Hokkaido Electric Power Incorporated : Overview of the FY2024 HEPCO Group Management Plan

Overview of the FY2024

HEPCO Group Management Plan

April 27, 2023

Hokkaido Electric Power Co., Inc.

■ Contents

Introduction	・・・2
1.	HEPCO Business Conditions	・・・4
2.	Major Initiatives for FY2024
	(1)	Initiatives for Business Efficiency	・・・11
	(2)	Initiatives to Reduce the Burden of Electricity Rates	・・・17
	(3) The Early Restart and Improved Safety of Tomari	・・・21
Nuclear Power Station
	(4)	Ensuring the Stable Supply of Energy	・・・24
	(5)	Initiatives to Expand Business Areas	・・・29
	(6)	ESG Initiatives	・・・37
3.	Progress of the HEPCO Group Management Vision 2030	・・・43
List of Group Companies	・・・47

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■ Introduction

We would like to take this opportunity to express our gratitude for your continued support of the HEPCO Group.

FY2023 saw a continuation in the cost of supplying electricity greatly exceeding revenue from electricity rates due to the soaring fuel and wholesale electricity market prices. As a result, there was a substantial deterioration in our company's financial performance and situation. We decided to increase electricity rates to achieve sound management and to ensure a stable supply of electricity through the regular procurement of fuel and the maintenance of power facilities. We sincerely apologize for the additional burden we must ask our customers to bear amidst the challenging economic conditions.

We will strive to provide easy-to-understand and detailed explanations regarding electricity rate increases. We are also focusing on services that will reduce this burden, such as energy-saving assessments and ZEB consulting. Also, in applying to increase regulatory rates, we will further enhance business efficiency in addition to business-efficiency initiatives implemented to date. We have decided to implement 65 billion JPY worth of efficiency improvements.

We will improve our financial situation by implementing these initiatives and aim for a rapid recovery in our financial soundness.

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■ Introduction

Regarding the Tomari Nuclear Power Station, we received the evaluation of "in general, adequate investigations are being conducted" for "assessment of seismic motion formulated without an identified

hypocenter" in reviews of compliance with new regulatory standards in October last year. We will continue to make every effort to address the remaining review items to bring about an early restart. We will also actively communicate the status of reviews and initiatives.

Recently, we have been significantly expanding business opportunities and areas. This includes our response to a world-leadinglarge-scale semiconductor manufacturing plant planned to be built in Hokkaido and companies related to the project, attracting companies such as data centers from outside Hokkaido and addressing the expansion of renewable energy sources, such as offshore wind power. While ensuring a stable supply of electricity, we will bring about sustainable growth by solving issues such as carbon neutrality and co-creation with communities by enhancing the comprehensive capabilities of the HEPCO Group. As such, we will continue to fulfill our unchanged mission of supporting Hokkaido's economy and the lives of our customers.

In light of incidents that have compromised the neutrality of general transmission and distribution operators in the electric power industry, we will further strengthen compliance in all aspects of our business.

We ask for your continued understanding and support for the business operations of the HEPCO Group.

April 2023

Hokkaido Electric Power Co., Inc.

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• 1. HEPCO Business Conditions

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