May 29, 2014

Electric Power Development Co., Ltd.

Accident at the Matsuura Thermal Power Plant (Third Report) and Revision of Earnings Forecasts

Electric Power Development Co., Ltd. ("J-POWER") hereby announces its restoration plan following the low-pressure turbine rotor accident at the No. 2 Unit of the Matsuura Thermal Power Plant ("Matsuura No. 2 Unit") and revision of its earnings forecast in light of this.

1. Restoration plan

On March 28, 2014 during a periodic inspection at the Matsuura No. 2 Unit (Output:

1,000MW) an accident occurred in which a low-pressure turbine rotor fell and was damaged (as announced in the first report1).

Thereafter, in efforts to identify the cause of the accident and restore operation of the unit at an early date, J-POWER has conducted an inspection of the damaged low-pressure turbine rotor and investigated the fabrication of a new low-pressure turbine rotor and provisional restoration of the unit at a partial loading (as announced in the second report2).

Following the investigation, we made efforts to shorten the process to full restoration

of operation through replacement of the damaged rotor with a new low-pressure turbine rotor. As a result, J-POWER currently expects to resume operation by the end of June

2015. To secure power supply in the interim, J-POWER also expects to resume operation with provisional restoration3 at a partial loading around mid-August this year (output of approximately 400MW).

Although an inspection of the damaged low-pressure rotor has been conducted for reuse of the rotor in restoration, J-POWER concluded that it would be difficult to ensure adequate reliability and therefore did not factor this possibility into our current restoration plan.

1. Incident During Periodic Inspection of the No. 2 Unit at the Matsuura Thermal Power Plant
(March 28, 2014)
2. Incident During Periodic Inspection of the No. 2 Unit at the Matsuura Thermal Power Plant
(Second Report) (April 17, 2014)
3. With provisional restoration based on a partial loading, the unit will generate electric power without using the damaged low-pressure turbine, thereby using only one of the two low-pressure turbines of Matsuura Unit No. 2. As a result, the expected output is 400MW in contrast to the plant's rated output of 1,000MW.

Steam Flow Diagram

Under normal conditions
Provisional restoration

Boiler High-pressure turbine

Boiler High-pressure turbine

G

Middle-pressure turbine

G

Middle-pressure turbine

Low-pressure turbine

Condenser

Low-pressure turbine

Condenser

G

Generator

G

Generator

Bir d's Eye Vie w of the turbine and generator (after provisional restoration)

Steam pipe (before alteration)
Steam pipe
(after alteration)
Restoration without incorporating the damaged low-pressure turbine rotor

2. Revision to earnings forecasts

(In millions of yen)

Revision to consolidated earnings forecasts for the 2nd quarter cumulative period

(from April 1, 2014 to September 30, 2014)
Operating

Revenue
Operating
Income
Ordinary
Income Net Income
Earnings
Per Share
Previous forecast (A) 355,000 29,000 21,000 15,000 99.97
Revised forecast (B) 351,000 29,000 21,000 15,000 99.97

Difference (B-A) (4,000) 0 0 0 - Change (%) (1.1) 0.0 0.0 0.0 -

(Ref.) Previous results 346,877 35,568 26,480 18,853 125.64

Revision to consolidated earnings forecast for the year ending March 2015

(from April 1, 2014 - March 31, 2015)
Operating

Revenue
Operating
Income
Ordinary
Income Net Income
Earnings
Per Share
Previous forecast (A) 754,000 69,000 57,000 41,000 273.24
Revised forecast (B) 732,000 57,000 45,000 33,000 219.92

Difference (B-A) (22,000) (12,000) (12,000) (8,000) - Change (%) (2.9) (17.4) (21.1) (19.5) -

(Ref.) Previous results 706,835 59,171 40,077 28,694 191.23

Revision to non-consolidated earnings forecast for the 2nd quarter cumulative period

(from April 1, 2014 - September 30, 2014)
Operating

Revenue
Operating
Income
Ordinary
Income Net Income
Earnings
Per Share
Previous forecast (A) 287,000 25,000 20,000 15,000 99.97
Revised forecast (B) 281,000 25,000 20,000 15,000 99.97

Difference (B-A) (6,000) 0 0 0 - Change (%) (2.1) 0.0 0.0 0.0 -

(Ref.) Previous results 299,462 31,907 26,526 18,709 124.68

Revision to non-consolidated earnings forecasts for the year ending March 2015

(from April 1, 2014 - March 31, 2015)
Operating

Revenue
Operating
Income
Ordinary
Income Net Income
Earnings
Per Share
Previous forecast (A) 578,000 41,000 28,000 20,000 133.29
Revised forecast (B) 554,000 29,000 16,000 12,000 79.97

Difference (B-A) (24,000) (12,000) (12,000) (8,000) - Change (%) (4.2) (29.3) (42.9) (40.0) - (Ref.) Previous results 582,861 40,464 31,060 22,117 147.40

Reason for the Revision

Our earnings forecasts for the year ending March 31, 2015, which were released on April

30, 2014, did not include restoration costs or the amount of impact due to the further extension of suspension of operation at Matsuura Unit No. 2. Because the date of the resumption of operation and other matters regarding the impact of the accident were not known at the time, we prepared our earnings forecasts on the assumption that the periodic inspection would be completed on July 8 as planned before the accident.

We have revised our earnings forecasts based on the restoration plan mentioned in

1. above and taking into consideration factors such as a decline in sales and fuel costs accompanying a reduction in electric sales for thermal power and an increase in restoration-related costs.

At present we are examining various matters such as postponement of repair plans for other thermal power plants to ensure power supply during the current year, and there is

a possibility we will revise our earnings forecasts for the year based on results.

Key Data

Previous
Revised

Forecast Forecast

Electric Power
Business
Wholesale Electric
Power Business
Electricity sales

(Hydroelectric) 9.1 TWh 9.1 TWh

Electricity sales

(thermal) 54.3 TWh 50.6 TWh

Water supply rate 100% 98%

Load factor of thermal

power plants 79% 73%

Other electric

power businesses Electricity sales 2.5 TWh 2.5 TWh

Overseas

Business Electricity sales 9.3 TWh 9.3 TWh

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