquake which serves as a benchmark when designing nuclear power stations to be earth-quake-resistant.
◎Securing water sources
Several water storage facilities were originally
installed at the Tomari Nuclear Power Station.
Substitute outdoor water supply tanks (80 t x 5
units) have also been installed upland as a new
water source for the power station.
◎Ensuring the availability of pumps
Measures to address natural phenomena
Reactor core cooling measures
Coastal levee
Safety improvements at the Tomari Nuclear Power Station
During the accident at the Fukushima Daiichi
Nuclear Power Station in 2011, although the nuclear
reactors were successfully “shut down,” the
inun-dation caused by the tsunami prevented the fuel
from being “cooled down” and ultimately the function
of “confining” the radioactive substances was lost.
HEPCO remains committed to continuing to reduce
the risk of nuclear accidents based on our strong
determination to never let an accident like the one
at the Fukushima Daiichi Nuclear Power Station to
occur. Our aim is for a power station that are worthy
of people’
s confidence and trust by building up our
efforts aimed at further improving safety.
Alternative containment vessel spray pump
Efforts for Stable Supply
Constant Pursuit of Safety Improvements at the Tomari
Nuclear Power Station
Multiple pumps have been installed at the Tomari
Nuclear Power Station to cool down the reactors
in the event of an accident. In the event that these
permanent pumps become inoperable, new
permanent “alternative containment vessel spray
pumps” have also been installed.
●
For more than 60 years since our foundation, we have promoted a variety of initiatives designed for
the stable supply of electric power, committed to a mission of safeguarding electricity 24
hours a day, 365 days a year and armed with many years of technical skills as a professional in the
electric power industry.
◎Suppressing the diffusion of radioactive
substances
◎Preventing hydrogen explosion
Ensuring the availability of electricity
Measures for severe accidents
Communication activities
Top management takes advantage of various
opportunities to visit the Tomari Nuclear Power
Station and directly share their thoughts on safety
improvements. They also actively engage in
discus-sions with staff and partner companies and instill
values with top priority on safety in the workplace.
Measures to ensure that electricity is available
have been taken at the Tomari Nuclear Power
Station for many years, including the
develop-ment of multiplex routes for off-site power
(transmission lines) and the installation of multiple
emergency diesel generators.
In order to further improve reliability, we developed
multiplex routes for external power supply,
ex-panded our backup power supply, and increased
the installation of storage batteries.
Continuous implementation of emergency drills
Efforts to further improve safety
Given the unique weather conditions at the Tomari
Nuclear Power Station, such as snow and cold,
heavy machinery is ready for snow removal work,
and emergency assembly drills are continuously
being held to ensure that the Tomari Nuclear
Power Station can respond appropriately to accidents,
even in harsh winter conditions.
To date, HEPCO has used the assessments and
recommendations from the World Association of
Nuclear Operators (WANO) and the Japan Nuclear
Safety Institute (JANSI) to improve safety at the
Tomari Nuclear Power Station and will actively
incorporate these assessments and
recommenda-tions in the future as well.
In addition to participating in the research activities
of the Nuclear Risk Research Center (NRRC), we
are collecting and using knowledge that can result
in safety improvement plans through information
exchange with manufacturers and nuclear power
companies overseas.
Learning from the accident at
the Fukushima Daiichi Nuclear
Power Station, HEPCO installed
two types of hydrogen removal
units with different processing
methods as devices to prevent
a hydrogen explosion.
In the event that a reactor containment vessel is
damaged as a result of a severe accident, HEPCO
prepared water cannons that directly inject
high-pressure water onto damaged sections to
suppress the diffusion of radioactive substances into
the atmosphere.
HEPCO President instructing employees at the Tomari Nuclear Power Station
Emergency drill Heavy machinery for snow
removal work
Passive autocatalytic recombiner Alternative emergency generator set (permanent)
Even as supply capacity remains low due to the
shutdown of reactors at the Tomari Nuclear Power
Station, HEPCO has implemented measures for
Measures for supply and demand associated with the prolonged shutdown of reactors at the Tomari Nuclear Power Station
HEPCO has reduced the frequency of outages by
means of appropriate equipment maintenance 24
hours a day, 365 days a year, in addition to its own
original technology in order to provide a stable
supply of electricity across Hokkaido with its vast
and snowy harsh natural environment. HEPCO is
Prevention of power outages and support for prompt recovery
Patrol of transmission line
Supply-side measures
Efforts for Stable Supply
Day-to-Day Efforts for the Stable Supply of Electric Power
■Duration and frequency of power outages per household per year
250
200
150
100
50
0
2.0
1.6
1.2
0.8
0.4
0.0
248
42
9 8 6 9 9 10
48
1.78
0.41
0.18 0.13 0.110.19 0.16 0.13 0.15
1981 1991 2001 2011 2012 2013 2014 2015 2016（FY）
both supply and demand to ensure that electricity
can be delivered to our customers in a stable
manner.
working to shorten the duration of power outages,
such as through the development of a system that
can quickly identify fault locations in power
trans-mission and distribution lines in order to restore
power as soon as possible in the event of a power
outage.
Emergency power supply systems
Demand-side measures
HEPCO President appealing to people to help save power
Duration Frequency
*The duration of power outages significantly increased in FY 2013 as compared to the previous fiscal year due to an extended outage caused by a blizzard in November.
