Integrated Report 2020

Tohoku Electric Power Group

INTEGRATED REPORT 2020 Progress on Business Financial Corporate Introduction Message from About Tohoku Electric Our Vision Strategies Foundations to Support Top Management Power Group Corporate Value Creation Information Information 01 & President & Representative Director Director Representative Chairman of the Board Representative Director & & Director Representative September 2020 September uncertainties. Based on this keen sense have we urgency, of formulated Electric a new Tohoku Power Group Medium-/ Vision targetingLong-Term the decade the of 2030s. This Vision will serve as a management guidepost for the coming decade and beyond and ensure that the Group can continue grow alongside to our communities. The following words express the ideal form for the Group in the 2030s, as identified in this new Medium-/Long- Vision:Term a group companies of growing in step with sustained societal progress helping by establish to a smart society for a new age, starting Through in Tohoku. business activities based on a transformed business model, will we seek realize to both sustained societal progress and the growth Electric the of Tohoku Power Group, thereby helping build to a smart society while fulfilling our role as a sourceof electricity, chiefly in the six prefectures region the of Tohoku and Niigata Prefecture. seeWe the five-year period from through FY2020 FY2024 as a time transformation of our of business model. During this period, will we advance business development based on three focal points: change,challenges, and creation. This Report seeks convey to information on these growth strategies and our various initiatives in a clear and easy to manner. understand withLastly, pandemic, no end in sight we the COVID-19 to expect various associated challenges continue to affect to the businessGroup’s environment. Nevertheless, Electric Tohoku Power and Electric the Tohoku Power Network remains role our electricity in of source stable a providing to committed as a designated public appreciate utility. We your continuing activities. business our support and for understanding Integrated Report 2020 On publication of the Tohoku Electric Power Group Group Power Electric Tohoku the of On publication Foreword I would thank like to all our stakeholders for their continuing support Electric the of Tohoku Power Group. Despite the impact lower of (retail) sales electric of power and other financial factors, FY2019 results show growth in profits. Contributing factors included improved fuel prices resulting frombringing Unit 3 online at the Noshiro Thermal Power Station and groupwide efforts improve to productivity and efficiency still further, wellas as a major increase in profits to thedue time-lag effectsof the system. adjustment fuel-price theentire Since Group has our worked founding as in 1951, one achieve to both community development and business growth, drawing on an organization integrating power generation, transmission and distribution, and sales. We have never lost sight our of mission: benefit to the publicby providing electricity customers to in the six prefectures the of sight lost we have Nor Prefecture. Niigata and region Tohoku ourof strong sense community. of Various current factors have brought the business environment in which Electric the Tohoku Power Group operates a significant to turning point. These factors include transformations in the structure electricity of demand and supply accompanying the adoption renewable of energy and the continuing transformations associated with digital technology, as well as growing competition on the heels of full liberalization retail of electricity sales and the migration of our power transmission and distribution section an to in-house company organization this past April. In such times dramaticof change, unless Electric the Tohoku Power out seeks and reforms pursues autonomous Group challenges proactively, rather than simply drifting on the path the have date, we trod future to can hold major risks and

Tohoku Electric Power was founded in 1951. Amid Electric theTohoku postwar Power was founded recovery, our first in 1951. called which for management philosophy established Uchigasaki, the Ungoro President, electric starting with Tohoku developing and Tohoku starting Japan in “Rebuilding The Group rephrasedpower.” this motto thereafter as follows: “The prosperity the of regionTohoku is essential continued our We’ve to do own business growth.” to under years. 70 some for philosophy this The strong concern for local communities expressed in this concept is a fundamental management value and the ultimate expression Electric theof Tohoku Power Group’s Management PhilosophyProsperity of in Partnership with the Community. This vision of extending our contribute roots to the regions to in which operate we is an unshakeable pillar from which all Group employees continue approach to their work, even amid business changing conditions. dramatically achieve the to way ProsperityHowever, in Partnership with the Community must change Prosperity with date, the times. To in Partnership with the Community has referred generating to earningsproviding by a stable, low-cost source electricity of to customers and in Niigata. Tohoku Looking forward, will we seek expand to our business area and secure management resources beyond and Niigata, Tohoku while maintaining in our hearts the commitment give to and back the Niigata Tohoku to communities. Through value created progressive by activities grounded in energy services and creating solutions social to challenges, our goal contribute is to and Niigata, Tohoku to attracting human resources, technology, and investment the region. to Essential aspects putting of this management philosophy practice into include receptiveness the needs to and issues confronting the customers who make up our local communities and the commitment each of individual employee creating to new forms prosperity of in joint efforts. The Electric Tohoku Power Group Sou, slogan—Yori, Chikara (The StrengthWork to Alongside)—is a promise our to customers and local to communities. Based on the perspective working of together with and alongside our customers and communities, this promise says each and every Group employee will take this management philosophy heart to in his or her work and everyday activities. Under this slogan, will we seek help to build a comfortable, safe, reliable, and smart society and provide to the added value only Electric the Tohoku Power Group can deliver. (The Strength Work Alongside) to

Yori, Sou, Chikara Yori, Our motto, yori, sou, chikara, derives from the care take in we providing each and every customer with services suited their to lifestyles and working lives. Moving forward, driven our by founding motive of serving as a bedrock for the region, will we continue working hand-in-hand with local communities, delivering services theto individuals within them based on a true sense of gratitude and broad vision of the future. The Tohoku Electric Power Group Slogan Electric Power Tohoku The

the Community” The Tohoku Electric Power Group’s Management Philosophy Group’s Electric Power Tohoku The “Prosperity in Partnership with seekWe create to value Electric only the Tohoku Group Power can deliver and to realize growth and a more abundant society continuing by takeon to challenges communities. our and customers our alongside pursue innovation and The Tohoku Electric Management Group’s Philosophy Power The and Tohoku Group Slogan

Tohoku Electric Power Group Progress on Business Financial Corporate Introduction Message from About Tohoku Electric Our Vision Strategies Foundations to Support Top Management Power Group Corporate Value Creation Information Information 03 The full text ofthe Electric Tohoku Power Group Code of Conduct is available below: https://www.tohoku-epco.co.jp/csr/rinri/ Our thinking on gifts and entertainment Background of the February the of revisions 2020 Background newly formulated Tohoku Electric Power Group Medium-/ Group Power Electric Tohoku formulated newly Vision Long-Term including amendment the of Keidanren (Japan Business (November 2017) Behavior Corporate Charter of Federation) change in response the to growing scale natural of disasters Acceleration of activities toward the Society 5.0 vision, vision, 5.0 Society the toward activities of Acceleration The need to identify employee preparedness based on the the on based preparedness identify employee to need The The need for both mitigation and of adaptation climate to Code of Conduct 3-(2) Conduct of Code Gifts entertainment and Executives and employees must reject gifts or scope the partners business beyond from entertainment commonly accepted in society. The same applies the to provision gifts of or entertainment.

