東北電力（9506） – Financial Summary 3rd Quarter of FY2021

Financial Summary3rd Quarter of FY2021( April 1, 2021 – December 31, 2021)January 31, 2022Tohoku Electric Power Co., Inc.Contents3rd Quarter of FY2021 Financial ResultsKey points of financial results and forecastsSummary of Financial ResultsChanging Factors in Consolidated Ordinary IncomeElectricity SalesElectricity Supply and Major FactorsSegment Information (Consolidated)Financial and Dividend Forecasts for FY2021Status of Progress in Highlights of FY2021 Medium-term PlanHighlights of FY2021 Tohoku Electric Power Group’s Medium- term PlanHighlight 1. ChangeMajor efforts and progress- Making Steady Efforts to Restart Nuclear Power Reactors- List of Major Renewable Energy Development/Participation Points of Our GroupHighlight 2. ChallengeMajor efforts and progressHighlight 3. CreateMajor efforts and progress- Efforts toward carbon neutrality ReferencesFinancial DataOther Reference Data・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・12345671011121416212225313rd Quarter of FY2021Financial Results1Key points of financial results and forecastsFinancial Results for the 3rd Quarter of FY2021 Operating revenue : Impact of the adoption of Accounting Standard for Revenue Recognition Ordinary Income : Impact the time lag between fuel cost and fuel cost adjustment charges and supply and demand due to the earthquake off the coast of Fukushima PrefectureFinancial and Dividend Forecasts for FY2021 Increase of ¥170.0 billion from the previous forecasts due to an increase of fuel cost adjustment charges Decrease of ¥85.0 billion from the previous forecasts due to the expanded impact of the time lag between fuel cost and fuel cost adjustment charges and the increased procurement costsSummary of Financial Results2Operating revenue¥1,398.9 billion (a year on year decrease of ¥142.5 billion)Operating revenue decreased due to the impact of the adoption of Accounting Standard forRevenue Recognition.Ordinary income¥10.3 billion (a year on year decrease of ¥65.3 billion)Ordinary income decreased due to temporary factors such as an impact of the time lag betweenfuel cost and fuel cost adjustment charges caused by soaring fuel prices and the shutdown ofthermal power stations damaged by the earthquake off the coast of Fukushima Prefecture.【Summary of Consolidated Financial Statements】FY2021/3Q(A)FY2020/3Q(B)Change(A) －(B)Operating Revenue*1Ordinary Income*1Net Income Attributable to Owners of Parent[[1,398.91,398.910.385.32.4]][[1,541.41,209.075.740.750.6]][[Consolidated Cash Income233.2224.4(142.5)189.8 ](65.3)44.6 ][[(48.2)8.7(billions of yen)Change(A) / (B)90.8 %115.7 %]13.7 %209.7 %]4.8 %103.9 %*1 Lower figures of operating revenue are based on Accounting Standard for Revenue Recognition. Grant under act on purchase of renewable energy sourced electricity and surcharge for promoting renewable energy sourced electricity based on Feed-in Tariff Scheme for renewable energy, which were previously recorded as operating revenue, will no longer be recorded.Those of ordinary income exclude time lag between fuel cost and fuel cost adjustment charges.*2 Consolidate Cash Income = Operating income + Depreciation + Amortization of nuclear fuel + Share of profit of entities accounted for using equity method(Operating income doesn’t include time lag between fuel cost and fuel cost adjustment charges.)Changing Factors in Consolidated Ordinary Income from the Corresponding Period Last Year3Decrease of 65.3 Billion Yen (75.7 → 10.3)(billions of yen)Time lag between fuel cost and fuel cost adjustment charges22.8Others-110.0-1.3Decrease in the volume of retail electricity sales -9.3Impact of supply and demand due to the earthquake off the coast of Fukushima Prefecture32.5Change in depreciation method75.7• Reaction to last year’s impact of COVID-19• Impact of temperature5.7-7.0• Increase in operation of Haramachi thermal and hydroelectric power station• Decrease in retirement benefit expenses• Decrease in retirement expenses• Decrease in repair expenses6.46.23.12.6Impact excluding Time lag between fuel cost and fuel cost adjustment charges：increase of about 44.6 billion yenFY2020/3QOrdinary income excluding time lag between fuel cost and fuel cost adjustment charges 40.710.3FY2021/3QOrdinary income excluding time lag between fuel cost and fuel cost adjustment charges 85.3Electricity SalesRetail electricity sales47.5 TWh (a year on year increase 1.1 TWh)Retail electricity sales volume increased due to an increase in operations for commercial and industrial use as a reaction to the impact of last year’s COVID-19.Wholesale electricity sales 12.3 TWh (a year on year decrease 0.4 TWh)Wholesale electricity sales volume decreased due to a decrease in JEPX transaction resulting from the shutdown of thermal power stations damaged by the earthquake off the coast of Fukushima Prefecture.4(GWh)Electricity Sales*1FY2021/3Q(A)FY2020/3Q(B)Change(A) – (B)Change(A) / (B)Lighting (Residential)13,60714,377(770)94.6 %Power33,86732,0101,857105.8 %Retail Electricity Sales*247,47446,3871,087102.3 %Wholesale Electricity Sales*312,25012,643(393)96.9 %Total of Electricity Sales59,72559,030695101.2 %*1 Individual figures of Tohoku Electric Power Co., Inc., excluding network business.