Crow’s nest removal Frequency
(number of times/household) Duration
(min./household)
・Requests to save power
・Request for customers to accept agreements suppressing their use of
electricity depending on the supply and demand situation
・Disseminate information on the company’
s website and via SNS (Facebook,
Twitter) that will help customers conserve and save energy, such as the
in-clusion of information on the state of power supply and demand in HEPCO
and specific methods for saving power.
・Strengthen patrols and monitoring of operations for power generation and
distribution facilities
・Ongoing installation of emergency power supply systems (total output: 149 MW)
・Operations to increase output of thermal power stations
・Purchase of electricity from customers that have in-house power generation
facilities
Coal freight ship
Diversification of pricing system
Along with making the most of the technical skills
and experience we have accumulated to date, we
are committed to managing business and maintaining
Efforts for Stable Supply
Improvement of Managerial Efficiency
Efforts for Efficient Business Management
Cost items
Costs related to capital expenditure
Personnel
Maintenance
Others
Sale of assets Total Costs related to supply
and demand
16.3
22.1
6.2
17.5
13.4
0 75.6
We are pursuing economic efficiency and stability with the introduction
of fixed annual prices that are common in pricing systems for long-term
contracts in the past, as well as contracts for market-linked pricing that
can also reflect drops in the market.
Decentralization of contract periods
We are working to decentralize long-term, short-term, and spot contract
periods and reduce price fluctuation risks.
Efforts to reduce fuel costs
Topics
※ Charters that are reserved for only one voyage from the loading port to the port of discharge.
We ensure that tariffs for transporting fuel are
kept low mostly by means of contracts with
large private vessels and long-term contracts
that do not specify a particular vessel. Given
that the spot chartering market conditions
have fallen considerably, we are currently
seeking to control transportation costs by
instead increasing spot procurement through
competition.
■Performance in improving efficiency in FY 2016
Main details on streamlining
HEPCO has been working to keep fuel costs
down, even as the fuel costs of thermal power
stations increase sharply due to the prolonged
shutdown of reactors at the Tomari Nuclear
Power Station. Specifically, we are working to
diversify pricing systems and decentralize
contract periods for coal overseas, and to take
advantage of spot chartering* market conditions
for the transportation of overseas coal and oil.
Results
(billion yen)
rational and efficient facilities, not restricted to
past ideas.
Taking advantage of spot chartering market conditions
* The total differs from the sum of the numbers due to rounding. ・Reduction in material and equipment procurement costs as well as costs related
to development and expansion ・Reduction in other costs
・Implementation of emergency spending cuts
・Reduction in executive compensation, salaries and welfare costs
・Reduction in fuel costs and purchased power fees ・Use of electric power exchange
・Reduction in material and equipment procurement costs
・Review of construction work period, work content and construction methods ・Reduction in material and equipment procurement costs
・Development and introduction of new technologies and construction methods ・Review of construction work period
Pursuing the Best Energy Mix for the Future and Striving
to Realize a Low-Carbon Society
Specific Initiatives
Recommendations based on energy conservation
・Implementation of energy-saving services from the customer’s perspective, including recommendations to switch to smart electrical appliances, and the dissemination of information on energy savings.
Power generation
Retail
Power transmission and distribution
Demonstration of small-scale woody biomass power generation using hydrogen Survey of geothermal resources and consideration of commercial development
Efforts for the early resumption of operations and for ensuring stable operations at the Tomari Nuclear Power Station on the major premise of guaranteeing safety
Nuclear power
Thermal power Introduction of the Ishikariwan Shinko Thermal Power Station(LNG: 569.4 MW x 3 units)
・Fulfilled with the best available technologies (BAT).
Hydroelectric power (renewable)
Based on a perspective of “S+3E” (Safety, Energy Security, Economy, and Environmental Conservation), the
HEPCO Group will pursue a suitable energy mix, contributing towards the realization of a low-carbon
society. In addition to efforts for an LNG thermal power station and for the broader introduction of renewable
energies, we will work for the early resumption of operations and for ensuring stable operations at the
Tomari Nuclear Power Station on the major premise of guaranteeing safety.
Renewable
System interconnections HVDC
Enhancing the Kitahon HVDC Link
・Contributes to the broader introduction of renewable energies and activating power transactions in Hokkaido, in addition to ensuring stable power supply in the Hokkaido area.
Networks ・Aims to demonstrate performance and develop and establish optimal control technologies as a new way to Large-scale storage battery system demonstration project adjust power with respect to output fluctuations for wind power and photovoltaic power.
Renewable
Broader introduction of renewable energies
・Introduction of a forecasting system for renewable generation
・Verification tests for the broader introduction of wind power generation using the Kitahon HVDC Link ・Total volume of interconnected inverters as of the end of March 2016 was 3,000 MW; over 20% share of
renewable energies in the overall amount of power generated. Research on output control for generation from livestock manure
Energy savings and CO2 reduction
activities
With an aim of developing an energy mix that ensures a stable energy supply for the future, enhances
price competitiveness and is also compatible with the environment, the HEPCO Group will proceed to
introduce new power sources, such as the Ishikariwan Shinko Thermal Power Station as the company’
s
first LNG thermal power station, and to enhance the Kitahon HVDC Link.
In Hokkaido’
s small-scale power system, we are attempting to utilize additional wind and photovoltaic power
and to maintain power quality, such as by improving the accuracy of forecasts for the output of wind and
photovoltaic power and by establishing control algorithms for the fluctuation of power output.
