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					The Electric Power Development Company, Ltd.
1. Summary of operations implemented using FILP funds
In order to secure the capability of providing electric power and develop a power distributing system as demanded by the energy policy of the state, the Company has been working to develop large hydroelectric power stations, large pumped storage power stations and coal thermal power stations, geothermal power stations and a large-area power transmitting system. The Company is currently developing high-efficiency coal thermal power stations and the Oma Nuclear Power Station and so on which will contribute to the optimal structuring of electric power resources in our country.
Note: Other operations not using FILP include overseas technical service specified in Clause 2, Article 23 of the Electric Power Development Promotion Law.

2. Amount of lending under FY 2001 FILP

3. Outcome and social and economic benefits of operations
The company has been developing power resources, substations and power transmitting facilities since its establishment in 1952. Its power generating facilities accounts for around 7% (Note 1) of the total facilities held by the electric companies of our country and the quantity of power it generates accounts for 5% (Note 2) of the total quantity of power generated by them, thus greatly contributing to securing the providing capability our country requires. The Company intends to continue contributing to securing the amount of electric power our country requires. It is currently implementing the expansion works of the Okutadami Power Station and the Otori Power Station for hydroelectric power, development works of the Isogo Coal Thermal Power Station No. 1 and the Oma Nuclear Power Station. Furthermore, the Company has been developing a frequencyconverter station that can connect the 50 Hz area and the 60 Hz area and a large-area power transmitting system which will link the areas of Hokkaido, Shikoku and Kyushu to Honshu, playing a part in providing a stable supply of electric power.
Note 1: Percentage of the total equipment held by the ten commercial electric power companies plus the EPDC as of the end of FY 1999. Note 2: Percentage of the total quantity of power generated by the ten commercial electric power companies plus the EPDC as of the end of FY 1999.

4. Estimated policy (subsidy) cost of the project
Outline of estimate 1) An estimate has been made for the total operations of the Company. 2) An analysis has been made for the 12-year period during which FILP funds are to be redeemed. Future revenues from electricity sales have been calculated based on the expected quantities of electric power sales by the individual facilities and expected charges. Based on the analysis assumptions above, calculation of the subsidies required to carry out the operations and of corporate taxes and dividends on the investment expected to be paid to the national treasury has been made. Since a cabinet decision has been made with respect to the privatization of the Company, the capital investment from the national treasury is supposed to be returned by the sale of the Company’s stock that the government holds.

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Policy (subsidy) cost — (Analysis period: 12 years)

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(Reference) Budgeted amount of subsidies and capital investment in FY 2001 Subsidies: ¥1.9 billion Capital investment: —

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5. Projections in the analysis
Added to the utility power stations, transmission and substation facilities, as of the end of 2000, the Company is proceeding with the development of 13 power stations with a total capacity of 7,550 MW (9 hydroelectric power stations, 3 thermal power stations and 1 nuclear power station with total capacity of 3,945 MW, 2,220 MW and 1,383 MW respectively) and 1 transmission line. The Isogo Coal Thermal Power Station No. 1 (with a generating capability of 600 MW) will start operation in FY 2002, and the Okutadami Power Station (expanded by 200 MW) and the Otori Power Station (expanded by 87 MW) will start operation in FY 2003. The other facilities are planned to start operation according to their individual schedules. Equipment investment required for the developments above from FY 2001 to FY 2012, the final year of this analysis, is expected to be approximately ¥1.97 trillion. Calculation has been made based on the assumption that around ¥1.83 trillion of the amount above will be financed using public bonds that the Company issues and borrowings from commercial banks.

6. Reasons for granting of subsidies, mechanism and underlying laws
From the Special Accounts for Electric Power Development Acceleration Measures, the Company receives grants and subsidies for developing hydroelectric and nuclear power generation which will contribute to the diversification of electric power resources and for bearing a part of the cost of construction for improving the operating economy of small and medium-size hydroelectric power stations, as well as for bearing a part of the cost of developing technology for a full MOX (mixture of oxidized uranium and plutonium) fuel feeding nuclear reactor. Based on the Corporate Tax Law and the Commercial Code, the Company pays corporate tax and dividends on capital investment from the national treasury. (Underlying laws and regulations) The Company receives the grants and subsidies mentioned above based on the provisions of the law and enforcement ordinance shown below. ❍ Grants for the Electric Power Development Company Ltd. (for providing subsidies for the construction of small and medium-size power stations) Item. 4, Clause 3, Article 1 of the Law on Special Accounts for Electric Power Development Acceleration Measures Subsidies specified by the ordinance and covered by the budget for building or modifying power-generating facilities or facilities closely connected to them, which is required for the diversification of electric power resources Item. 2, Clause 5, Article 1 of the Enforcement Ordinance of the Law above Granting of subsidies or grants concerning expenses required to build or modify hydroelectric power-generating facilities ❍ Subsidies for developing technology for a whole-furnace-core mixed-oxide-fuel-feeding nuclear reactor Item. 5, Clause 3, Article 1 of the Law on Special Accounts for Electric Power Development Acceleration Measures Subsidies specified by the ordinance and covered by the budget for developing technology for promoting the building or modification of power-generating facilities or facilities closely connected to them, which is required for the diversification of electric power resources Item. 2, Clause 6, Article 1 of the Enforcement Ordinance of the Law above Granting of subsidies or grants concerning expenses required to develop technology for improving commercial electric-power generating nuclear reactors (excluding those provided for in Item. 6)

7. Special remarks
1) The cabinet decision of June 6, 1997 specifies that the Company “shall be privatized after about five years for adjustments. At the time of privatization, the government shall take such measures as strengthening of the Company’s financial base using FILP funds, sale of its stocks held by the nine electric power companies and so on.” Although the sale of the stocks held by the state is factored in to redeeming the capital investments from the national treasury, calculation of the sale price of the stock is based on certain assumptions. Policy costs will fall or rise depending on the changes in the sale price. In the present analysis, policy costs will increase by ¥14.1 billion if the sale price decreases by 10%.

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The Electric Power Development Company, Ltd.

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Financial Statements

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The Electric Power Development Company, Ltd.

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Financial Statements

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