*2 Retail Electricity Sales includes electric power for business use.*3 Wholesale Electricity Sales includes the volume of specified power interchange. Electricity Supply and Major FactorsFY2021/3Q(A)FY2020/3Q(B)Change(A) – (B)Change(A) / (B)Electricity Supply*1Own Generated Power*2HydroThermalNuclearRenewablesPower Interchanges and Purchased Power*3,4Used at Pumped Storage and othersTotal of Electricity Supply*344,2116,17837,599-43422,408(3,497)(190)62,932Major FactorsCrude Oil CIF Price ($/bbl.)Exchange Rate (¥/$)Hydro Power Flow Rate (%)Nuclear Power Utilization Rate (%)43,4065,78637,092-52823,924(4,832)(59)62,43974.011096.2-805392507-(94)(1,516)1,335(131)49339.110590.1-*1 Individual figures of Tohoku Electric Power Co., Inc., excluding network business.*2 “Own Generated Power” shows sending end (electric power generated by the generator minus the electric power used in the power station).*3 “Power Interchanges and Purchased Power” and “Total of Electricity Supply” partly include projected volume.*4 As for “Power Interchanges and Purchased Power”, the top is Received and the bottom is Transmitted.FY2021/3Q(A)FY2020/3Q(B)Change(A) – (B)5(GWh)101.9 %106.8 %101.4 %-82.1 %93.7 %72.4 %320.1 %100.8 %34.956.1-Segment Information (Consolidated)6FY2021/3Q（Ａ）FY2020/3Q（Ｂ）Change（Ａ）－（Ｂ）FY2021/3Q（Ａ）FY2020/3Q（Ｂ）Change（Ａ）－（Ｂ）(billions of yen)75.7(65.3)57.5(59.1)13.3(0.0)1.74.45.112.33.2(0.8)0.7(0.2)Segment Income(Ordinary Income)Power Generation and SalesNetworkConstructionGasITOthers10.3(1.5)25.63.10.85.24.9Operating Revenue*Power Generation and SalesNetworkConstructionGasITOthers1,398.91,541.4(142.5)1,057.61,000.51,212.4(154.8)1,168.3(167.7)513.6216.6197.2112.731.126.033.714.481.328.4520.5223.6172.990.923.918.535.413.685.726.4(6.8)(6.9)24.321.87.27.5(1.6)0.8(4.3)2.0(6.3)-Adjustment(515.9)(509.5)–* Lower figures of operating revenue and each segment are sales to outside customers.Adjustment(27.7)(6.3)(21.4)Financial and Dividend Forecasts for FY2021 (1/2)7Operating revenueOrdinary income¥1,980.0 billion(increase of ¥170.0 billion compared to the previous forecast)Operating revenue increased due to an increase of fuel cost adjustment charges caused bysoaring fuel prices.-¥50.0 billion(decrease of ¥85.0 billion compared to the previous forecast)Ordinary income decreased due to the expanded impact of the time lag between fuel cost andfuel cost adjustment charges caused by soaring fuel prices and the increased procurementcosts resulting from JEPX prices increase.■ Consolidated Financial Forecasts for FY2021Forecast(new)(A)Previous Forecast(July 2021)(B)Change(A)-(B)Operating RevenueOperating Income Ordinary IncomeNet Income Attributable to Owners of ParentConsolidated Cash Income■ Major Factors1,980.0(28.0)(50.0)(45.0)245.01,810.052.035.023.0274.0*1 Operating Revenue is calculated by applying “Accounting Standard for Revenue Recognition.”Electric power sales*2（TWh）RetailWholesaleTotalCrude Oil CIF Price ($/bbl.)Exchange Rate (¥/$)Nuclear Power Utilization Rate (%)Forecast(new)(A)Approx. 66.5Approx. 16.7Approx. 83.2Approx. 74Approx. 112－Approx. 65.5Approx. 15.3Approx. 80.8Approx. 71Approx. 110－66.0 16.6 82.543.4 106－*2 Individual figures of Tohoku Electric Power Co., Inc., excluding network business.Previous Forecast(July 2021)(B)FY2020Crude Oil CIF Price (per $1/bbl.)Approx. 23■ Sensitivity to Major FactorsExchange Rate (per ¥1/$)Approx. 38(billions of yen)FY2020*11,867.987.967.529.3302.3170.0(80.0)(85.0)(68.0)(29.0)Financial and Dividend Forecasts for FY2021 (2/2)8■Changing factor of consolidated ordinary income (compared to the previous forecast)Decrease of 85.0 Billion Yen (35.0 → -50.0)• Impact of the shutdown of Nakoso Unit No.8• Mitigating the impact of the earthquake off -7.0the coast of Fukushima Prefecture by early restoration5.7(billions of yen)35.03.5Increase in the volume of retail electricity sales -27.0Impact of JEPX prices increaseOthers-8.5Time lag between fuel cost and fuel cost adjustment charges-53.0-50.0Forecast(new)Ordinary income excluding time lag between fuel cost and fuel cost adjustment charges 42.0Impact excluding Time lag between fuel cost and fuel cost adjustment charges：decrease of about 32.0 billion yenPrevious Forecast (July 2021)Ordinary income excluding time lag between fuel cost and fuel cost adjustment charges 74.0■ Dividend Per ShareYear-end dividend has been revised from 20 yen to undecided.