For the sake of utilizing further renewable energy sources, we are also promoting activities such as: verification
tests for the broader introduction of wind power generation using the Kitahon HVDC Link; a large-scale
storage battery system demonstration project; and utilization of untapped energy in hydroelectric power
generation.
Introduction of the Kyogoku Power Station(Pure pumped-storage station: 200 MW x 3 units)
・In addition to its role during peak supply capacity, the Kyogoku Power Station contributes to the expansion of renewable energy through the introduction of a superior variable speed system for load following capabilities and frequency adjustments due to fluctuating demand.
Take advantage of untapped energy in hydroelectric power generation facilities
●
●
Imabetsu converter station
Existing route: 600 MW
*Facilities owned by J-Power
Seikan Tunnel
Substation Converter station
New route: 300 MW Hokuto
converter station
HEPCO is promoting
detailed discussions on
LNG sale and purchase
agreements with both
Kansai Electric Power
and Malaysia LNG,
with which the
com-pany has signed heads
of agreements on the
procurement of LNG.
Pursuing the Best Energy Mix for the Future and Striving to Realize a Low-Carbon Society
Construction of Power Generation Facilities
with an Eye to the Future
Construction of the Ishikariwan Shinko Thermal Power Station
In order to secure more reliable
power supply in Hokkaido, HEPCO
is aiming to increase the capacity of
the Kitahon HVDC Link (600 MW)
by adding a new 300-MW route.
We will steadily proceed with work
towards the commencement of
operations in March 2019.
Reinforcement of the Hokkaido-Honshu (Kitahon) HVDC Link
◎Features of the Ishikariwan Shinko Thermal
Power Station
◎Overview of the Ishikariwan Shinko
Therma Power Station
◎Routes
◎LNG Procurement
Architectural rendering of the Ishikariwan Shinko Thermal Power Station
Signing ceremony with Malaysia LNG
*Date of Construction plan submitted in line with the Electricity Business Act
High power generating efficiency
Location Zenibako, Otaru City Natural gas
Unit 1 Unit 2 Unit 3
Output (1,708.2 MW)
569.4 MW 569.4 MW 569.4 MW
Construction Work Starting*
August 2015 March 2020 (scheduled) March 2025 (scheduled)
Commencement of Commercial
Operation (scheduled) February 2019 December 2023 December 2028 Using a combined cycle power generation
system, which involves a combination of gas and steam turbines, and offers high efficiency
Top operability
Able to respond immediately to demands for electricity because of the short time needed to start the power station and the quick speed required to adjust generated output.
Outstanding environmental performance
Natural gas has superior environmental perfor-mance because it emits less CO2 during
combustion than other fossil fuels.
Vendor
Main Supply Source Contract Period Contracted Quantity
Kansai Electric Power Co., Inc
Multiple LNG procured by Kansai Electric Power Co., Inc
10 years from April 1, 2018
Up to 3 vessels/year (about 200,000 t)
Malaysia LNG
LNG produced by Malaysia LNG
Up to 2 vessels/year (about 130,000 t)
Types of Fuel
The Ishikariwan Shinko Thermal Power Station
fueled by LNG (liquefied natural gas) is being
constructed as part of HEPCO’
s efforts to address
aging at existing thermal power stations, diversify
fuel types, and secure a stable power supply for
the future. We will steadily proceed with
construction, aiming to start commercial operation
of the first unit in February 2019.
HEPCO is actively working to expand the
introduction of renewable energy sources,
such as hydroelectric power, wind power,
and photovoltaic power. As of the end of FY
2016, the amount of energy produced
exceeded 3,000 MW.
Although the level of wind and photovoltaic
power generation corresponding to grid
connection applications in Hokkaido has
reached the 30-day output control frame,
*1under the new rule,
*2HEPCO has continued
to accept grid connection applications.
The share of renewable energy sources in
the overall amount of power generated
(including the amount generated since the
launch of the Feed-in Tariff (FIT) scheme) is
over 20%.
Track record introducting renewable energy sources
Large-scale storage battery system
demonstration project
HEPCO is engaged in research and development on
output control of livestock-based biomass power
generation, which is closely related to Hokkaido’
s
key livestock industry and which has roots in the
local community.
R&D and demonstration projects on
biomass power generation
◎Capacity of renewable energy source
installations in Hokkaido
◎Configuration of Amount of Power
◎Introduction of wind power and photovoltaic power
in Hokkaido
Photovoltaic 973 MW Hydroelectric 1,641 MW
FIT electric power
Pursuing the Best Energy Mix for the Future and Striving to Realize a Low-Carbon Society
Efforts Toward Broader the Introduction of Renewable
Energy Sources
Track record in FY 2016
Renewable energy sources : Over 20%
16％
Coal 49％ Oil 27％ 6％ Biomass 83 MW
Wind power 315 MW
Geothermal 25 MW
Livestock-based biomass power station Storage tank for electrolyte solution
As a participant in a demonstration project by the
Ministry of Economy, Trade and Industry (METI)
on emergency large-scale storage battery systems,
HEPCO has installed a large-scale storage battery
at an electrical substation (rated output of 15 MW,
rated capacity of 60 MWh).
We have been steadily working on the development
of performance demonstration and control
technolo-gies as a new way to
adjust power with
respect to power
output fluctuations
for wind power and
photovoltaic power.