The Code Conduct of was revised in February based 2020 items: following the on The Electric Tohoku Power Group Code Conduct of includes the following provisions regarding the exchange of gifts and entertainment. seek We verify to that the exchange giftsof and entertainment those by affiliated with the Group is appropriate in accordance with this remain policy. We well. as compliance future ensuring to committed Thoroughgoing compliance Building a vital corporate culture culture corporate vital a Building 6 2 based on respect for individuals communication open and free and We striveWe move to ever closer a vital, to free, and free by characterized culture corporate open exchange of opinions, in which all employees can work together in mutual respect. In all our business activities, we go beyond beyond go we activities, business our all In applicable of letter the with compliance mere laws and regulations meet to the requirements principles. ethical corporate sound of with corporate ethics, laws, and and laws, ethics, corporate with regulations and hold at heart an unwavering sense ethics of and a ethics, corporate deep understanding knowledge of and laws, and regulations. This means going beyond mere compliance, seeking strengthen to Electric the Tohoku groupwidePower Group’s culture eschewing of improprieties, never allowing improprieties pass to appropriately. information disclosing and unremarked, Based on this understanding, will we act in accordance with the following Principles Conduct of and Code Conduct of to build strong relationships trust of with customers, business investors, and shareholders community members, partners, employees, and other stakeholders create to alongside and in partnership with them value only the ElectricTohoku Power Group can deliver. (excerpted from the Preamble and Principles of Conduct) of Principles and Preamble the from (excerpted Principles of Conduct of Principles In partnership In communities with transparent Promoting business 2 5 By advancing initiatives that help identify and create solutions local to issues while working contribute will we communities, alongside communities our of growth sustained the to and work achieve to harmony as a valuable citizen. corporate promoteWe highly transparent, open broad- sensitive through activities business full and society with dialogue ranging disclosure. information activities In 1999, the Tohoku Electric the Tohoku In1999, Power formulated Electric the Tohoku Power Code Conduct of as a code guide to employees in their duties. The code has been revised since then in light the of changing establishing social by environment Electric the Tohoku and Power other Group factors. Code In 2017, Conduct, of expanded we the scope cover to the entire Electric Tohoku Power Group. The document was revised once againin February serve to 2020 as a Code Conduct of suitable for those implementing Electric the Tohoku Power Group Medium-/Long-Term Vision while reflecting societal understandingof recent trends and corporate ideals. In performing their duties in accordance with this Code and working together with and alongside our stakeholders, Electric the Tohoku Power Group andits employees will create and provide the value only can we create. Consideration for the the for Consideration Providing products and services and products Providing 4 1 Recognizing that the Group’s business activities activities business Group’s the that Recognizing of formation the to connections deep have to steps proactive take we societies, sustainable address issues like global warming and the need protect to our environment. Putting safety first at all times, we deliver closer us bring services and that products a smartto society in which customers can create andcount on comfortable, safe, reliable living spaces, based on a stable supply of low-cost energy, in support of activities. commercial and lives fulfilling environment that bring us closer to a smart society The Tohoku ElectricThe Tohoku Group Power Code of Conduct Based on the Management Philosophy Prosperity of in Partnership with the Community and our Group Slogan, Sou, ChikaraYori, (The Strength Work Alongside to ), we will achieve sustained growth in partnership with society helpingby build to a smart society through services and activities based on energy. Each and every employee will need take on to unprecedented challenges and advance innovations with a strong sense our of mission as a public utility. Each and every employee must summon the resolve needed play to a role in creating a smart society. In addition, based on the clear recognition that the trust of customers and society represents the foundations our of business, each and every employee must demonstrate The Tohoku Electric GroupCode Power TheConduct of Tohoku

Tohoku Electric Power Group Progress on Business Financial Corporate Introduction Message from About Tohoku Electric Our Vision Strategies Foundations to Support Top Management Power Group Corporate Value Creation Information Information 04 R&D Report ESG Data Book information Non-financial Non-financial Environmental Action Report Action Environmental Tohoku Electric Power Group Corporate Governance Report Governance Corporate Tohoku Electric Power Group NOW This report contains financialforecasts andother forward-looking statements. They represent Tohoku Electric judgments Power’s based on information available at the time disclosure of and certain assumptions. They involve known and unknown risks, uncertainties, and other factors that may cause actual results, performance, and achievements differ to materially from expectations. Forward-looking statements Fact Book Fact Tohoku Electric Power Group Report Integrated Electric Power Tohoku Financial Financial Public Relations Division, Tohoku Electric Power Co., Inc. Co., Electric Power Division, Tohoku Relations Public Honcho, Aoba-ku, Sendai, Miyagi1-7-1 980-8550, Japan Phone +81-(0)22-225-2111, Fax +81-(0)22-227-8390 [email protected] Email: information information Flash earnings report earnings Flash General Meeting of Shareholders, materials for financial results briefingsresults financial Shareholders, for General of materials Meeting Financial report, Hotline (business overview), Notice of Convocation of the Ordinary For inquiries, For please contact: http://www.tohoku-epco.co.jp/ Ministry of Economy, Trade and Industry: Creation Value Collaborative for Guidance International Reporting Integrated (IIRC):Council International The Framework (GRI):Reporting Global Initiative GRI Sustainability Reporting Standards Final report of the Force Task on Climate- Disclosures (TCFD) Financial related Website The Electric Tohoku Power Groupreports issues and significance high in of actions In- Report. Integrated its information financial depth information non-financial and are available from other information sources. Tohoku Electric mediaTohoku for Power’s information disclosure Guidelines information and other used for reference The 63 companies in the Tohoku Electric Power Group Power Electric Tohoku the in companies 63 The While the Report in principle covers initiatives during (April FY2019 1, 2020),2019–March certain 31, activities presented include information frompast fiscal years or FY2020. 2019) Report: (previous September 2020 September 2021 September Roughly Period subject to Report publication of Date Planned next date of publication Scope of Report of Scope The Electric Tohoku Power Group has taken many actions achieve to steady growth under increasingly harsh business intensifying including circumstances, supply power retail deregulated fully the in competition market and changes in the power demand-supply the and population shrinking the with structure widespread introduction renewable of energy. Since to ensure fiscalunderstanding2018, of the Group’s medium- and long-term value creation through these non-financial and financial both from actions reports. integrated published have we perspectives, Reflecting comments from stakeholders regarding Integrated have we prepared Report Integrated 2019, Report based 2020 on a careful selection content of for shareholders and investors. This includes discussions the of growth strategies based on the newly formulated Tohoku Electric PowerGroup Medium-/Long-Term Vision and ESG creation. value support corporate to management willWe continue enhance to the content provided in the Report deepen to understanding Electric the of Tohoku stakeholders. our among Group Power Tohoku Electric Power Group Integrated Report Electric Power Tohoku 2020 Editorial Policy Editorial Policy

Tohoku Electric Power Group Progress on Business Financial Corporate Introduction Message from About Tohoku Electric Our Vision Strategies Foundations to Support Top Management Power Group Corporate Value Creation Information Information 05 Human Resources (Our Employees Are Valuable Assets) ResourcesHuman (Our Valuable Are Employees Safety Communities to Contributing Corporate Governance Our Brand Our Promoting ESG Management ESG Promoting Looking Back over the Tohoku Electric Power Group’s Medium- Group’s Electric Power Tohoku the over Back Looking term Management Policy (FY2017–2020) Results of Efficiency Improvements in FY2019 (Financial Goals Qualitative Targets) Our Thinking on Financial Discipline, Returns Shareholders, to Efficiency Capital and The Electric Tohoku Power Group’s Value Chain Focal Points of the Electric Tohoku Power Group’s FY2020 Plan Medium-Term List of Measures Be to Implemented under the Focal Points of the Electric Tohoku Power Group FY2020 Medium-Term Plan Electricity Business Supply Businesses Help to Realize a Smart Society ManagementEnvironmental Financial/Non-Financial Indicators Information Corporate Consolidated Balance SheetsConsolidated Consolidated and Income of Statements Consolidated Consolidated Statements of Changes in Equity Consolidated Statements of Cash Flows

Evolution of the Management Foundation Creation Supporting Value Corporate Information Financial Business Business Strategy 59 61 64 57 50 51 84 22 23 24 25 26 27 28 29 41 55 78 80 81 Income Comprehensive of Statements 82 83 Our History of Value Creation Strengths of the Electric Tohoku Power Group Value Creation Model Awareness of the Business Environment Focal Points in Business Development An overview of the Electric Tohoku Power Group Medium-/Long- Vision:Term A vision for the 2030s Message from Top Management MessageTop from The Electric Tohoku Power Group’s Management Philosophy and Group Slogan The Electric Tohoku Power Group Code of Conduct Policy Editorial

Tohoku ElectricTohoku Power Group Vision Medium-/Long-Term Message from from Message Management Top About Electric Tohoku Power Group Introduction 13 15 16 18 19 20 06 Foreword01 02 03 04 Index