(yen)InterimYear-endAnnualDividend Per Share20UndecidedUndecidedStatus of Progress in Highlights of FY2021 Medium-term PlanHighlights of FY2021 Tohoku Electric Power Group’s Medium- term Plan10“Change”Thorough enhancement of competitiveness through drastic reforms to our power supply business“Challenge”Attempt to quickly achieve profitability with our smart society building business“Create”Evolve our management base, which supports the creation of our corporate value We will accelerate the speed of a structural reform of the power supply business while thoroughly strengthening electric power sales and digging deeper into cost reductions. While doing our utmost to restart the nuclear power stations with safety as the first priority, we will proactively provide information for local residents and carefully conduct activities to gain their understanding. Under the leadership of Tohoku EPCO Frontier Co., Inc., the entire Tohoku Electric Power Group will aggressively take on and quickly achieve profitability with our smart society building business. We will continue to research the ideal for achieving carbon neutrality by 2050 and contributing to the reduction of CO2 emissions on the customer sideMajor efforts and progress11 We will endeavor to thoroughly strengthen current power sales to secure sustainable profits and reduce costs. We will shift to a business model for the maximization of profits by enhancing competitiveness and stable operation of facilities based on the mission of each function of the power supply business.Power generation and wholesaleNuclear power generation （See slide 12.）Onagawa Unit 2Efforts in the “Highlights”Restart operations quickly by the following measures: conducting construction work for safety, succession of technical skills required for operation and exerting efforts for enhancing abilities to respond to new equipment.Higashidori Unit 1Respond to the conformity assessment for restarting while conductingconstruction work for safety measures.Onagawa Unit 3Proceed with the consideration for the application for conformity assessment.Thermal Power GenerationEfforts in the “Highlights”Promote development of Joetsu Unit 1 (LNG : 572MW)Replacement of aged thermal power plants withlow environmental and economic efficiencyStatus of efforts (as of January) Construction work on safety measures are being implemented according to the plan. Education and training menu is being enhanced for technological succession and mastery of new equipment. Approval for construction plan (December) Application for approval of license amendment of facilities for dealing with serious accidents such as intentional aircraft collisions (January) Currently, the review of the assessment of earthquake and tsunami is underway.Same as leftStatus of efforts (as of January) Under construction to start commercial operation in December 2022(90% progress rate of construction works) Higashi Niigata Port Units 1 and 2: Long-term plan to be suspended (March 2021) Akita Unit 4 taken out of operation (March 2023)Making Steady Efforts to Restart Nuclear Power Reactors12We steadily implemented initiatives to improve safety while obtaining the understanding of the local communities. Onagawa Nuclear Power StationConformity assessment1.Permission for application for approval of license amendment (February 26, 2020)2.Approval for construction plan (December 23, 2021)3.The application for approval of safety regulations is currently being prepared for amendment.Construction work on safety measuresCurrently, additional ground improvement work for seawalls, installation of venting equipment for containment vessels with filters and earthquake resistant construction are underway with the aim of completing the work in FY2022.Sea wall 29m above sea level Higashidori Nuclear Power StationConformity assessmentCurrently, the review of the assessment of earthquake and tsunami is underway.To formulate the standard ground motion for seismic design, the identification of epicenter is being evaluated.Construction work on safety measuresCurrently earthquake resistant construction and installation of venting equipment for containment vessels with filters and emergency response facilities are underway with the aim of completing the work in FY2024.HigashidoriassessmentConformity ①Assessment on application for approval of license amendment (Basic Policy and Basic Design)Assessment of power stations (facilities)Assessment on earthquake and tsunamiPermssonii②Assessment on application for approval of construction plan (Detailed Design)③Assessment on application for approval of safety regulations(Necessary measures for security)Panoramic view of the power stationOnagawaResumption(After construction)for startupPreparationSupplementaryApplicationApprovalPre-operationtestSupplementaryApplicationApproval■Construction work on safety measures (Reflecting findings and assessments from conformity assessment)Completion of Construction■Activities to obtain the understanding of local communities(Clear and detailed explanation of the necessity of nuclear power stations and safety measures taken)Major efforts and progress13Power