Renewable energy sources (other than FIT electric power)
(MW)
(FY) 1600
1400 1200 1000
800 600 400 200
0 991 2
3 4 5 7 9 11 13
17 22 31 43 63 104 354
612
7 37 78
156 156 159 170 241 243 258 258 257276 289 289 316 318
00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15
973
315
16 Wind power introduction Photovoltaic power introduction
* Total as of March 2016: 3,037 MW
* The figure for hydroelectric does not include the Kyogoku Power Station, which is a pure pumped-storage hydroelectric (PSH) power facility.
Wholesale transactions of electric power, other 2％
*1 Amount of grid connection applications able to be accepted by controlling power output (maximum: 30 days, or 720 hours for wind and 360 hours for photovoltaic) to balance supply and demand. (In the case of HEPCO, 360 MW for wind and 1,170 MW for photovoltaic.)
Helpful recommendations to save energy
Dissemination of information over the Internet
Development of Energy-saving Services and Activities
Pursuing the Best Energy Mix for the Future and Striving to Realize a Low-Carbon Society
HEPCO supports the creation of comfortable lifestyles
for our individual customers. This includes providing
information on general energy savings for
house-holds, and offering introductions to energy-saving
facilities and equipment, such as heat pump systems
and HEMS (Home Energy Management System). We
Heat pump system can be used to achieve energy sav-ings and reductions in CO2 emissions as they can
effec-tively incorporate heat energy in the air and underground using electric power.
Image of a heat pump system Recommended Electric System
Electrical energy
Energy source for conventional electrical
heater equipment
Electrical energy
Renewable energy from air, water and ground
Energy source for heat pump electrical equipment Installation of
heat pump system
As a result
&
EcoCute: Economically-efficient smart water heaters
Individual customers Corporate customers
also provide support for our corporate customers (for
example, commercial buildings and restaurants) to
reduce energy consumption with recommendations
of electric systems such as high-efficiency heat pump
equipment (air conditioning, hot water supply,
snow-melt) and electric kitchens.
Customers can check electricity usage and rates
in our “Web Rates Notification Service.” Customers
can gain an understanding of power-saving effects
at a glance since they can view graphs of their
Membership-based Web Service: HEPCO Ene Mall
Topics
With the full liberalization of the electricity
retail market, on June 1, 2016, we launched
“HEPCO Ene Mall” a membership-based web
service to encourage customers to continuously
choose HEPCO. Through the Internet, Ene Mall
offers customers helpful lifestyle information,
contents, and discount point services that they
can enjoy.
暮 広 、 貯 、 、
Energy savings
Reduction in CO2 emissions
Electric kitchens with energy-efficient IH cookers
High-efficiency heat pumps that perform well even in severe, cold winters
Air conditioners for cold climates: Environmentally-friendly smart heating appliances that completely heat rooms
Reducing Environmental Impacts
Efforts to Reduce Environmental Impacts in All kinds of Areas
The prolonged shutdown of reactors at the Tomari
Nuclear Power Station after the Great East Japan
Earthquake has caused a big increase in CO
2emissions
due to the increase in thermal power generation.
HEPCO has committed itself to restarting operations
at the Tomari Nuclear Power Station as soon as possible
with every consideration for safety. Once the power
station has restarted, we will promote safe and stable
operations in an effort to reduce CO
2emissions.
◎Utilization of nuclear power
◎Environmental protection measures at
electric power facilities
(Air pollution control)As well as maintaining the functions of thermal
power stations through regular inspections of
facilities, HEPCO is striving to maintain and improve
power generation efficiency such as by introducing
high-efficiency power generation facilities.
◎Maintenance of power generation
efficiency of thermal power stations
Overall image of environmental policies and action items of the HEPCO Group
Promoting measures against global warming
Promoting environmental conservation in business areas
0 5 10 15 20 25 30
0 20 40 60 80 100
▼Facility utilization rate (%) CO2 emissions (million t-CO2)▼
1991 2007 2008 2009 2010 2011 2012 2013 2014 20152016(FY) 10.78
15.08 16.78 18.72 13.62 11.42
15.60
21.44 20.77 20.35
80
93 89.7 66.2
81.9 89.7 58.6
4.3 0.0 0.0
Introduction of Tomari Unit 3
Shutdown of Tomari Units 1 and 2 Shutdown of Tomari Unit 3
0.0
19.14
■Changes in CO2 emissions and facility utilization rate at the
Tomari Nuclear Power Station
*to forge relations of trast with costomers
HEPCO monitors the state of emissions of SOx
(sulfur oxide) and NOx (nitrogen oxide) in thermal
power stations and is engaged in a variety of
emission reduction measures.
We conduct measurements and research to understand
the impacts on surrounding areas, and in each case,
we have confirmed that there have been no impacts.