Tohoku Electric Power Group Progress on Business Financial Corporate Introduction Message from About Tohoku Electric Our Vision Strategies Foundations to Support Top Management Power Group Corporate Value Creation Information Information 06 Representative President Director & Long-Term Vision Long-Term Background factors for the formulation of the Electric Tohoku Power Group Medium-/ Projections indicate that the population the of six Tohoku region prefectures and Niigata Prefecture, the base of our business activities, will decline roughly by 30%from 2045. This to will present2015 a wide range of challenges in our everyday lives. The time has come to reconsider our ideals with regard the shape to local of society and our communities; how services are provided; and how are live we to under these the formulated we recognition, this on Based conditions. ElectricTohoku Power Group Medium-/Long-Term hereinafter), Vision” (“Medium-/Long-Term Vision publishing the Vision in February this of year. Numerous industries today face increasingly rapidand changing and innovations technological dramatic business conditions. In the energy industry in which we operate, industrial structures are transformed the by decarbonization, Ds: depopulation, Four digitization. and decentralization, Message from Top Management Top from Message

Tohoku Electric Power Group Progress on Business Financial Corporate Introduction Message from About Tohoku Electric Our Vision Strategies Foundations to Support Top Management Power Group Corporate Value Creation Information Information 07 electric centered power, on hydroelectric Our power. and Tohoku starting Japan in “Rebuilding motto, initial developing starting Tohoku with electric power,” represents the starting point our of thinking on management. can We say the roots the of Tohoku Electric Power Group lie in confronting and striving to issues. social to solutions find the present, to Turning as noted above, the issues we facetoday include the need respond to changing to industrial structures and rethink to society in the six the on based Prefecture, Niigata and prefectures Tohoku trend depopulation, of low birth rates, and an aging society. Examining this reality in light Electric Tohoku of foundingPower’s spirit prompts a new vision: a business model that targets a smart society based on electricity. supplying of business the to continueto specializing in this business in the future as well. Casting our eyes Electric back the Tohoku to roots shows have we Power always Group’s acted based on a desire confront to and find solutionsto the issues our of times and contribute to not just the six to prefecturesTohoku and Niigata Prefecture, but to Japanese society as a whole. must We recognize that this is the starting point for the forward way from where standwe today. An important issue facing society when Electric Tohoku Power was founded was the need for recovery in Japanese society, which was devastated the by nation’s loss in World An II. War issue similar of gravity in the six prefectures Tohoku and Niigata Prefecture was the need advanceto economic development power to such a recovery. One solution develop was to sources of transformation The starting point of a business model Simply put, this Medium-/Long-Term Vision is an expression our of orientation a business toward model transformation. taking on the We’re challenge of businesses help to realize a smart society providing by customers with new value that brings all us of closer a to smart society in which can we establish comfortable, safe, reliable living spaces and maximize enrichment and enjoyment, all based on the electric power business that has served as the business core the of Group’s for 1951. in founding our since years 70 roughly In light our of strong sense mission of as well as pride in able perhaps be may we electricity business, supply our Message from Top Management Top from Message

Tohoku Electric Power Group Progress on Business Financial Corporate Introduction Message from About Tohoku Electric Our Vision Strategies Foundations to Support Top Management Power Group Corporate Value Creation Information Information 08 would communicate like to employees to the need to maintain the trust have we established while transforming our own outlook. isthe foundationTrust all of our business activities. We must continue build to on this valuable asset earned by and predecessorsour customers our alongside communities. Indoing rather so, than simply resting on the laurels the of trust already established, must we keep in mind at all times that trust is created and strengthened proposing by solutions based on sensitivity factors to such as global developments, customer needs and concerns, and local issues. Term Vision Term We recognize We transforming our business model will be difficult. the At same time, a bylaw the of natural world says creatures that fail change to and adapt their to environment become extinct. believe We now is the time move forward to with our intentional transformation grow over to the medium long to term, proactively keeping pace with the progress our of customers and our communities—that grasp is, to this concept the of survival the of fittest from an active rather than a passive perspective. In transforming our business model, need we calmly to identify the characterthe of business environment and the path would we take forward. On this point, will we seek transform to our business model strengthening by our electricity supply business and swiftly achieving profitability in services that contributeto a smart society. have that companies commonalityOne among succeeded with business model transformation is how they have applied their core expertise, technologies, and strengths new domains. to In our case, see we as strengths our status as electric power professionals with electricity manage supply to capacity—for example, the and demand—and our strong ties the community, to which allow effective dialogue with customers and others, chieflyTohoku in the prefecturessix and Niigata Prefecture. Our goal integrate is to advanced digital technologies and other solutions with strengths accumulated years over generate 70 to effective transformation. model business As work we realize to the Medium-/Long-Term Vision, I The path toward realizing the Medium-/Long- Message from Top Management Top from Message

Tohoku Electric Power Group Progress on Business Financial Corporate Introduction Message from About Tohoku Electric Our Vision Strategies Foundations to Support Top Management Power Group Corporate Value Creation Information Information 09 particular, due the dramatic to loss supply of capacity from plants on the Pacific Coast, rapid recoveryof the plant was especially urgent. I urged the staff think to about achieve how to recovery. Everyone involved in the recovery process—not just our own employees, but side partners—worked by various side our of employees as a team figure to out thishow could be achieved, while eschewing reasons why it couldn’t. As a result, we were able bring to the plant back online more than one year ahead the of initial schedule. mustWe take the same approach the toward Medium-/ Vision. DifficultLong-Term challenges like this tendone generateto any number reasons of why it may appear to than Rather difficult. prohibitively or impossible be regarding these as valid excuses, must we findto ways turn them factors into that help us succeed. Medium-/Long-Term Vision Medium-/Long-Term The awareness needed to realize the In our Management Philosophy statement, articulate we the new awarenessrequired for Group employees. Our goal is “to seek create to value only Electric the Tohoku Power Group can deliver and realize to growth and a more abundant society continuingby take on to our alongside challenges innovation pursue and challenges, terms The communities.” our and customers innovation, and growth found in this statement will serve as keywords. While each may appear be part to a of responsibleawareness employee’s and of attitude work,toward ensuring that each and every one the of roughly 25,000 Group employees holds this outlook poses various challenges. Only when each employee sees the Medium-/Long-Term Vision as a narrative in which he or she plays a leading role will be we able to take practical action take on to challenges, innovation, and growth. This is why repeatedly we remind employees take a personal to interest: understand to that realizing a smart society is not something that we can rely on others achieve, to but depends on each and every individual. Ever since joining built Electric I’ve a Tohoku Power, career based in the thermoelectric power generation segment. The GreatEast Japan Earthquake nine years ago was one the of major turning points in career my to that At date. time, I worked on recovery efforts as General Manager the of Haramachi Thermal Power Plant, which had been damaged that At the by disaster. time—just as it is today—Haramachi was a core element supply the of Group’s capacity.that At time in Improving the ability to generate cash flow as needed to transform the business model One our of major business responsibilities earn isto the trust shareholders of and investors and meet to their expectations. In response the formulation to the of Medium-/Long-Term Vision, adopted the we’ve new goal set positiveto consolidated cash flow as an indicatorof our ability generate to the cash flow neededto realize this set a minimum vision. we’ve For target now, for consolidatedTo cash 320 flowof billion yen in FY2024. effectively fund investment in growth fields to anddrive business model transformation, will we carry out management intended generate to firm cash While flow. adequate investment in the areas needed for growth remains pressing, have we no intention neglecting of financial discipline. It also is importantto provide a degree returns of from profits. Thus,we continueto dividends for provide that policies capital implement reflecting a sound balance between growth and stability. Message from Top Management Top from Message