generation and wholesaleRenewable energy （See slide 14.）Efforts in the “Highlights”Putting wind power as a major power source and aiming to develop 2 million kW mainly in Tohoku Region and Niigata prefecture.Status of efforts (as of January) Currently, we are investing in 27 development projects. If all of the projects are commercialized, the equity output will be approximately 600MW.Accelerating our studies to establish a new company conducting the operation and maintenance (O&M) business. Tohoku Electric Power Renewable Energy Service Co., Inc., established to handle renewable energy O&M business. (April)Fuel procurement and Electricity wholesaleEfforts in the “Highlights”[Fuel procurement] Reduction in fuel costs and securing fuel procurement flexibility by diversifying procurement methods.Status of efforts (as of January) Optimization of vessel allocation in long-term LNG contracts and effective use of short-term contracts in view of fuel market conditions[Fuel procurement] Proceed with the initiative to optimize value chains from fuel procurement to power generation and wholesale by making the most of the trading function of the market.[Wholesale] Study and promotion of strategic sales utilizing a diversified portfolio of power sources and services that contribute to the improvement of added value of electricity wholesale while making the most of the trading functions Implementation of integrated trading by Tohoku EPCO Energy Trading, including the use of electricity markets and fuel futures Conducting wholesale sales that meet customer needs even with limited supply capacity due to the earthquake off the coast of Fukushima PrefectureList of Major Renewable Energy Development/Participation Points of Our Group14Under constructionOffshoreWindOnshoreWindProject Name① Tsugaru Offshore Wind② Happo-Noshiro Offshore Wind③ Akita and Noshiro Port Offshore Wind④ Fukaura Wind⑤ Noshiro-Yamamoto Regional Wind⑥ Oritsumedake South 1 Wind⑦ Inaniwa Takko Wind⑧ Inaniwa Wind⑨ Shiroishi Kosugo Wind⑩ Southern Abukuma Wind⑪ Tabito Central Windfarm⑫ Inego-Toge Windfarm⑬ Miyagi Kami Windfarm⑭ Takko Wind (tentative name)⑮ Shimokita⑯ JRE Sakata ReplaceGeothermal ⑰ Kijiyama (tentative name)Hydroelectric⑱ Tamagawa No.2 Hydroelectric⑲ Naruse River⑳ Shin-KamimatsuzawaSolar ㉑ TsuhazeBiomass㉒ Chokai-Minami㉓ Niigata East PortOperation startedProject NameOnshoreWind❶ Windfarm Tsugaru❷ Shichinohe-Towada Wind❸ Tsuruoka Hachimoriyama WindSolar ❹ Miyagi Osato Solar Park（As of December 2021）ScheduledCommercialOperation DateAfter FY2028Approx.79.8MW(Max)After FY2027Approx.42MWApprox.75.6MW(Max)Approx.96MWApprox.27.5MW(Max)OutputApprox.480MWApprox.356MWApprox.140MWApprox.70MWApprox.100MWApprox.44MWApprox.100MWApprox.100MWApprox.38MWApprox.90MWApprox.54.6MW14.9MW14.6MW(Max)2.3MW(Max)9.4MW(Max)35MW52.9MW50MWOutput121.6MW30.5MW13.6MW37.5MWAfter FY20282022After FY2024After FY2023Jan. 2023After FY2025After FY2025After FY2024After FY2025After FY2027April 2024After FY2027After FY2027FY20262029Oct. 2022FY2034Nov. 2031March 2023Oct. 2024Oct. 2024Operation DateApril 2020Dec. 2021Nov. 2021Oct. 2021* These projects include surveys of potential developmentTotal output share 600 MW*Value in case of all commercialization❶ ⑳①④❷⑭⑮⑥⑦⑧②③⑤③⑰㉒⑯❸⑲⑬❹⑱⑫⑨㉓⑩⑪(Tsu, Mie)㉑Tsuhaze●:Wind ●:Hydroelectric ●Solar ●:Geothermal ●:BiomassMajor efforts and progress15Transmission and distributionStable supplyStrengthening resilience for stable supplyEfforts in the “Highlights”Status of efforts (as of January) Cooperation Agreement with NTT East (November) Signed a memorandum of understanding for mutual cooperation in the case of disaster with the Ninth Regional Coast Guard Headquarters (November)*All three agreements include Tohoku Electric Power Improving disaster response capabilities through regular drillsAutonomous management and further improvement of efficiencyEfforts in the “Highlights”Effective use of technology such as AI and IoT and the unified specification joint procurement of equipment, continuation of procurement reform initiatives and cost reduction through productivity improvementStatus of efforts (as of January) Decrease in construction costs through the use of drones Establish a business management system through the establishment of a kaizen promotion system and a drastic review of business processes to continuously improve efficiency and productivityPower network sophistication for building a smart societyEfforts in the “Highlights”Power network sophistication for building a smart societyStatus of efforts (as of January) An initiative in Sado Island to realize the optimal demand control which combines storage battery, internal combustion power energy, and Energy Management System (EMS) (October)Major efforts and progress16In smart society building business, with our mission to help customers enrich their lives to the maximum from the perspective of power retail sales, we will endeavor to quickly improve both