Changes to Electricity System Reform, Environmental Regulations and Other Areas

「In light of the review of the wheeling charges of 北海道電力ネットワーク株式会社, a general transmission and distribution operator, effective 1 November 2026, we will reflect the change in wheeling charges in regulated rates. We hereby announce that today we filed a notification with the Minister of Economy, Trade and Industry regarding changes to the specified retail supply terms and conditions.」

「These system measures have reduced operators' risks, but if the system is reviewed, operating performance could be affected.」

「Revenue in the 北海道電力ネットワーク segment increased by ¥1.7 billion from the previous fiscal year to ¥322.9 billion, mainly due to higher wheeling revenue resulting from the review of wheeling charges and increased regional demand caused by high summer temperatures.」

「As a result, during the current interim consolidated accounting period, the company withdrew ¥21,717 million in assets equivalent to asset retirement obligations and ¥21,717 million in asset retirement obligations.」

「On 1 April 2024, the Act Partially Amending the Electricity Business Act and Other Acts to Establish an Electricity Supply System to Achieve a Decarbonized Society (Act No. 44 of 2023, hereinafter the “Amended Act”) and the Ministerial Ordinance on the Development of Relevant Ministerial Ordinances Following the Enforcement of the Act Partially Amending the Electricity Business Act and Other Acts to Establish an Electricity Supply System to Achieve a Decarbonized Society (Ordinance of the Ministry of Economy, Trade and Industry No. 21 of 29 March 2024) entered into force. As a result, the decommissioning ordinance was repealed and the Ordinance on Accounting for the Electric Power Business was amended.」

「Revenue for the current third-quarter cumulative consolidated period was ¥226,675 million, down ¥29,667 million, or 11.6%, from the same period of the previous year. Although revenue increased following the revision of wheeling charges accompanying the introduction of the revenue cap system, electricity sales to other companies decreased as wholesale electricity market prices declined.」

「Revenue for the current first-quarter cumulative consolidated period was ¥74,300 million, down ¥1,105 million, or 1.5%, from the same period of the previous year. Although revenue increased following the revision of wheeling charges accompanying the introduction of the revenue cap system and electricity charges increased due to last-resort supply, these increases were offset by a decrease in electricity sales to other companies as market prices declined.」

「Under the renewable energy feed-in tariff system (hereinafter, the “FIT system”), the company had recognized renewable energy surcharges collected from customers as revenue and payments under the Renewable Energy Special Measures Act made to the cost burden adjustment organization as operating expenses. It had also recognized FIT-based renewable energy purchase costs as purchased power costs, while receiving from the cost burden adjustment organization, and recognizing as revenue, grants under the Renewable Energy Special Measures Act corresponding to increases in the portion of the purchase costs borne by the company. However, following the application of the revenue recognition accounting standard and other standards, the Ministerial Ordinance Partially Amending the Ordinance on Accounting for the Electric Power Business and Other Regulations (Ordinance of the Ministry of Economy, Trade and Industry No. 22 of 2021) entered into force on 1 April 2021, and the Ordinance on Accounting for the Electric Power Business (Ordinance of the Ministry of International Trade and Industry No. 57 of 15 June 1965) was amended. Accordingly, the FIT system is no longer included in revenue or expenses.」

「Changes in national systems affecting the electric power business, including the development of markets and rules to further promote competition under electricity system reform, could affect operating performance.」

「On 1 April 2018, the Ministerial Ordinance Partially Amending the Ministerial Ordinance on the Provision for Decommissioning Nuclear Power Facilities and Other Regulations (Ordinance of the Ministry of Economy, Trade and Industry No. 17 of 2018) entered into force, amending the Ministerial Ordinance on the Provision for Decommissioning Nuclear Power Facilities. Accordingly, since that date, the company has changed its method of recognizing expenses to a straight-line method over the expected operating period.」

「Changes in systems affecting the company's business, including the development of markets and rules to further promote competition under electricity system reform, detailed institutional design for the unbundling of power generation and transmission, the introduction of measures to achieve the energy mix, and environmental regulations relating to global warming, could affect operating performance.」

「Because the Amended Act and Amended Ordinance entered into force on 1 October 2016 and the Ordinance on Accounting for the Electric Power Business was amended, contributions prescribed in Article 4, paragraph 1 of the Amended Act have been recognized as operating expenses since that date, based on the amount of spent fuel generated in connection with the operation of nuclear power plants.」

「Accordingly, during the current third quarter, the company offset and withdrew the ¥44,364 million reserve for spent fuel reprocessing and related activities included in investments and other assets against the ¥45,975 million provision for spent fuel reprocessing and related activities. The difference and the ¥9,389 million reserve for spent fuel reprocessing and related activities were reclassified as ¥751 million to other fixed liabilities, ¥9,414 million to fixed liabilities due within one year and ¥834 million to other current liabilities, respectively.」

「On 1 October 2016, the Act Partially Amending the Act on the Accumulation and Management of Reserves for the Reprocessing of Spent Fuel from Nuclear Power Generation (Act No. 40 of 2016, hereinafter the “Amended Act”) and the Ministerial Ordinance Partially Amending the Ordinance on Accounting for the Electric Power Business and Other Regulations (Ordinance of the Ministry of Economy, Trade and Industry No. 94 of 2016, hereinafter the “Amended Ordinance”) entered into force, and the Ordinance on Accounting for the Electric Power Business was amended.」

「On 1 April 2016, the new Ministerial Ordinance on the Reserve for Drought Preparedness (Ordinance of the Ministry of Economy, Trade and Industry No. 53 of 2016) entered into force. As a result, the amounts transferred to or withdrawn from the reserve and the reserve limit were changed to amounts calculated by multiplying the amounts calculated under the previous method by the specific retail supply ratio, which is the amount of electricity sold under specified retail supply divided by the amount of electricity sold in the electric power business. As a result of this change, the amount transferred to the reserve for drought preparedness at the end of the current first-quarter consolidated accounting period decreased by ¥1,037 million compared with the previous method, while profit before income taxes and other adjustments for the current first-quarter cumulative consolidated period increased by the same amount.」

「Changes in energy policy, including detailed institutional design for the unbundling of power generation and transmission, and changes in environmental regulations relating to global warming could affect operating performance.」