Tohoku Electric Power Group Progress on Business Financial Corporate Introduction Message from About Tohoku Electric Our Vision Strategies Foundations to Support Top Management Power Group Corporate Value Creation Information Information 10 Promoting ESG management Promoting Human resource development is a crucial element in building a smart society and assuring sustained growth for the Group. the At same time, from a sustainability perspective, comprehensive measures in the areas of the environment (E), society (S), and governance (G) also remain essential. In the area the of environment in particular, mitigation climate of change is a pressing issue worldwide. In light factors of such as growing interest in moving from away coal, the Group must take various steps fulfill to our responsibilities. In consideration environmental of aspects as well, will we make progress building toward a sustainable society developing including approaches, various from renewable energy and providing services based on plant power nuclear resuming energy; renewable operations; improving thethermal efficiencyof thermoelectric power generation; and participating in feasibility studies on carbon capture and storage (CCS). develop the human resources needed come to up with the ideas andthen establish the related services. To have we soughtdate, improve to business efficiency under the banner workstyle of reforms and develop to an environment in which new ideas can flourish. we As move forward, will we strive ensure to that steps taken in response streamlining COVID-19—from to business activities adopting to work from home and other diverse work styles—will be more than mere temporary emergency measures, linking them instead workstyles to that reflect individual employee lifestyles andvalues, thereby continuing boost to productivity and shifting human resources growth into fields. Taking on the challenges of realizing a smart society with an eye toward the post-COVID age supporting a lifeline for residents and industries by extending payment deadlines for electricity fees for pandemic. the to due financially struggling customers theAt same time, must we also adopt a slightly longer- term perspective. A clear understanding the of efficiency remote communication, online of convenience and healthcare, and education, and robotics prompted by technological accelerated pandemic has the developments in these fields.We must overlook not the rapid growth in our receptivity non-face-to-face to and contactless communication and services. As a look outside any window will workers prove, from various deliveryservices are a much more common sightthan just a few months as ago, home delivery now plays an even bigger part in our everyday lives. Under the new behavioral norms so recently established, people reflexively maintain a safe distance fromothers. Keywords that have emerged through the course the of pandemic, includingCOVID-19 theshift from centralization decentralization to and non-face- toward to-face and remote communication, point new to favorable create turn These in opportunities. business conditions for our progress in businesses intended to realize a smart society. The vision a smart of society depicted Electric in the Tohoku Power Group Medium-/ Vision correspondsLong-Term this to new normal. We believe these factors have broadened our routes toward realizing a smart society. theAt same time, new services and their underlying ideas do not appear It from is essential thin air. to Responding to COVID-19 Responding to nuclear power plants back online back plants power nuclear A major first step toward realizing the Medium-/Long-Term Vision: Bringing the the Vision: Bringing Medium-/Long-Term Another current issue must we address is the COVID-19 pandemic. First, as a Group companies of whose role is to responded have we support infrastructures, social to the pandemic taking by measures ensure to the our fulfilled also We’ve electricity. of supply uninterrupted responsibilities as a power company charged with As I mentioned above, as part our of efforts realize to the Medium-/Long-Term striving Vision, we’re to strengthen our power supply business and rapidly achieve profitability in businesses that will helpto realize a smart society. Among various issues, the currently most pressing one involves rapidly resuming the operation nuclear of power plants. In February this of the sameyear, month in which announced we the Medium-/Long-Term Vision, secured we a permit from modify to Japan of Commission Regulatory Nuclear the the nuclear reactor equipment at Unit the 2 of Onagawa Nuclear Power Plant. This represents a major step forward resuming toward operation the of unit. Nevertheless, the central aspect resuming to operations is the understanding and consent local of communities. The understanding local of residents will drive not only the resumptionnuclear of power plant operations but as Vision Medium-/Long-Term the of achievement the well. Based on this clear recognition, intend we attend to the activitiesto that will earn this understanding. Message from Top Management Top from Message

Tohoku Electric Power Group Progress on Business Financial Corporate Introduction Message from About Tohoku Electric Our Vision Strategies Foundations to Support Top Management Power Group Corporate Value Creation Information Information 11 Conclusion Our Medium-/Long-Term Vision is grounded in the belief that current conditions mark a potential second founding Electric the of Tohoku Power Group. this At critical juncture, where face we not just changes in the business environment, but the birth Electric Tohoku of Power Network (the legal unbundling power of transmission/distribution operations), this marks the time at which the Group should begin blaze to new a trail forward. Ahead us, of beyond the transformation of room with horizon expansive an lies model, business the for sustainable society, not just in the six Tohoku prefectures and in Niigata Prefecture, but in all Japan of and the world as well. It is hope my that each and every employee will move forward with bold determination to open a new page in our history, recognizing the importance working of Electric in the Tohoku Power Group at a time like this. As the individual entrusted with guiding the management Electric the of Tohoku Power Group, I am determined provide to strong leadership so that all us of within the Group can work together as one move forwardto on the path identifiedby the Medium-/ Vision Long-Term Message from Top Management Top from Message

Tohoku Electric Power Group 12

Tohoku Electric Power Group Progress on Business Financial Corporate Introduction Message from About Tohoku Electric Our Vision Strategies Foundations to Support Top Management Power Group Corporate Value Creation Information Information 13 Scene from the construction of of construction the from Scene 2 No. Plant Power Numazawa Onagawa Nuclear Power Station at the time operation commencing of Onagawa Nuclear Power Station Unit 1 (524 MW), our first nuclear plant, begins operating power oil-fired thermal power and ensure a stable supply of electrical power A global oil crisis and power shortages Pursuing diversification of power sourcesto break from dependency on 1984 From the initial planning stages in building the Onagawa Nuclear Power Station, we recognized countermeasures against tsunamis as a key issue. academic external including committee in-house An experts determined that the minimum site elevation m abovehad sea be to 14.8 level, a figure based on data from past tsunamis, including the Jogan (869) tsunamis. andThe Keicho height (1611) of the tsunami in the Great East Japan Earthquake in this area was m and did13 not exceed the site elevation. 1970s — Motivated the by global oil crisis, Electric Tohoku Power approached various issues, including research on diverse power sources and development site surveys, with the aim breaking of the dependency on Power oil-firedsource diversificationpower. advanced pumped-type large-scale the Both considerably. Numazawa Power Plant 2 and No. Onagawa Nuclear Power Station Unit 1 came online during this period. Bird’s eye view of the Tadami River power source region at the time of hydroelectric the of construction the plant power Group photograph at the Hachinohe Hachinohe the at photograph Group office construction Station Power Thermal while ceaselessly working create to new corporate value. Our first large-scale thermal power plant, Hachinohe ThermalPower Station Unit 1 (75 MW) comes online Tohoku Electric Power was founded in 1951, a time when ElectricTohoku Japan Power was was founded still recovering in 1951, from the turmoil the of Second Since confronted then, World we’ve War. difficult challenges in each era, including power shortages during the postwar period reconstruction, of oil crises, numerous natural disasters,and the deregulation the of electric power market. Oneach occasion, the Group has worked as a team fulfill to its mission of delivering a stable, high-quality supplyof electricity. Moving forward, will we continue work to with local communities contribute to the growth to and developmentthe of six prefectures region the of Tohoku and Niigata Prefecture demand for electric power Postwar reconstruction and rapid economic growth bring growing reconstruction growth growing bring rapid Postwar economic and 1958 We madeWe the decision build to our first large-scale thermal power plant since the uneven distribution of hydroelectric power sources in the southern portion of the Tohoku region generated the urgent need bolsterto power supplies in the north. Based on geographical factors, we chose build to the plant in the city of Hachinohe, in Aomori Prefecture, where it would be easy procure to coal produced in Hokkaido. assembledWe a team of first-rate engineers from both within and outside thecompany begin to construction. Unit 1 came online in June followed 1958, by Unit 2 (75 MW) in October of the same year. by developingby power sources catering growing to demand for electric power 1950s — Contributing postwar to recovery and the development andof Tohoku Niigata power plants, starting with the Hachinohe Thermal supported Power Station. We’ve local economic growth and the lives local of residents ever since. Amidst electricity shortages during the postwar period period electricity postwar Amidst shortages the during Electric recovery,of Tohoku Power pushed ahead to develop energy sources within River the Tadami water system, its largest hydroelectric power zone, working starting Tohoku Japan “Rebuilding with motto: under the power.” electric through Tohoku developing and meet to growingLater, demand for electric we power, thermal state-of-the-art expanding and began building