customer satisfaction and environmental engagement and strengthen profitability by expanding services that focus on providing energy and services in the form of a total package.Establishment of a new company leading the smart society building businessEfforts in the “Highlights”Status of efforts (as of January)Establishment of Tohoku EPCO Frontier Co., Inc. Business Tie-up with Netflix (August) Launch of business, Simple Electricity with Netflix, and other new services (November)Services provided by Tohoku EPCO Frontier Co., Inc.Streaming service combined with electricitySubscription service of picture booksOnline shopping serviceof used cloths for childrenRental service for outdoor camping gearSimple Denki with Netflix(Japan’s first bundling of electricity and Netflix services)Selection of high-quality books translated into Japanese are chosen by World Library Personal’s professionals.Buying and selling used clothes for children online.In addition to must-have items for camping, those related with electricity are added.Major efforts and progress17Enhancing services for household customers and improving profitabilityEfforts in the “Highlights”Acceleration of the expansion of life support servicesStatus of efforts (as of January) Launched Yorisou Mimamori Denki, a service for watching over elderly people (September) Expansion of the service area for the “Support for living safe” housing equipment repair service (August) Launch of a set package plan for electricity and gas through a business alliance with Shiogama Gas (November)*Expanding the number of partnersPromote proposal of the electrification of an environmentally friendly and smart life Campaigns to replace Eco-Cute (until December)Enhance customer satisfaction by proposing a special pricing planApril) Campaigns such as a free basic fee for a certain period (fromReduction of CO2 emissions and environmental load through the Eco-living Project Proposal of CO2-Free Plan derived from renewable energy Shift to paperless notice of meter reading (from April) Support for the introduction of heat pump equipment (until December)Major efforts and progress18Strengthening capability of proposals for corporate customers and maximizing profits by expanding solutionsEfforts in the “Highlights”Proposals for optimal energy plans (electricity, gas, renewable energy) according to the status of customer needsEnhance and proactively propose energy solution services that involve the customer’s equipmentRelease and propose new business solution servicesStatus of efforts (as of January) Menu of power locally generated for local consumption using public hydraulic power stations Proactive proposal of our proprietary energy management system exEMS (continued) Solution services for retail businesses and farmers to achieve sustainable agriculture (November) Launch of the solution service introduction website (November) Lightning and Weather Risk Information Service to prevent lightning disasters (November) BCP, BPO, ICT-related support services (continued) Starting a trial run of platform for business users by our group (November)Solution service through “Indoor Farm system for creating and saving energy”Starting a trial run of platform for business usersIn collaboration with Plants Laboratory Inc., we combined energy management system “exEMS” that our company developed with energy-saving small-sized plants laboratory. Through this system, we will develop “sustainable agriculture from Tohoku”.Sustainable agriculturefrom TohokuConsumersRetailersLocal farmersSelling vegetablesSuggestionProducing vegetablesSuggestion& SupportSet cumulative sales target of 5 billion yenby FY2030 in energy-related serviceProviding cultivation systemSupport for cultivationProviding energy-related servicesContributing to the realizationof a smart society2030Under the “Yori sou Tohoku Connect”, which is designed for business users in Tohoku and Niigata prefecture and run by Tohoku Intelligent Telecommunication Co., Inc., businesses who have “problems” or “idea” can beconnected with those who have “solutions” on a digital space.Tohoku and Niigata prefectureAcross Japanand globallyTsunagaru (connect with)e-business meetingproblemsSolutionMatchingSolutionMatchingIdea and problemsTsunagaru (connect with) e-incubationTsunagaru (connect with)e-boardOur group’splatform forbusiness usersYori souConnectMajor efforts and progress19Commercialization of Virtual Power Plants (VPP)Status of efforts (as of January)Launch of some services including energy management Commencement of renewable energy aggregation Efforts in the “Highlights”demonstration experiment (December)Establishment of a new company that will offer a solar power generation and storage cell serviceEfforts in the “Highlights”Status of efforts (as of January)Establishment of Tohoku EPCO Solar e Charge Co., Inc. Conclusion of a business alliance agreement with a housing company for the sale of solar