SOx Reduction Measures
Dust Reduction Measures NOx Reduction Measures
・Installation of electrostatic precipitators and other devices to remove dust from exhaust gas
・Adoption of exhaust gas mixed combustion system ・Use of burners to reduce the amount of NOx generated
during combustion
・Installation of flue gas denitration equipment to remove NOx from exhaust gas
３ Promoting the Formation of
a Recycling-Based Society
● Promotion of the 3Rs(Reduce,Reuse, Recycle)
● Expansion of effective use of coal ash ● Expansion of green procurement
４ Improving the Level of
Enviromental Management
● Establishment of an environmental management system
● Execution of audits
● Utilization of environmental accounting
● Introduction of environmental education
５ Developing “Environmental
Relations*” Activities
●Proactive information provision
5
4
2
3
1
■Environmental Policies and action items
１ Promoting Measures against
Global Warming
● Mitigation of greenhouse gas emissions primarily by using nuclear power ● Utilization of renewable energy ● Improvement of power generation efficiency and redution of transmission and distribution losses
● Promotion of energy savings
２ Promoting Environmental
Conservation in Business Areas
● Execution of air, water, and other environmental conservation measures
● Manegement of chemical substances
● Promotion of technical development
CO2 emissions Facility utilization rate at the Tomari Nuclear Power Station
・Use of low-sulfur fuel
Promoting the formation of a recycling-based society
◎Recycling of industrial waste
HEPCO recycles almost all generated
waste, such as coal ash and desulfurized
gypsum generated at thermal power
stations, as well as debris from waste
concrete pillars that is generated in
power distribution work.
Our recycling rate in FY 2016 of 95.8%
saw us achieve our target recycling
rate (95%). HEPCO will continue to
work to improve recycling rates
even more in the future.
■Changes in recycling of industrial waste
Recycling rate (%) Recycling amount (1,000 t) Volume of waste to final disposal (1,000 t) 0
30 60 90 120 150
1996 2001 2006 2011 2012 2013 2014 2015 2016 （FY）0
20 40 60 80 100
（1,000 t） （%）
363 734
821 796
1,084 1,146 1,139 1,080 1,094 392
111 24 37
31 24 24 31 48
48.1
86.9
97.2
95.7 97.3
97.9 98.0
97.2
95.8
Improving the level of enviromental management
We have developed a unified group system to
steadily promote environmental initiatives based
on the “HEPCO Group Environmental Policies.”
Under this system, we are working to reduce the
Developing “environmental relations” activities
We carry out local cleanup activities and
tree planting activities with local residents
in all areas of Hokkaido.
■Organization Promoting the Environmental Management System
President and
Director General manager of Planning DivisionExecutive Vice Presidents
Environment Committee Chair: General manager of Planning Division Members: Related division general managers, Internal Audit, others appointed by Chair
Executive Officers General managers
Group companies
Group companies Environmental Management Officers
Energy Conservation Measures Committee Chair: Planning Division Deputy General manager Members: Division General managers nominated by Chair, other.
Working Group on Energy Savings
Working Group on the Environment
HEPCO Group Environmental Promotion Committee
amount of electricity used and the amount of copy
paper purchased at our offices, and we are providing
environmental education to employees.
Management and Operations Committee
Environmental Management Officers Division General managers, branch General managers, other
In Step with People & the Community
Placing Value on the Development of Human Resources
and Workplaces
Systematic human resources development & transfer of technical expertise
As HEPCO veteran employees
approach retirement, one generation
of workers is rapidly making way
for a younger generation. Given
such a situation, in addition to
securing the personnel necessary
for the stable supply of electric
power into the future, we will continue
to promote the early development
of human resources and the transfer
of skills to younger workers.
More active involvement of women in the workplace
HEPCO upholds “respect for humanity” as one of
its management philosophy and strives to create
rewarding workplaces where the personalities and
individualities of all employees are respected and
where they can demonstrate their abilities, regardless
of gender. We have formulated a plan of action to
promote the participation of more women in the
workplace.
In the action plan, we have set a target to increase
the number of women in managerial positions to
twice or more than the current number by FY
2020. To achieve this, we have continued to promote
specific initiatives. Since June 2016, we have also
worked to further reflect women’
s perspectives in
HEPCO has formulated an action plan based on
legislation and is carrying out activities to provide
support to its employees who keep working while
raising children.
We were authorized by the national government as
“a company that supports childcare (kurumin)”
since we achieved all of the targets listed in our
action plan, including a childcare leave rate for
women of 100%.
Support for a good balance between
work & childcare
HEPCO Group’
s HOKUDEN ASSOCIA employs 24
people with disabilities (as of June 1, 2016), engaged in
printing, bookbinding, closed-captioned production,
merchandise sales, and other activities. HEPCO will
continue to support the social independence and
social participation of people with disabilities
through employment.
Support for the social independence and social
participation of people with disabilities
On-the-job training on a transmission line tower Operational training for a simulated accident using an operation training simulator at the Tomari Nuclear Power Station
Training for female employees Leaflet produced by
female employees
management with the inclusion of two women as
independent outside directors and independent
outside auditors.
Sales of Japanese larch soap The “Kurumin Mark” is the
Recognizing that without the sustainable development
of local communities, there will be no development
in the HEPCO Group, we are contributing to the
development of the society and economy and creating
culture through the provision of electric
power-based products and services. We are fulfilling our
role as a member of society based on our management
philosophy of “respect for humanity,”
“contribution
to local communities,” and “efficient management.”
Under a management system with a unified HEPCO
In order to respond to the expectations and gain the trust of society, all the officers and employees of the
HEPCO Group ensure compliance in all aspects of our activities and fulfill our corporate social responsibility
(CSR) duties based on the HEPCO Group CSR Behavior Charter.
HEPCO Group CSR Behavior Charter
◎Basic idea
◎Codes of Behavior
We value communication with our customers.
