n Background to the Increasing of Electricity Rates
In response to the extremely tight power supply situation resulting from the shutdown of its nuclear power
stations, Kyushu Electric Power has taken all measures available to ensure a stable supply of electric
power, such as increasing thermal power generation and purchasing power from other utilities. However,
these measures have resulted in a considerable increase in fuel expenses and power purchasing costs,
leading to two consecutive years of significant losses since fiscal 2011.
The Company implemented an emergency management response which included cost-cutting and
net asset drawdowns, and did everything possible to keep electricity rates unchanged, but the Company’s
financial condition rapidly deteriorated to the point where concerns emerged about its ability to secure
financing, leaving us with no alternative but to increase electricity rates.
Increasing of Electricity Rates
Fiscal 2012
(Nuclear power
utilization rate: 0%)
Fiscal 2011
(Nuclear power
utilization rate: 31%)
Fiscal 2010
(Nuclear power
utilization rate: 81%)
1,340.0
Total expenses
Emergency Management Response*1
–24.0
Emergency Management Response*2
–78.0
Ordinary profit60.01,640.0 1,800.0
420.0
920.0
1,400.0
730.0 950.0
Ordinary loss
–340.0
910.0
1,410.0
850.0
1,460.001,000
2,000
Ordinary loss
–230.0
(Billions of Yen)
Changes in Revenues and Expenses
*1 Countermeasures amount including investment: 78円.0 billion
*2 Countermeasures amount including investment: 175円.0 billion
n Expenses other than fuel costs n Fuel costs n Revenues
End of fiscal 2012
End of fiscal 2011
End of fiscal 2010
Capital +
legal reserve
Accumulatedpastearnings, etc.
640.0
Reserve
funds, etc.
Capital, etc.
330.0
440.0
330.0
100.0
970.0
Total 770.0 430.0
330.00500
1,000
Changes in Equity
n Capital, etc. n Reserve funds, etc.
Kyushu Electric Power increased electricity rates based on the condition of needing to
ensure thorough management rationalization.
(Billions of Yen)
Formulation of
Midterm
Management Policy
n Basic Stance
n Major Initiatives
Increasing of
Electricity Ratesn Background to
the Increasing of
Electricity Rates
n Overview of the Increase
Initiatives for
Improving the Safety
and Security
of Nuclear Powern Overview of the New
Regulatory
Requirementsn Our Safety Precautions
in View of the New
Requirementsn Enhanced Framework
for Preventing Nuclear
Disasters and the
Performance of Drills
Section 1
Kyushu Electric
Power’s Summary
Section 2
Midterm
Management Policy
Section 4
Safety Measures for
Nuclear Power Plant
Section 5
Management Base
Section 6
Financial Section
Section 3
Increasing of
Electricity Rates
page 11
Kyushu Electric Power Company Annual Report 2013
Cost of Streamlining Factored into the Electricity Rates Costs
Item Fiscal 2013–2015 average Details of main initiatives
Depreciation
(capital expenditure)
–23円.0 billion • 
Review of design standards and specifications
• 
Suspend, defer and scale back construction work
Maintenance costs –32円.0 billion • 
Lengthening of inspection cycle
• 
Suspend, defer and scale back repair work
• 
Introduce and expand competitive orders at materials
procurement or issuing construction order
Personnel costs –48円.0 billion • 
Cut executive compensation and lower remuneration
standards
• 
Review benefit packages
• 
Lower employer’s proportion of health insurance costs
• 
Curb recruitment
Demand-supply related costs
(fuel costs, etc.)
–18円.0 billion • 
Reduce procurement costs for fuels such as LNG and coal
• 
Reduce costs for power purchases
Other costs
(miscellaneous costs, etc.)
–22円.0 billion • 
Review scope and details of subcontracting
• 
Suspend, defer and reduce costs, including expansion and
development expenses, group fees, and research and
development costs.
• 
Introduce and expand competitive orders at materials
procurement or issuing construction order
Total –140円.0 billion —
Initiatives to improve management efficiency
The current rates costs reflect the Company’s efforts to improve efficiency by reducing costs of
140円 billion. Looking ahead, Group companies will continue to rigorously work as one to improve
management efficiency.
Revenue shortfall
Fuel and purchased
power costs
Personnel costs
Maintenance costs
Depreciation
Business remuneration
Other (taxes and dues,
other business costs,
deduction income, etc.)Pre-revision
revenue04008001,200
1,600
602.8
108.4
1,466円.3 bn.
(17円.22/kWh)
1,345円.4 bn.
(15円.80/kWh)
120円.9 bn.
(1円.42/kWh)
191.1
176.288.0299.6
Approval cost Pre-revision revenue
n Overview of the Increase
Increase details
Increase date New unit price Former unit price Increase rate
Regulated area From May 2013 21円.14 19円.90 6.23%
Deregulated area From April 2013* 14円.49 12円.94 11.94%
*As regards the dates in the deregulated area, this will be done successively according to the contract expiry dates
Previous: A
(fiscal 2008)
Current: B
(fiscal 2013–2015)
Difference:
B–A
Electricity sold
billionkWh87.9 85.3 –2.6
Crude oil price $/b 93.0 105.9 12.9
Foreign
exchange rate
\/$ 107 79 –28
Nuclear power
utilization rate
% 83 55 –28
Business
remuneration rate
% 3.0 2.9 –0.1
Employees
requiring expenses
(including senior employees)
people 12,234 12,007 –227
Presupposed Factors
Difference Between the Approval
Cost and the Pre-revision Revenue
(Billions of Yen)
Formulation of
Midterm
Management Policy
n Basic Stance
n Major Initiatives
Increasing of
Electricity Ratesn Background to
the Increasing of
Electricity Rates
n Overview of the Increase
Initiatives for
Improving the Safety
and Security
of Nuclear Powern Overview of the New
Regulatory
Requirementsn Our Safety Precautions
in View of the New
Requirementsn Enhanced Framework
for Preventing Nuclear
Disasters and the
Performance of Drills
Section 1
Kyushu Electric
Power’s Summary
Section 2
Midterm
Management Policy
Section 4
Safety Measures for
Nuclear Power Plant
Section 5
Management Base
Section 6
Financial Section
Section 3
Increasing of
Electricity Rates
page 12
Kyushu Electric Power Company Annual Report 2013