Developments Value provided by Tohoku Business topics in society Electric Power Our History Creation Value of

Tohoku Electric Power Group Progress on Business Financial Corporate Introduction Message from About Tohoku Electric Our Vision Strategies Foundations to Support Top Management Power Group Corporate Value Creation Information Information 14 Utility pole erection work work erection pole Utility immediately after the earthquake Campaign activities for the the for activities Campaign web money-saving convenient, Net e service Yorisou See “Enhancing Resilience,” p. 60. Rapid recovery from power outages caused the by Great Earthquake Japan East Supporting efforts recover to from the Great East Japan Earthquake and Great East Japan Earthquake Japan East Great 2011 Phase of major change in the electricitybusiness brought about the by electricity deregulation of retail Full market generation of Tohoku Electric Power employees help to prepare for future unforeseen disasters. Moving forward, we will continue pursue to activities support to recovery within the Tohoku region. The Great East Japan Earthquake and the ensuing tsunami wrought significant damageto power plants, transmissiontowers, utility poles, and many other elements of the infrastructure, ultimately leaving almost the entire Tohoku region without Despite power. these conditions, drawing on the combined strength of the Tohoku ElectricPower Group, we resolved around 80% of all power outages within three days after the disaster. These efforts were driven by the strong sense ofduty of our employees and the desire restore to power our to customers as soon as possible. plan We pass to on the experiences and memories of this difficult timeto the next tackling the challenge of creating new value in the era of full-scale competition era of the in value new creating challenge of tackling the 2010s — We’re currently tacklingWe’re various management issues, including intensifying competition and the legal distribution and transmission power the of unbundling working supporting communities local while sectors, recoverto in the aftermath the of earthquake. We’re engaged in various new initiatives, including offering services, and electricity plans supplying pricing new and region, operating traditional our outside expanding use renewable of energy, as well as efforts strengthento our corporate value. Higashi Niigata Thermal Power Thermal Power Niigata Higashi Station series achieved 4–1 levels efficiency thermal world-class 55%. exceeding We establishedWe call centers in Sendai and Niigata consolidate to the handling of calls. phone customer global environmental issues environmental global Rates lowered for the first after partial the time for lowered deregulationRates Deregulation of the electricity the Deregulation of begins retail market Growing interest in environmental issues Responding partial to deregulation of the electric power retail market and 2000 seeking reduce to environmental impact in response growing to interest in Following the partial deregulation implemented in March 2000, we worked improve to management efficiency with the goal of achieving price levels that would make it possible compete to against quality of the maintaining while competitors our large- efforts These included electricity supply. our scale organizational improvements. Starting with the first rate reduction in October 2000 after partial deregulation went into effect, we achieved a total of four rate reductionsover six years. 1990s — Partial deregulationthe of electric power retail market launched in the targeted 1990s in particular extra high-voltage customers. In response partial to deregulation, Electric Tohoku Power sought achieve to a competitive ensure and transformation corporate pricing. also We implemented measures reduce to impact on the global environment and make more effective use energy, working of develop to renewable andwind, geothermal solar, power generation and improve the thermal efficiency of thermal power plants.

Developments Value provided by Tohoku Business topics in society Electric Power Our History Creation Value of

Natural capitalNatural Example: Number of hydroelectric power plants: Geothermal power generation: Share of equipment capacity of all geothermal power plants in Japan: approx. 1,130 Strong community ties %

63 Social and community capital and Social Customer base, business facilities, and power infrastructures in six six in infrastructures power and facilities, business base, Customer prefecturesTohoku and Niigata in Prefecture Ties local to governments, local economic associations, and other Prefecture Niigata in and prefectures Tohoku six the in organizations in and prefectures Tohoku six the in activities contribution Social Niigata Prefecture Example: Number of community activities in FY2019 in community activities of Number km km

Intellectual capital

15,363 144,665 (As of March 2020) 31, Example: (Commercial operation slated to begin in June 2023) Thermal efficiency improved to at least Technological developments to improve improve to developments Technological thermal efficiency Unit 1 of the Joetsu Thermal Power Plant The trust of our stakeholders 257 Production capitalProduction Strengths Electric Group of the Power Tohoku Examples of non-financial capital built70-year over ourup history Total length of power distribution lines: Example: generation facilities: Power Total length of power transmission lines: loyees in FY2019 Electricity professionals 24,870 Human capital Human

Power grid operating and control technologies control and operating grid Power Disaster recovery experience drawn from response the to Great East Japan Earthquake and prefectures Tohoku six the of potential development energy Renewable Niigata Prefecture The human resources and sense of mission needed to support stable support stable to needed mission of sense and resources human The supply power electric efficiency high world-leading and technologies operating generation Power technologies generation power thermal Throughout our history roughly of years, Electric 70 the Tohoku Power Group has built up steadily not only its financial capital but its non-financial capital as well. The community and capital—have social and supported two capital, production capital, natural capital, period—human this intellectual capital, amassed over we’ve capital important strengths that give the Group the power succeed to in competition. First,as electricity professionals, developed we’ve operational technologies forpower generation, grid operating and control technologies. established Secondly, we’ve a customer base centered on six prefectures region the of Tohoku and Niigata Prefecture through strong ties local to communities. plan We leverage to these two strengths as face we dramatically changing business conditions. Example: Total numberTotal of Group emp Strengths Electric Group of the Power Tohoku

Shareholders, investors Returning a share of profits Choosing our Group our Choosing the Growing of societyof alongside sustainable sustainable development development Tohoku Our ideal for the 2030s Realizing a growth cycle realizing by our ideals new era, starting in A smart society for a Investing in employee development, development, employee in Investing allocating investment to growth fields to investment allocating improving motivation, and related goals related and motivation, improving Proceeding through the growth cycle by Customers, communities local 2030s smart society Power Group can deliver can Group Power Value creation and solutions solutions and creation Value that only the Tohoku Electric Tohoku the only that to realize a Businesses term planterm Enhancing competitive competitive Enhancing strengths through the in reforms comprehensive electricity business supply Taking on the challenge of swiftly achieving profitability in businesses to realize smart a society Evolving the management support to foundations creation value corporate Focal points the of medium- 1 3 2 Medium-/Long-Term Vision Medium-/Long-Term supply supply 2020s Tohoku Electric Power Group Electric Power Tohoku Change business Point Point Point Creation Electricity The Tohoku Electric Power Group’s FY2020 Group’s Electric Power Tohoku The Challenges Business model transformation through a strategic shift resource 1 2 3 sources business business business business Philosophy competitive competitive Community Group Slogan Group power supply supply power Active use of development opportunities. Prosperity in Focal points of Comprehensive Comprehensive enhancements of of enhancements Group Management Management Group strengths inthe grid Seeking solutions to Yori, Sou, Chikara Yori, social issues present present issues social decentralized energy energy decentralized Partnership with the (The Strength to Work Alongside)(The Work Strength to e The Electric Tohoku Power Group Medium-/Long-Term Vision reflects business circumstances, ourown strengths, andother considerations. Based on createdvalues only Electric the Tohoku Power Group can deliver through this plan, Electric the Tohoku Power Group will create move to a comfortable, safe, reliable smart society for a new era, starting will We apply in Tohoku. and proceed through a positive growth cycle providing by stable returns diverse to stakeholders while growing the Group andpursuing the sustainable development society. of will We invest the resulting gains new into growth fields and the measuresto ensure a continuing stable supply. founding Strong communityStrong ties Electricity professionals Our history since our A focus on the six Tohoku to our own growth. The prosperity of the Strengths of the Tohoku Electric Group Power The trend toward the four Ds (depopulations, decarbonization, decentralization, digitization) in the energy industry Emergence of social issues posed by society aging an and populations declining due to low birth rates Medium-/long-term Medium-/long-term environment business Structuralchanges in electricity demand supply and energy renewable of adoption Growing by about brought Intensifying competition electricity retail sales of deregulation Current business environment prefectures Niigata Prefectur and Tohoku region is essential is region Tohoku Value CreationValue Model