Information on HEPCO’
s business activities and
information that will help customers in their daily
lives are disseminated using information bulletins
as well as social media such as Facebook, Twitter,
and YouTube.
Information dissemination using a diverse set of media
In addition to disclosing information to shareholders
and investors in a timely and appropriate fashion,
interactive activities are conducted to allow for
appropriate capital market evaluation.
Communication with shareholders and investors
Participation in community activities
Our employees visit
schools and deliver
classes on energy and
the environment. Topics
include about how power
is generated, the flow
of electricity to our
homes, and on radiation
that surrounds us.
HEPCO participates in
community activities,
such as local cleanup
activities and
snow-removal volunteer events.
Assisting with education on energy and the environment
In Step with People & the Community
Coexistence with Local Communities
Group, we are striving to secure society’
s trust
and enhance our corporate value by implementing
transparent and fair business practices.
In addition, we position safety as the highest priority,
respect human rights and give consideration to an
environment when expanding business activities.
The HEPCO Group acts in accordance with the
following codes of behavior, in basic recognition of
these issues.
Visiting lecture at an elementary school
Offer products and services focused on electric power, putting the satisfaction of customers first. Sincerely respond to the expectations and the trust of the local community
Respond in good faith to the expectations of our shareholders and investors Create a safe and rewarding workplace for our employees
Carry out transparent and fair trade as partners on the basis of equal and mutual trust with business partners Perform business activities while being actively involved in issues related to the global and regional environment
Ensure compliance in all aspects of business activities
Volunteering to remove snow Customers
Local community Shareholders and investors
Employees Business partners
Corporate Data (as of March 31, 2016)
Organization Chart (as of June 30, 2016)
Board of Directors and Auditors (as of June 28, 2016)
Established
Capital Stock (non-consolidated)
Total Assets (non-consolidated)
Peak Demand (generating end, record renewed on January 12, 2011)
Gross Income (ordinary revenue in FY 2016)
Number of Employees (non-consolidated)
President and Director
Akihiko Mayumi
Member of the Board, Executive Vice President Member of the Board, Executive Vice President Member of the Board, Executive Vice President Member of the Board, Executive Officer Member of the Board, Executive Officer Member of the Board, Executive Officer Member of the Board, Executive Officer Member of the Board, Executive Officer Member of the Board, Executive Officer Member of the Board, Executive Officer Director
Director
Senior Corporate Auditor Corporate Auditor Corporate Auditor Corporate Auditor Corporate Auditor
Osamu Sakai Michihiro Soma Yutaka Fujii Masahiro Mori Ichiro Sakai Hiroaki Furugori Noriaki Oi Motoi Ishiguro Kazuhiko Ujiie Gen Uozumi Shigeki Ichikawa Ryoko Sasaki Kanji Abe Hideo Seo Jun Hasegawa Yukihiro Shimomura Noriko Narita May 1, 1951
¥114,291 million 80,783 1 ¥1,765,091 million 3,630,512 398,956 4,029,468 5,788 MW 11,070,490 MWh 2,373,257 MWh 15,148,335 MWh 28,592,082 MWh ¥698,644 million 5,660
Chairman of the Board
Yoshitaka Sato
Common Stock Class-A Preferred Stock Number of
Shareholders
Residential
Commercial and industrial Total
Number of Contracts
Residential
Commercial and industrial Eligible customers Total
Electricity Sales
(FY 2016)
Chairman President Executive Vice Presidents Executive Officers
Internal Audit Sec. Secretary Office Planning Division Corporate Planning Dept.
Environmental Affairs Office
Information Systems & Telecommunications Dept. Central Information and Telecommunications Office Research & Development Dept.
Customer Service Division
Sales Dept. General Affairs Dept. (only in Sapporo)
Sales Dept. (only in Sapporo) HEPCO Contract Center Service Offices
Power Network Division
Engineering Dept.
Power Wheeling Center Central Load Dispatching Center
General Power Network Centers Trunk Network Work Center
Power Network Centers Branch Offices
Power Generation
Division Thermal Power Dept.Fuel Office
Coal Ash Recycling Promotion Office
Thermal Power Stations Geothermal Power Station Internal-combustion Power Stations Nuclear Power Quality Assurance Office
Nuclear Power Dept.
Nuclear Fuel Management Office
Tomari Nuclear Power Office Tomari Nuclear Power Station Hydropower Dept. Hydropower Centers
Civil Engineering Dept.
Hydroelectric Power Station Construction Office Thermal Power Station Construction Office Business Support
Division Personnel & Labor Relations Dept.General Training Center Public Relations Dept.
General Affairs Dept.
Business Ethics Office Litigation Office Power Station Siting Office Accounting & Finance Dept.
Business Strategy Office
Distribution Dept.
Distribution Dept.(only in Sapporo)
Asset Planning Office
HEPCO Group Companies (as of June 30, 2016)
Company name/Date of establishment Principal Business
Hokkai Electrical Construction
October 1, 1944 1,730
Electrical and telecommunications works; civil engineering and construction; piping, air-conditioning and water supply/drainage facility works; disaster prevention/security equipment works
Thermal power generation business; commissioned operation of thermal power stations; construction, maintenance, repair and operation of power generation facilities and various types of plants; consulting services
Design, printing and bookbinding; production of closed captions; sales of corporate merchandise and gift products; sales of everyday sundries, food, etc.
