3.2011
2008 to 2010 (Avg.) (FY)20100
300.0
600.0
900.0
1,200.0
1,500.0
1,800.0
1,342.9
133.5
267.8
1,346.1
206.0
520.2
1,642.930%44%FuelPurchased power
Personnel
Maintenance
Miscellaneous
Depreciation
Interest charges
Taxes and dues
Other
Approx. 20%
increase
Approx. 80%
increase
Ordinary Expenses (Non-consolidated)
Billions of Yen
A number of factors, including delays in the resumption of nuclear power plant operations, triggered a jump
in thermal power fuel costs in the year ended March 31, 2012 (fiscal 2011). This caused ordinary expenses
(non-consolidated) to climb by roughly 20%, or around 300円.0 billion, compared to the average for the years
from fiscal 2008 to fiscal 2010. The increase was especially evident in costs for fuel and purchased power,
which rose by approximately 80%, lifting the percentage of ordinary expenses accounted for by these items
from 30% to 44%.
Maintenance costs in fiscal 2011 were largely unchanged from the previous fiscal year at 176円.0 billion.
Along with a review of the facility inspection and a maintenance checklist to enhance efficiency, we
responded to rising fuel costs and other items by minimizing the suspension, deferral and scale of mainte-
nance work performed. These and other efforts overcame the impact of measures needed for aging facili-
ties and other factors that have been driving higher costs.
Miscellaneous costs declined 3円.1 billion year on year to 152円.0 billion. Greater overall operational
efficiency was gained largely by means of reviewing systems development and the scope of subcontracting.
Additionally, costs were lowered through assertive efforts to minimize the suspension, deferral and scale of
costs, particularly for advertising promoting the spread and development of all-electric homes, subcontract
fees, and research and development activities.
Supplemental
Information
Comment from Stakeholders | "The mission of every power utility is to
stably supply safe and affordable power,
so I would like to see Kyushu Electric
Power work to cut costs further."
In response to the extremely difficult business environment, the Kyushu Electric Power Group will unite in making rigorous effi-
ciency improvements in management, and in reducing costs. In this section, we respond to comments from stakeholders who
want improved profitability from Kyushu Electric Power.
3. Advancing Our Emergency Management Response
16 Kyushu Electric Power Company Annual Report 2012Re:0
100.0
200.0
300.0
400.0
197.8
370.6
195.1
370.4
175.9
331.1
176.0
328.0
150.0
Around
300.0
172.8 175.3
155.2 152.0 150.0
’12
’11
’10
’09
’08 0
100.0
200.0
300.0
232.8
221.0
236.9
198.5
180.8
’12
’11
’10
’09
’08
Category Key Items and Reductions
Expenses Maintenance costs l
Cut or defer after evaluation of risk all items not related to safety or legal compliance, or that do not immediately
impact supply stability
(–35円.0 billion)
Miscellaneous costs,
otherslCut miscellaneous costs, including subcontract fees, research and development costs, electricity sales-related
expenses, advertising costs, training costs, donations, and industry-group membership feeslCut executive compensation, review benefit packages, and reduce overtime work and other personnel costslCut transportation costs, reduce fuel costs by expanding purchase of heavy oil from overseas and adopting use of
low-grade coal, and cut cost for power purchased from other companies
(–20円.0 billion)
Total costs –55円.0 billion
Investment Capital expenditures,
othersl
Cut or defer after evaluation of risk all items not related to safety or legal compliance, or that do not immediately
impact supply stabilitylFor other investments, defer all items not related to investment in upstream fuel interests, and make other efforts to
safeguard supply capabilities
Total investment –65円.0 billion
Total reductions –120円.0 billion
Overview of Fiscal 2012 Emergency Management Response
*Reduction represents the difference from the previous year’s plan
Maintenance and Miscellaneous Costs
Billions of Yen
Capital expenditures
Billions of Yen
Maintenance costs Miscellaneous costs
*Results for 2008 to 2011, plan for 2012
*Results for 2008 to 2011, plan for 2012
Difference from
prior year result
–28円.0 billion Difference from
prior year result
–18円.0 billion
(FY) (FY)
Today, operations remain suspended at all of Kyushu Electric
Power’s nuclear power stations. Furthermore, the timetable
for when operations will resume remains unclear. In this situa-
tion, several costs are nevertheless set to rise even further. In
addition to greater thermal power fuel costs, these include an
increase in the general dues payable to the Nuclear Damage
Facilitation Fund and costs for nuclear safety measures, as
well as higher interest charges accompanying an increase in
bank loans. Consequently, the conditions for profitability are
likely to become even more difficult going forward.
How We Are Answering | As an emergency management measure for
fiscal 2012, the Group is working to achieve a
120円 billion reduction in costs from last year’s
business plan.
In consideration of increasing costs, the Group will work
together to conduct sufficient risk analysis on expenses and
investments; ensure safety, compliance with laws and regula-
tions, and a stable power supply; and make thorough effi-
ciency improvements and cost reductions, including carrying
out short-term measures such as deferring expenses.
As an emergency management measure for fiscal 2012,
the Group has been working to effect a 120円 billion reduction
from last year’s business plan. We are both working steadily
to achieve this reduction and we are also examining emer-
gency management measures in more detail.
Annual Report 2012 Kyushu Electric Power Company 17