Tohoku Electric Power Group 17

Tohoku Electric Power Group Progress on Business Financial Corporate Introduction Message from About Tohoku Electric Our Vision Strategies Foundations to Support Top Management Power Group Corporate Value Creation Information Information 18 Opportunities, response Opportunities, response In addition accelerating to development as a major power power advancing source, networks for accepting appropriately power renewable Digital human resource resource human Digital use accelerating development, service in technologies digital of marketing, and advancing open innovation services Developing that energy decentralized harness sources, such as virtual power plants (VPPs; see 42) p. Optimizing fuel procurement and source power optimal building structures Optimizing procurement by power well-balanced building diversifying structures, source fuel procurement methods, and means other Offering products and services to services and Offering to products help find solutionsto new community and needs customer issues Promoting ESG management to drive the evolution of foundations management (T) (E) Economy Risks Risks Technology and difficulty of grid (increase in competitive interconnection Damage to competitive competitive to Damage strength due inadequate to innovation and digitization Decreased demand for grid power competitive relative in Decline strength thermoelectric of power strengths of renewable energy sources) Difficulty securing profitsin the businesselectricity wholesale Uncertain fuel prices fuel Uncertain (total demand, load curve) Emergence of competitors competitors of Emergence industry boundariesacross electricity for demand Changing Accelerating investor selectivity investor Accelerating

(e.g., from (AI, 5G, etc.) Spread of electricity investment oil markets oil (storage cells, etc.) cells, (storage Fluctuations in in Fluctuations More active ESG renewable energy renewable Falling wholesale wholesale Falling Transformations in in Transformations transaction prices orientation Accelerating digital digital Accelerating the post-COVID age innovation international crude crude international economic activity economic in Digitalization toward sharing economy) sharing toward Changing consumer consumer Changing Growing adoption of of adoption Growing products to services, shift decentralized energy decentralized Decentralization Opportunities, response Opportunities, response Business development that that development Business social to solutions regards issues as business opportunities Preventive measures and enhancement of ability to respond an to emergency business new Uncovering for demand and opportunities electrification Use oflow-carbon power sources change climate implementing and mitigation measures in both supplydemand and Initiatives to resume operations operations resume to Initiatives with plants, power nuclear at safety set as the major prerequisite Advancing sales strategies profitability and targeting venturing into markets beyond Tohoku-Niigata Enhancing competitive competitive Enhancing strengths within the market bidding appropriate through strategies and hedging by risks See “Environmental Management,” p. 51. p. Management,” “Environmental See (S) (P) Risks Risks Politics Society Impact on continued use of power from fossil fuels Decreased demand for difficultyof electricity, maintaining the Group’s foundation business (particularly inefficient coal power sources) of supply stable the on Impact electricity for demand Changing for need electricity and services and products Prolonged suspension of of suspension Prolonged power nuclear at operations plants and impact on back-end expenses Intensifying competition in retail retail in competition Intensifying markets Unreliable returns on on returns Unreliable expenditures due to differentiation perspective electricity values concerning and corresponding market segmentation A look at the business environment in which Electric the Tohoku Power Group operates shows intensifying competition due the deregulation to retail of electricity sales andthe growing adoption renewable of energy. Over the medium long to term,the four Ds depopulation, of decarbonization, decentralization, and digitization will affects business models within the energy and electric power industry. Additionally, it will be crucial pay close both to attention the impact to the of COVID-19 pandemic on demand for electricity and pursue to business development with an the toward eye post-COVID world. (against world warming Enhanced Enhanced regulatory electricity sales) electricity nuclear power nuclear Electric power declines in the six resilience system reforms system Need to enhance enhance to Need environment for for environment in Niigata Prefecture Niigata in Establishing new new Establishing Advancing global global Advancing in the post-COVID Transformations in in Transformations Tohoku prefectures and Tohoku disasters, pandemics, etc.) pandemics, disasters, Accelerating population Accelerating population Depopulation values and lifestyles transaction markets (Full liberalization retail of Decarbonization Phenomena corresponding to the four Ds four the to corresponding Phenomena Awareness of the environment business of Awareness

Tohoku Electric Power Group Progress on Business Financial Corporate Introduction Message from About Tohoku Electric Our Vision Strategies Foundations to Support Top Management Power Group Corporate Value Creation Information Information 19 Prefecture Prefecture Seeing solutions to social issues businessas opportunities and business growth to them linking Comprehensively enhancing the grid our of abilities competitive business supply power Active use of decentralized energy in areas such as fuel cells electricand vehicles Continuing to contribute to to contribute to Continuing Tohoku prefecturesTohoku and in Niigata sustainable development in the six six the in development sustainable 1 2 3 six prefectures Tohoku and in Niigata Continuing to supply electricity to the Focal points for future business points for Focal development igitalization D ecentralization D the four Ds (Efficient provision of various services,various of (Efficient provision Niigata Prefecture Niigata business environment Six Tohoku prefectures and prefectures Tohoku Six epopulation maintenance of community functions, etc.) functions, community of maintenance Energy, electric power industry power electric Energy, ecarbonization D D birth rates populations and an aging society due low to Medium- long-term to changes in the Transforming business models in response to Emergenceissues of accompanying declining Inthe business environment in which the Group operates, recent developments such as intensifying competition due deregulation to retail of electricity sales and growing use renewable of energy have had marked impacts. Other developments include the emergence issues of accompanying a declining population and an aging society due low birth to rates in the prefectures six Tohoku and in Niigata Prefecture, whichserve as the base Group of businesses, as well as the four “D” trends affecting the power business. see We these as medium- long-termto changes in the business environment. In response, identified we’ve thefollowing threefocal points for business development: seeing solutions 1. social to issues as business opportunities and linking them business to growth; comprehensively 2. enhancing the competitiveabilities our of grid power supply business; and making 3. active use decentralized of energy in areas such as storage cells and electric vehicles. Based on these focal points, the Group will continue contributing sustainable to development in the prefectures six Tohoku and in Niigata Prefecture while continuing to region. the electricitysupply to Intensifying competition due to Intensifying to due competition Growing use renewable of energy deregulation retail of electricity sales Recent changes business the in environment Focal Points in Business Development Business in Points Focal

Tohoku Electric Power Group Progress on Business Financial Corporate Introduction Message from About Tohoku Electric Our Vision Strategies Foundations to Support Top Management Power Group Corporate Value Creation Information Information 20 2050 Tohoku the 2030s the A group of companies for a new age, starting in The Electric Tohoku to establishto a smart society societal progress by helping helping by progress societal Power Group vision for for vision Group Power growingin step with sustained 2030

(growth business)

e t Businesses to help realize a smart society

Maximizing value for the customer through a broad range of comfortable, reliable servicessafe, a r

Accelerating growthAccelerating 2025~2030

r o

Generating an abundance of achievements to move closer to ideal the

own growth. This will lend energy needed achieve to our ideal for the 2030s: work to as a group enterprises of bring to uscloser a smart to society for a new era, starting from progress. societal sustainable with pace keeping and Tohoku, As strive we realize to this ideal, will we seek achieve to stable earnings enhancing by our competitive strengths and structural reforms in our core electric power supply strategic the through model business our of transformation the pursuing while business, investment management of resources in growth businesses that will bring us closer a to smart society. Having positioned the period through as one FY2024 entailing the transformation business of models, will we proceed with this transformation and move generateto expansive results during a period accelerated of growth starting in FY2025.