Document management improvement business; confidential-document destruction and recycling services
Power generation business utilizing hydroelectric power, photovoltaic power and wind power; commissioned operation and maintenance of power generation facilities; consulting services
Business related to electricity meter inspection and electricity billing; design, investigation and maintenance of power distribution equipment; general consultation services concerning repair of housing appliances in all-electric homes; proposals for energy conservation
Telecommunications services, such as Ethernet communications networks and Internet connections; installation, maintenance, supervision and consulting of information communications networks; sales of network-related machinery and equipment; security business
Consulting, development, operation and management, and education regarding information processing systems; sales of information processing equipment and software; Internet data center services; other information processing related services General management of buildings; civil engineering and construction; environmental conservation (e.g., greenery maintenance and management); sales of fuel, equipment and materials; public bathhouse business; cleaning/security service business; utility pole advertising
Maintenance, manufacture and sales of electricity meters; agency business of inspection; tests and installation of electric meters, machinery and equipment
Comprehensive construction consulting services in the fields of civil engineering, construction, electricity, environment and energy
Unloading, storage and delivery of overseas coal; marine transport agency business; customs clearance
1,271 Capital Stock
(millions of yen) Number of Employees*
Hokkaido Electric Meter Industry
August 1, 1954 30 178
HOKUDEN KOGYO
April 2, 1956 95 297
HOKUDEN SOGO SEKKEI
July 1, 1974 30 157
Hokkaido Power Engineering
November 1, 1974 1,660 1,243
The Tomatoh Coal Center
July 1, 1982 5,000 43
HOKUDEN ECO-ENERGY
December 11, 1982 1,860 118
Hokuden Service
March 20, 1985 50 1,965
Hokkaido Telecommunication Network
April 1, 1989
5,900 243
Hokuden Information Technology
June 1, 1991 200 405
HOKUDEN ASSOCIA
June 29, 2007 300 35
Hokkaido Records Management
1 3 5 7 9 10 11 13 14 29
Five-Year Summary (Consolidated Basis) Financial Review (Consolidated Basis) Business Risk
Consolidated Balance Sheets
Consolidated Statements of Operations
Consolidated Statements of Comprehensive Income Consolidated Statements of Changes in Net Assets Consolidated Statements of Cash Flows
Notes to Consolidated Financial Statements Independent Auditor’s Report
Financial Section 2016
Year Ended March 31, 2016
Hokkaido Electric Power Co., Inc.
Statements of operations:
Operating revenue………
Operating income (loss) ………
Ordinary income (loss)………
Profit (loss) attributable to owners of parent*1…… Comprehensive income ………
Assets and capital:
Total assets ………
Net assets ………
Per share of capital stock (yen):*2
Profit (loss) (primary)………
Net assets………
Cash dividends (Common Stock)………...…
Cash dividends (Class-A Preferred Stock) ………
Financial indications (%):
Return on shareholders' equity………
Shareholders' equity ratio ………
Price earnings ratio *3………
Cash flows:
Cash flows from operating activities ……….
Cash flows from investing activities ………
Cash flows from financing activities ………
Cash and cash equivalents at end of period ……
Number of employees*4………
¥ 724,111 43,100 28,062 21,276 ¥ 8,993
¥ 1,826,141 ¥ 197,222
¥ 94.49 644.67 5.00 ¥7,781,358.00 11.68 10.21 9.98
¥ 115,972 (149,013) (10,169) ¥ 108,805 10,985
¥ 582,990 (115,493) (128,184) (132,819) ¥ (131,591)
¥1,660,740 ¥ 190,403
¥ (646.08) 871.17 − ¥ − (53.62) 10.78 −
¥ (41,215) (113,125) 176,809 ¥ 77,357
10,938
¥ 634,439 2,482 (9,669) (72,066) ¥ (73,036)
¥1,618,850 ¥ 327,280
¥ (350.55) 1,538.44 50.00 ¥ − (20.12) 19.54 −
¥ 106,941 (107,282) 32,977 ¥ 53,593
8,252 ¥ 630,340
(80,168) (95,370) (62,972) ¥ (54,171)
¥1,782,776 ¥ 146,731
¥ (306.34) 657.60 − ¥ − (38.76) 7.58 −
¥ 13,912 (130,484) 160,292 ¥ 121,077
11,069 ¥ 692,925
4,750 (9,343) 2,938 ¥ (6,551)
¥1,815,675 ¥ 188,392
¥ 14.30 613.70 − ¥ − 1.88 9.81 66.08
¥ 94,331 (114,154) 50,763 ¥ 152,016
11,027
Five-Year Summary (Consolidated Basis)
Hokkaido Electric Power Co., Inc. and Consolidated Subsidiaries
Fiscal years ended March 31, 2016, 2015, 2014, 2013 and 2012
*1 As a result of applying the Accounting Standards for Business Combinations (Accounting Standards Board of Japan Statement No. 21, September 13, 2013), etc., the Company changed net income (loss) to profit (loss) attibutable to owners of parent at the beginning of the current fiscal year.
*2 Diluted profit per share is not provided for 2015 and 2016 as there are no dilutive securities.
Diluted profit per share is not provided for 2012, 2013 and 2014 as there are no dilutive securities and the Companies recorded net loss. *3 Price earnings ratio is not provided for 2012, 2013 and 2014 as the Companies recorded net loss.
*4 Accounting for Hokkaido Electric Meter Industry, Hokuden Service and Hokuden Information Technology was previously conducted under the equity method. Since 2013, these organizations have been treated as consolidated subsidiaries in view of their importance.
