In FY2015, we have made our utmost efforts to further improve efficiency including active utilization of Japan Electric Power Exchange to which excess power is sold in off-peak period, in addition to use of coal-fired power stations with less generation cost to the maximum extent possible through rescheduling of periodic inspection and reduction of work period through inspection work on a 24/7 basis at coal-fired power stations.
In FY2016, with an eye on increased competition following the full liberalization of the retail electricity market, we strive to reduce material procurement prices by 7% for achieving cost reduction of 7 billion yen, based on managerial efficiency improvement.
|Main cost reduction items|
|Measures for cutting costs including personnel expenses, miscellaneous costs, etc.||- Reduction of personnel expenses by streamlining operations|
- Increased utilization of low ash content, low cost coals (from Indonesia, Russia, etc.)
- Reduction of materials & equipment procurement prices with greater adoption of competitive bidding
- Reduction of miscellaneous costs by clearly prioritize measures and actions to be taken
|Streamlining processes and contents of periodic inspection at thermal power stations||- Reduction of fuel costs by reviewing processes and contents of periodic inspection|
|Measures for realizing efficient power supply/demand control||- Sale of electricity to Japan Electric Power Exchange with utilization of excessive supply capability|
- Power supply/demand control in an economically efficient manner according to their changes
While the costs related to power supply/demand (fuel cost, power purchase cost, etc.) became large in terms of both amount and component ratio, ordinary expenses excluding the costs related to power supply/demand decreased by 11% from FY2000, thanks to the efforts to streamline management and operations to date.
While making efforts for establishment and renewal of power generation facilities for stable electricity supply including the safety improvement work at Unit 2 of Shika Nuclear Power Station and construction work for LNG-fired Unit 1 of Toyama Shinko Thermal Power Station with putting highest priority on safety, we have striven to reduce capital investment amount through the detailed review of work and reduction of material procurement prices. Also, our fixed assets for electricity business decreased by 32% from the level of FY2005 when Unit 2 of Shika Nuclear Power Station started commercial operation, thanks to the effort for reduction of capital investment cost based on the safety-first principle.
For stable supply of electricity, secure procurement of materials & equipment and economic efficiency, we have employed an optimum procurement method for each item to lower the cost.
For the purpose of reducing our materials & equipment procurement cost to make use of economy of scale, Hokkaido Electric Power Company, Shikoku Electric Power Company and our company started joint procurement of smart meters from FY2016.