r c

(core business) (core

n I Business model transformation Medium-/Long-Term Vision Medium-/Long-Term Tohoku ElectricTohoku Group Power 2020~2024 Electricity supply business Electricity supply through anoptimal portfolio ofpower energy, renewable sources, including maximizingand business efficiency Maximizing the value of electricity of value the Maximizing Business model transformation period transformation model Business Giving concrete form to businesses to help realize smart a society; business roadmap for establishing a transformationmodel 2020 To date 2011 Earthquake foundations following the earthquake the following foundations deregulation of retail electricity retail sales of deregulation Regional recovery and restoration of financial financial of restoration and recovery Regional of time a in strengths competitive Enhancing Great East Japan Business operations under an integrated integrated an Business operations under generation, power structure for transmission, sales distribution, and FY value Corporate In February the 2020 Group published Electric the Tohoku Power Group Medium-/ Vision. The publicationLong-Term the of Vision was motivated a certain by urgency: Should the Group fail advance to and successfully tackle the challenge proactive of reforms in this time dramatic of changes in society and in electric power demand and guided has that mission the pursuing continue to difficult be would it structures, supply us since our founding, as expressedin the Management Philosophy, which calls for alongside growth sustained achieve to or Community, the Partnership with in Prosperity society. Using this Vision as a guidepost, plan we contribute to sustained to societal progress through businesses that help realize a smart society (Society 5.0)—primarily in the prefectures six Tohoku and Niigata Prefecture. In so doing, plan we achieve to our An overview of the Tohoku ElectricAn Vision: Group overview of the Medium-/Long-Term Power Tohoku A vision for the 2030s

Tohoku Electric Power Group 21

Tohoku Electric Power Group Progress on Business Financial Corporate Introduction Message from About Tohoku Electric Our Vision Strategies Foundations to Support Top Management Power Group Corporate Value Creation Information Information 22 Establishing solid business through foundations transformation 03 Steady progress with Corporate Social Responsibility Social Corporate progressSteady with (CSR) Further improving our financial position financial our improving Further competition against succeed to Reorganization Promoting use of diverse human resources Focal point Focal changing business environment, statutory including distribution transmission & power the separation of equity capital up building steadily to addition businesses, in environments by promoting diversity, workstyle reforms, and other efforts Electric Power Group Code of Conduct and Tohoku Electric Power Group CSR Policy 1 2 3 4 Establishing productive and rewarding workplace Advancing ESG management based on the Tohoku Pursuing appropriate organizational reforms reflecting the organizational appropriate reflecting the Pursuing reforms Seeking business new growth opportunities 02 Power sales beyondour home turf Expanding the overseas business business supply gas the Enhancing Developing the power and fuel trading business energy business renewable the Promoting Pursuing innovations to expand future business domains Focal point Focal development by setting development targets, setting development by development structures,enhancing projects, participating multiple in initiatives other and progress in providing services based and on AI, IoT (VPP) plant virtual as such power activities advancing local cooperation with in feasibility studies others and governments electricity plan for the greater area Tokyo and alliances with Synergia Power and Tokyu Power Supply (Indonesia) project generation power geothermal Dedap and Nghi Son 2 Coal-Fired Thermal Power Plant (Vietnam) projects facility of the Shin-Sendai Thermal Power Station online and enhancing alliances with local natural gas businesses energy trading through electricity trading markets and electricity and through energy trading markets trading futures fuel 1 2 3 4 5 6 In the renewable energy business, renewable accelerating the In In the area of innovation, in addition to making Boosting electricity sales through the Yorisou Denki electricityBoosting Yorisou sales through the Inoverseas businesses, participating in the Lantau Inthe natural gas business, bringing the LNG shipment At Tohoku EPCO Energy Trading, developing integrated integrated developing Energy Trading, EPCO Tohoku At Solutions meet to the needs of the customers and servecommunities we To date, the date, Group has advancedTo management based Electric on the Tohoku Power Group Medium-term ManagementFacing Policya changing (FY2017–2020). business environment, including the deregulation retail of electricity sales, havewe pushed ahead with initiatives tackling by the challenge sustained of growth by framing change as opportunity. havefocused We onthe following three solutions points: meet 1. to the needs the of customers and communities serve; we seeking 2. new business growth opportunities; and establishing 3. solid business foundations through transformation. will We apply the results the of Medium-term Management Policyand the expertise gained from its formulation and implementation business a move toward to model transformation and the realization the of ideal set forthin the ElectricTohoku Power Group Medium-/Long-Term Vision. 01 Enhancing cost competitiveness via an optimal power power optimal an via competitiveness cost Enhancing portfolio Work to move closer to a low-carbon society transmission/ efficiencyof and Stable supply distribution business Contributing to the revitalization and prosperity of communitieslocal Proposals to meet customer needs customer meet Proposals to Efforts to reinforce the safety of nuclear power stations Focal point Focal communities through the Machizukuri Genki Juku® Juku® Genki Machizukuri the through communities programs Tohoku- community the and development Support Revitalization Niigata Program addition to advancing efficiency based on drones and drones and efficiencybased on advancing to addition state-of-the-artother technologies, enhancing preventive measures and our resilience to respond to response effective enabling thereby emergencies, rapid disaster recovery and other areas home users; proposing a wide range of services beyond electrical power based on the Sou, Yori, Chikara + ONe corporate servicesfor full-fledged approach; launching users under our proprietary exEMS energy management system measures for both nuclear power plants at Onagawa Higashidori modifyand permission obtaining and to reactor equipment at Unit No. 2 of the Onagawa plant; thermoelectric aging suspending operations at power economic and environmental low offer which plants, construction forward the with moving while efficiency, of Unit No. 3 at Noshiro and Unit No. 1 at Joetsu 3 4 5 6 1 2 Implementing initiatives to revitalize and develop develop and revitalize to initiatives Implementing In the power transmission distribution business, and in power the In Proposing optimal rate plans; enhancing Web services for Inthe area of power sources, advancing safety

Measures related to Initiatives and results

Looking Back over the Tohoku Electric Medium-term Group’s ManagementLooking the Power Back over Tohoku (FY2017–2020) Policy focal points

Tohoku Electric Power Group Progress on Business Financial Corporate Introduction Message from About Tohoku Electric Our Vision Strategies Foundations to Support Top Management Power Group Corporate Value Creation Information Information 23 Revision to the standards for facility facility for standards the to Revision standards work the to Revision Expansion of competitive bidding competitive Expansion of Concentration and leveling of orders outsiders with procurement Joint suppliers overseas in Increase others and specification design, to Revision maintenance Three focal points (including revision to proprietary to (including revision work specifications, high specifications, processes) and specifications for the Procurement Reform Committee Reform Procurement the for to be methods purchase amount of purchased purchasing Change the Change the Change items items Change In July 2013, to reduce to procurementIn July 2013, costs for supplies, materials, and services provided—an important pillar of cost structural reforms—we established the Procurement advancing with charged is body This Committee. Reform various measures in line with the three focal points of purchasing methods, items purchased, and volumes purchased. During Phase III, which to began in June 2019, achieve further improvements in management efficiency and competitive strengthsand in light the of intensifying competition accompanying the deregulation retail of is committee this developments, electricity other sales and advancing cost savings building by on its initiatives date, to stability. supply and safety prioritizing while (Unit: 100 million yen) million (Unit: 100 Specific measuresSpecific Specific initiatives Specific Systemizing measures studied and implemented to to implemented and studied measures Systemizing date and converting them into organizational knowledge Deployment of training programs at frontline etc. worksites, Enhancing measures under the three focal points focal three the under measures Enhancing supplier intelligence Utilizing etc. technologies, new Utilizing * On average during the cost calculation period (FY2013 FY2015) to FY2021 Short-term and spot purchase contracts for LNG, increase in coal procurement from short distance sources, continued procurement of coal with high economic efficiency and increase in operation of high facilities generation power efficiency thermal for work of scope the of monitoring close technologies, new of Introduction machinery on studies methods, and specifications work rationalizing replacement of timing optimize to deterioration Close monitoring of the scope of repairwork based on strict reviews of and cycles inspection and work of revision deterioration, facility specifications work of rationalization Revision of details and specifications, and reduction of prices for partners business other and affiliates from procurement Reduction of wages and allowances for employees, reduction of recruitment for cutting personnel expenses and revision welfare to programs FY2020 95 316 135 190 403 1,139 Intensification of cost cost of Intensification Schedule envisioned related to procurement to related Expansion of rank- and boost cost competitiveness cost boost reduction measures to further to measures reduction programs to enhance skills department-specific training FY2019 Amount incorporated incorporated Amount to raise electricity rates when securing permission permission securing when 175 192 188 270 833 1,658 FY2019 efficiency improvements We considerWe it vital advance to comprehensive efficiency improvements in all businesses, of starting efficiency improvements with realized thoroughgoing together Network Power enhancementsElectric Tohoku of and competitive Power Electric strength through Tohoku FY2019, In business. electricity supply the in reforms structural billion165.8 yen, surpassing billion average) yen (FY2013–2015 incorporated the improvement 113.9 of when obtained we permission raise to electricity rates. consideration cost reductioncost competitiveness Strengthening of Strengthening of Action subject to Total Repair Repair to capital capital to investment expenses expenses Personnel Personnel purchased organizational capabilities, Enhancing actions to boost boost to actions Enhancing pave the way for continuous Other expenses Fuel cost and systems and infrastructure to Expenses related Expenses related electricity cost Future topics of consideration of topics and scheduleFuture Results of efficiency improvements in in efficiencyResults of improvements FY2019 Results of Efficiency Improvements in FY2019