power generation and storage battery services (July) Launch of combined services for electricity and energy services using solar power generation and energy storage systems and expansion of this service to the Kanto area (November)＜Sales scheme in Kanto area＞Tohoku EPCO Solar e-Charge Co., Inc. “Aozora Charge Service” started its sales in Kanto region.In cooperation with Tokyu Power Supply, we began to expand “Aozora Charge Service” in Kanto region in November 2021, which had been deployed in Tohoku and Niigata prefecture since July 2021. “Aozora Charge Service” is designed for those who newly buy their homes. Solar power generation and storage battery systems are available by paying subscription fee per month without any initial costs.Tohoku Electric Solar e-ChargeTokyu Power SupplyCustomersProvision of servicesElectricity supplyService chargesElectricity chargesTohoku Electric Solar e-ChargeElectricity that is generated at home can be used.Tokyu Power SupplyTohoku Denki Electricity*In the Tohoku and Niigata areas, the service is bundled with electricity from Tohoku Electric Power FrontierMajor efforts and progress20Promotion of services that contribute to solving local issuesEfforts in the “Highlights”Contribution to converting the area into an economically and environmentally friendly town that is resistant to disasters by participation in projects that contribute to solving issues of local government and communities such as regional smart city and town management projectsStatus of efforts (as of January) Participation of Izumi Park Town 6th Residential Area East Construction Zone Development Project (solar power generation and storage battery services)Acceleration of creation of new business by open innovationEfforts in the “Highlights”Creation of new businesses and services through the collection and evaluation of business ideas from internal and external sourcesStatus of efforts (as of January) Adoption of business ideas from external companies and consideration of their commercialization (92 applications, 3 adopted)Results of Open Innovation ProgramsWe held a final examination council to select business entities in Open Innovation Program “TOHOKU EPCO BUSINESS BUILD” last December, and aim to jointly put these three business idea into practice.1 ONEDAYWORK CO.,LTD23 Women’s Kampo K.K.Mysurance Inc.DeNA SOMPO Carlife Inc.Sompo Japan Insurance Inc.Provide various work styles such as one-day work and shorter working hours through making use of a new method of recruitment.Create a new subscription service for living and vehicles that support those in the 20’s and 30’s and bring a little happiness to their lives.Services to promote an appropriate self-medication that make use of online pharmacists.Major efforts and progress21Promotion of initiatives for low carbonization and de-carbonization (See slide 22.)Efforts in the “Highlights”Status of efforts (as of January)The Tohoku Electric Power Group will proactively meet challenges to become a carbon neutral group by 2050. Tohoku Electric Power Group Carbon Neutral Challenge 2050 (March) Release of CO2 reduction targets for FY2030 and specific initiatives to achieve carbon neutrality (July)EnvironmentSocialEstablishing new work styles and work style reforms in the post-pandemic eraEfforts in the “Highlights”Status of efforts (as of January)Practice workstyle reforms through the transformation of awareness and action and post-pandemic new work style Steady practice of working from home and going directly to the worksite Promote more efficient ways of working by using digital technologies such as online meetingsPromotion of diversityEfforts in the “Highlights”Create a workplace where diverse human resources can demonstrate their abilities to the maximumStatus of efforts (as of January) Message on diversity from top management (August) Human rights seminars on LGBT issues (November), information exchange among women managers in the Group (January)Efforts toward carbon neutralityRoadmap to 2030 and 205020302050Appropriate governance for carbon neutralityMaking the mostuse of renewableenergy and nuclearpowerRenewable energyNuclearpower Power gridAchieving to develop 2 million kWin the early 2030s.Further expansionEarly resumption of operations andimprovement of operating rateNetwork improvement by reducing the cost tomaximize the utilization of renewable energy(Enhancing the system by digitalizing power grid, storage battery to install excessive renewable energy, P2G, and others) Main EffortsOnagawa nuclear power stationHigashidori nuclear power station22Shin-Noshiro wind power stationSwift operation resumption ofnuclear power stationmaximizing the use of renewable energyNiigata thermal power station (LNG)Noshiro thermal power station (coal)12Decarbonization ofthermal powerLNG: Decarbonization through the use of hydrogen and ammoniaFSTestImplementation studyOperation（Expansion of co-firing ratio and consideration