Millions of yen
2016 2015 2014 2013 2012
Operating revenues / Operating income (loss) Net assets / Shareholders’ equity ratio
2012 2013 2014 2015 2016 2012 2013 2014 2015 2016 (billions of yen) (billions of yen) (%)
12,078 2,651 17,416 32,145
35,083 3,773 20,564 10,663 83 4,865 (3,429) (46) (4,328) 32,145 11,818
2,696 16,670 31,184
28,685 3,422 24,349 784 130 6,283 (8) (22) (3,754) 31,184 11,595
2,602 16,439 30,636
27,461 3,875 23,441
−
145 6,772 3 (23) (3,577) 30,636 11,236
2,429 16,145 29,810
26,360 3,394 22,804
−
162 6,809 12 (47) (3,324) 29,810 11,071
2,373 15,148 28,592
25,791 3,502 22,158
−
131 6,220 9 (120) (3,308) 28,592
GWh
2016 2015 2014 2013 2012
Other data (Non-consolidated):
Electricity sales:
Non-eligible customers
Residential ………
Commercial and industrial ………
Eligible customers………
Electric power supply:
Generated by………
Hydroelectric ………
Fossil fuel ……….
Nuclear ………
Renewable ………
Purchased power (net) ………
Interchange power (net) ………
Power used for pumped storage ………
Transmission loss and other ………
Electricity Sales Electric Power Supply (Generated by)
5,000 10,000 15,000 20,000 25,000 30,000 35,000 40,000
5,000 10,000 15,000 20,000 25,000 30,000 35,000 40,000
(GWh) (GWh)
32,145 31,184 30,636
29,810 28,592
35,083
28,685 27,461
Financial Review (Consolidated Basis)
Operating Performance
In the fiscal year ended March 31, 2016, operating revenue of Hokkaido Electric Power Co., Inc. Group (hereafter “the HEPCO Group”) increased by ¥31,186 million (+4.5%) from the previous year to ¥724,111 million on a consolidated basis.
Meanwhile, operating expenses decreased by ¥7,164 million (-1.0%) from the previous year to ¥681,010 million.
Consequently, operating income increased by ¥38,350 million (+807.4%) from the previous year to ¥43,100 million on a consoli-dated basis. Profit attributable to owners of parent increased by ¥18,337 million (+624.2%) from the previous year to ¥21,276 million.
Electric Power Segment
Electricity sales during the current fiscal year decreased by 4.1% from the previous year to 28.6 billion kWh.
Electricity sales to residential and commercial/industrial customers decreased by 1.6% to 13.5 billion kWh, primarily due to efforts by such customers to reduce power consumption.
Electricity sales to eligible customers decreased by 6.2% to 15.1 billion kWh, due chiefly to efforts to decrease in contract electricity demand from commercial customers and to a decrease in production in the paper & pulp and steel industries.
Operating revenue in the electric power segment increased by ¥31,827 million (+4.8%) year on year to ¥694,065 million despite decrease in electricity sales and decrease in fuel cost adjustments by lower fuel prices, due primarily to a rise in electricity rates in November 2014 and impacts of the feed-in tariff (FIT) scheme for renewable energy. Operating expenses decreased by ¥5,838 million (-1.0%) year on year to ¥655,115 million, despite impacts of the feed-in tariff (FIT) scheme for renewable energy and increase in repair costs for measures against aging facilities chiefly due to lower fuel prices and efforts to enhance the efficiency of overall operating activi-ties.
Consequently, operating income increased by ¥37,665 million from the previous year to ¥38,949 million on a consolidated basis.
Other
Operating revenue from other business decreased by ¥641 million (-2.1%) year on year to ¥30,046 million, due chiefly to decreased sales in the construction industry. Operating expenses decreased by ¥1,326 million (-4.9%) from the previous year to ¥25,895 million, mainly because of decreased sales costs in the construction industry.
Financial Position (Assets)
As of March 31, 2016, total assets stood at ¥1,826,141 million, up ¥10,465 million (+0.6%) from the previous year. This was primarily due to an increase in construction in progress, such as construction of the Ishikariwan Shinko Power Station Unit 1 (thermal power facility), despite a decrease in cash and deposits.
(Liabilities)
Total liabilities were ¥1,628,918 million, up ¥1,635 million (+0.1%) from the previous year, mainly due to an increase in notes and accounts payable-trade.
(Net assets)
Net assets totaled ¥197,222 million, up ¥8,830 million (+4.7%) from the previous year, primarily due to an increase in retained earnings as a consequence of posting profit attributable to owners of parent.
As a result, the shareholders’ equity ratio increased by 0.4 points from 9.8% of the previous year to 10.2% at the end of current fiscal year.
Cash Flows
Cash and cash equivalents at year-end stood at ¥108,805 million, down ¥43,210 million (-28.4%) from the previous year.
(Cash Flows from Operating Activities)
Net cash provided by operating activities increased by ¥21,641 million (+22.9%) from the previous year to a net inflow of ¥115,972 million, chiefly due to an increase in profit before income taxes.
(Cash Flows from Investing Activities)
Net cash used in investing activities increased by ¥34,858 million (+30.5%) from the previous year to a net outflow of ¥149,013 million, chiefly due to acquisition of noncurrent assets.
(Cash Flows from Financing Activities)