of single-firing）Coal: Decarbonization through the use of biomass and ammoniaFSTestImplementationstudyOperation（Expansion of co-firing ratio and consideration of single-firing）Phasing out insufficient energy sources andconsideration of CCUSVerification study of mixed burning of hydrogen and ammoniaWood chipsBlack pelletsVerifi cation study of mixed burning with black pelletsVPP service including renewable energy aggregationHouseholds3Electrification andrealizing a smartsociety Households, businesses (heat pump electrification)MunicipalitiesElectrificationTransportation (Promote to spread the EVs)Industry (Energy shift in the production process)Power generation facilitiesStorage BatterySmart societyPrivate solar power generation, battery serviceActive development of VPP business (including renewable energy resource aggregation business ) by utilizing decentralized energyRemote control by using IoTOffices and factoriesRenewable energyEVSupplying electricityAggregatorEntities which play a role to collect or remotely control energy resourcesMajor efforts and progress23GovernanceEnhancement of corporate governanceStatus of efforts (as of January)Firmly establish a governance system and further improve its effectiveness While fully taking into consideration the social trends and social demandsStatus of efforts (as of January) As a result of the 97th Ordinary General Meetings of Shareholders, the board of directors consists of 16 members, including seven outside directors. (Two of them are women.) Tohoku Electric Power Group Sustainability Policy and Sustainability promotion structure (October)Picking out and developing human resources who support business model transformationStatus of efforts (as of January)Picking out and developing diverse talents inside and outside our group and promoting allocating personnel who can make the growth business profitableStatus of efforts (as of January) Launch of “T-next,” a New AI-driven Education Platform for the Development of Autonomous Human Resources (July) Business creativity training (November)Response to business risksStatus of efforts (as of January)Accurate risk control through integrated management of risks in business developmentStatus of efforts (as of January) Integrated risk management system (June) and promoting the integrated risk management cycle based on an integrated risk management policyReferencesBalance Sheets (Consolidated)25(billions of yen)Dec. 31, 2021(A)Mar. 31, 2021(B)Change(A) – (B)Major factors for changeTotal AssetsNon-current AssetsCurrent AssetsTotal LiabilitiesNon-current LiabilitiesCurrent Liabilities4,622.63,741.8880.73,736.12,697.81,038.14,471.03,731.3739.73,569.52,518.11,051.4Net Assets886.4901.5151.510.5140.9166.5(13.2)(15.0)179.7Bonds : 130.0Interest-Bearing Liabilities2,690.62,433.2257.3Bonds : 155.070.0:CP32.3Loans :Equity Ratio17.5%18.5%(1.0%)Statements of Income (Consolidated)26FY2021/3Q(A)FY2020/3Q(B)(billions of yen)Comparison(A) – (B)(A) / (B)Operating RevenueElectric utilityOther businessOperating ExpensesElectric utilityOther businessOperating IncomeNon-operating incomeNon-operating expensesOrdinary IncomeProvision or reversal of reserve for fluctuation in water levelsExtraordinary IncomeExtraordinary IossIncome taxesNet income attributable to non-controlling interestsNet income attributable to owners of parent1,398.91,213.1185.81,375.61,202.1173.423.33.516.510.30.07.56.06.82.52.41,541.41,391.1150.31,453.61,309.4144.287.86.018.275.7—23.91.150.6(142.5)(177.9)35.4(78.0)(107.2)29.2(64.5)(2.5 )(1.6 )(65.3)0.07.56.01.3(17.1)90.8%87.2%123.6%94.6%91.8%120.3%26.6%58.7%90.7%13.7%—28.5%213.2%(48.2)4.8%Statements of Income (Consolidated)FY2021/3Q（Ａ）FY2020/3Q（Ｂ）Change（Ａ）－（Ｂ）Change（Ａ）／（Ｂ） Major factors for change27(billions of yen)Decrease due to adoption of Accounting Standard for Revenue RecognitionDecrease in meter rate lighting service-Decrease due to adoption of Accounting Standard for Revenue RecognitionRevenueExpenseslEectric utility operating revenueRevenue from Electricity SalesLighting (Residential)PowerSales of power to other utilities and other companiesGrant under Act on Purchase of Renewable Energy Sourced ElectricityOther revenueSub totalOther operating revenue[Operating Revenue]Non operating revenueTotal revenuelexpensesEectric utility operating PersonnelFuelMaintenanceDepreciationPower purchased from other utilitiesand other companiesTaxes, etc. Nuclear power back-end costLevy under Act on Purchase of Renewable Energy Sourced ElectricityOther expensesSub totalOther operating expensesNon operating expensesTotal expenses[Operating Income]Ordinary IncomeProvision or reversal of reserve forfluctuation in water levelsExtraordinary IncomeExtraordinary lossIncome taxesIncome attributable to non-controlling interestsProfit attributable to owners of parent[[[795.6313.1482.4332.9-84.51,213.1185.81,398.9 ]3.51,402.5103.3305.999.5120.6383.661.95.3-121.51,202.1173.416.51,392.123.3 ]10.3[0.07.56.06.82.52.4887.5358.2529.3214.4216.572.51,391.1150.31,541.4]6.01,547.5111.7182.4102.2154.4458.361.25.2115.9117.71,309.4144.218.21,471.887.8]75.7—23.91.150.6[[(91.9)(45.1)(46.8)118.4(216.5)12.0(177.9)35.4(142.5) ](2.5)(145.0)(8.3)123.5(2.6)(33.7)(74.6)0.70.0(115.9)3.8(107.2)29.2(1.6)(79.6)(64.5) ](65.3)0.07.56.0(17.1)1.3(48.2)[[89.6%87.4%91.2%155.2%116.6%87.2%123.6%90.8% ]58.7%90.6%92.5%167.7%97.4%78.1%83.7%101.2%101.7%103.3%91.8%120.3%90.7%94.6%26.6% ]13.7%—-28.5%213.2%4.8%Increase in CIF priceDecrease due to change in depreciation methodDecrease due to adoption of Accounting Standard for Revenue RecognitionDecrease due to adoption of Accounting Standard for Revenue RecognitionGain on sales of securities (Stocks of group companies)Loss on return of imbalance income and expenditureTime Lag between Fuel Cost and Fuel Cost Adjustment Charges28■ Image of Time Lag EffectThe effect of pushing down income by about 110.0 billion yen compared tothe same period of the previous year due to the upward trend in fuel pricesProfit of 35.0 billion yen in 2020FY 3QLoss of 75.0 billion yen in FY2021 3Q2020FY3Q2021FY3QLossProfitLossAverage Fuel PricePrice of imported fuel４月 ５月 ６月 ７月 ８月 ９月 10月 11月 12月 １月 ２月 ３月 ４月 ５月 ６月 ７月 ８月 ９月 １０月 １１月 １２月4/2010/217/211/214/217/2010/20Trends of Operating Revenue, and Each Income (Consolidated) (1/2) 29■ Operating Revenue(billions of yen)2,000.01,479.91,582.41,642.61,541.41,398.91,249.91,296.31,270.11,137.3FY2017/3QFY2018/3QFY2019/3QFY2020/3QFY2021/3QNote : Red line shows operating revenue (consolidated) excluding grant under act on purchase of renewable energy sourced electricity, the surcharge for promoting renewable energy sourced electricity, and the self-contracted portion due to indirect auction, etc. FY2021/3Q is after the application of the “Accounting Standard for Revenue Recognition.”1,500.01,000.0500.00.050.00.0■ Operating Income(billions of yen)150.0100.079.791.987.841.323.3FY2017/3QFY2018/3QFY2019/3QFY2020/3QFY2021/3QOperating Income on Operating Revenue Ratio (Consolidated basis)Operating Income on Operating Revenue Ratio using above red line (Consolidated basis)5.4%6.4%2.6%3.2%5.6%7.2%5.7%7.7%1.7%2017FY/3Q2018FY/3Q2019FY/3Q2020FY/3Q2021FY/3QTrends of Operating Revenue, and Each Income (Consolidated) (2/2) 30■ Ordinary Income(billions of yen)150.0100.050.00.075.050.025.00.073.167.158.131.178.057.075.740.7FY2017/3QFY2018/3QFY2019/3QFY2020/3QFY2021/3QNote : Red line shows operating revenue (consolidated) excluding time lag between fuel cost and fuel cost adjustment charges.■ Net Income or Net Income Attribute to Owners of Parent (billions of yen)100.042.823.849.450.6FY2017/3QFY2018/3QFY2019/3QFY2020/3QFY2021/3Q85.310.32.4Retail Electricity Sales Volume by MonthAprMayJunJulAugSepOctNovDecJanFebMarTotalLighting (Residential) 1,8061,5811,2111,2901,5881,4121,2621,5261,931－－13,607Power3,6003,5123,7123,9574,0723,7683,6743,6463,925Retail Electricity Sales5,4075,0934,9235,2465,6605,1804,9365,1725,857－－－－－－－FY2021FY2020AprMayJunJulAugSepOctNovDecJanFebMarTotalLighting (Residential) 2,0431,6641,3071,3101,5001,6391,4221,5541,9392,8802,4252,28721,969Power3,4653,2343,4143,5423,7263,8133,5593,4593,7964,1963,9303,84843,983Retail Electricity Sales*Total may not match due to rounding.5,5084,8994,7214,8525,2265,4524,9825,0135,7347,0766,3556,13565,95231（GWh）33,86747,474（GWh）Fuel Consumption Results■ Fuel ConsumptionFY2021/3Q(A)FY2020/3Q(B)Change(A) – (B)(Reference)FY2020(ten thousand tons, ten thousand kl)900839799826CoalHeavy and Crude OilLNG704438412408*Above figures are fuel consumption of Tohoku EPCO and remote islandFY2018FY2019FY2020FY2021/3Q35222121[Reference] Historical CIF Prices of Crude Oil, Fuel Coal and LNG7042126063712285679(25)826214088007006005004003002001000LNG (right scale)Fuel CoalCrude oil13/4 13/7 13/10 14/1 14/4 14/7 14/10 15/1 15/4 15/7 15/10 16/1 16/4 16/7 16/10 17/1 17/4 17/7 17/10 18/1 18/4 18/7 18/10 19/1 19/4 19/7 19/10 20/1 20/4 20/7 20/10 21/1 21/4 21/7 21/10Coal(ten thousand tons)Heavy and Crude Oil(ten thousand kl)LNG(ten thousand tons)（ $ / b ・$ / t ）20018016014012010080604020032（$ / t ）1,0002609008007006005004003002001000(Note)This presentation solely constitutes reference material for the purpose of providing the readers with relevant information to evaluate our company.The information contains forward-looking statements based on assumptions and projections about the future with regard to our company. As such, the readers are kindly asked to refrain from making judgment by depending solely on this information.The forward-looking statements inherently involve a degree of risks and uncertainties. Consequently, these risks and uncertainties could cause the actual results and performance to differ from the assumed or projected status of the company.Tohoku Electric Power Co., Inc. hereby disclaim any responsibility or liability in relation to consequences resulting from decisions made by investors.