Tohoku Electric Power Group Progress on Business Financial Corporate Introduction Message from About Tohoku Electric Our Vision Strategies Foundations to Support Top Management Power Group Corporate Value Creation Information Information 24 risk factorsrisk Anticipated downside downside Anticipated to downside risks through the We willWe respond appropriately key measures indicated at left. Decreased profitability dueto competition intensifying supply the on changes Structural competitive (decreased side strength of thermal power large- accompanying sources) scale adoption of renewable energy enhancements in profitability in enhancements Sales strategies targetingSales profitability financial targets through comprehensive financial targetscomprehensive through Making steady progress toward achieving Comprehensive review of business processes Maximum use of and improving supply capabilities supply improving and Maximum of use Comprehensive expense reductions through teleconferencing, teleconferencing, through reductions expense Comprehensive shifting paperless to offices, and other measures decision-making, accelerating hours, working total Cutting and controlling staffingto reduce labor costs by advancing workstyle reforms and improving business process efficiency Transformation a sales to approach with a greater emphasis on capacity generate to cash flow (within and beyond our major regions in both retail and wholesale sales) by businesses growth promote to staffing Enhancing improving efficiency in sales and back-office operations demand and supply via flexible fuel procurement and trading suspending by costs generation power reducing functions; facilities power thermal aging decommissioning and Enhancing competitive strengths in power supply by optimizing optimizing by supply power in strengths competitive Enhancing Keys to achieving financial targets financial achieving to Keys To make steadyTo progress toward our financial targets, we planto move forward with bold structural reforms in the electricity supply business while advancing sales strategies that stress the generation of cash flow and profits, thereby implementing cost savings on a scale of tens of billions of yenin both variable and fixed costs. Targeting Targeting Ideal state Ideal continuing and and continuing sustained growth sustained society smart society Businesses to to Businesses realize a smart models to realize a Transforming business Transforming FY2024 320 billion yen billion 320 Achieving at least at Achieving In addition to securing stable revenue through comprehensive enhancements in competitive strengths through structural reforms of our core electricity supply core our of reforms structural through strengths competitive in enhancements comprehensive through revenue stable securing to addition In business, Electric the Tohoku Power Group will take on the challenge business of growth help to realize a smart societystrategically by investing management resources dramatically to transform our own business model. Success in this endeavor will require certain a To increase cash our ability flow. to generate cash flow, establishedwe’ve a financial target (indicator)for returns on consolidated In cashaddition flow. to achieving returns on consolidated cash offlow at 320least billion yen andin building FY2024 the foundations for the sustainable generation cash of flowover the longterm, we will seek not justto realize continuing and sustained growth, but generate to stable returns our to diverse stakeholders. Improving the profitability of the help contribute to a smart society supply supply (Actual) business FY2018 Electricity Electricity business model allowing businesses to businesses to allowing business model Other (e.g., electricity supply business and building a a electricity building business and supply construction) 300 yen billion Return on consolidated cash flow = operating income + depreciation + impairment+ + depreciation income operating = cash flow consolidated on Return loss on nuclear fuel + investment gain on equity method (Operating income does not include the effects of the time lag in the fuel cost adjustment system.) Return on consolidated cash flow is calculated as follows: We faceWe the pressing need improve to our ability generate to cash flow dueto intensifying competition and changes in the demand and supply structure. Cash flow is also an essential aspect of promoting future growth businesses. since However, accounting profits such as ordinary income entail significant costs, including depreciation, that do not involve positive cash we flow, have been unableto properly gauge our ability generate to cash For flow. this reason, we’ve established the new financial target: flow. cash consolidated on return Based on the levels of cash needed maintain to stable supply, invest in new growth fields, pay various costs, and provide returns our to diverse stakeholders, set we’ve a target of returns on consolidated cash flow of 320 billion yen in as theFY2024 minimum we must achieve. Financial targets Financial About return on consolidated cash flow Qualitative Goals (Financial Goals Qualitative Targets) cash flow Returns on on Returns consolidated consolidated

Tohoku Electric Power Group Introduction

The Tohoku Electric Power Group’s Value Chain

Each and every member of the Tohoku Electric Power Group is continuing to provide various services related to activities ranging from fuel procurement to retail sales Top Management

of electricity and advancing our project to transform the business model through the deployment of businesses that will bring us closer to realizing a smart society Message from while demonstrating the Group’s comprehensive capabilities in accordance with the Tohoku Electric Power Group Medium-/Long-Term Vision.

Electricity supply business Businesses to realize a smart society

Thermal Electric Tohoku About

Electricity Power transmission & Group Power Fuel procurement Nuclear Trading Electricity retail sales wholesaling distribution Renewables Pursuing an optimal Maximizing value for the Fuel procurement with Growing profits by power source structure Maintain a stable power customer by establishing a consideration for maximizing the value of in light of the S+3E supply. comfortable, safe, reliable smart efficiency, flexibility, etc. electricity approach society Our Vision In addition to expanding marketing functions to enhance competitive strengths Building an optimal power In addition to growing profits In addition to managing power in retail electricity sales while demonstrating Reducing fuel costs and source structure to achieve by maximizing the value of transmission & distribution comprehensive abilities in cooperation with securing fuel procurement energy security, economic electricity, we will make full networks to contribute to Main other Group members, we deploy a diverse flexibility through diversification efficiency, and environmental use of trading functions to stable power supplies while range of services and initiatives to maximize initiatives of procurement methods and performance simultaneously, explore and advance services improving their efficiency, we

value for the customer and contribute to Strategies other methods based on the safety-first for increased added value of will improve disaster resilience solutions to social issues, taking on the principle electricity wholesaling. and preventive measures. challenge of swiftly generating new value and transforming our business model.

Tohoku Electric Power, Tohoku Tohoku Electric Power Network Corporate Value Creation

Tohoku Electric Power Support to Foundations

Main related Progress on Business Tohoku Electric Power Sustainable & Renewable Tohoku Power Transmission Tohoku Electric Power, Tohoku Energy Tohoku EPCO Energy Trading companies NIHONKAI LNG Energy, Tohoku Electric Power and Distribution Service Service, Yurtec, Tohoku Intelligent See p. 86 for a list of Engineering & Construction, Synergia Power Telecommunication, HNK, E life-Partners, Group member Tohoku Natural Gas Yurtec SAKATA KYODO POWER, Tokyu Power Supply ELTAS TOHOKU companies. JOBAN JOINT POWER Kitanihon Electric Cable

Main sources of imported Ratios of power generation Synergia Power Average frequency and Yori, Sou eNet members fuel used for power capacity (including power received Trends in contracted capacity (10,000 kW) length of power failures per from other companies) 80 generation 65 customer household Hydroelectric Coal Gas Oil 60

Length Frequency Information Crude oil: Indonesia Nuclear New energy 40 Financial (Minutes) (Times) Tohoku Electric Power Group 27 684,100 3,000 20 14 17 3,000 Impact of the Great East 1.2 Coal: Indonesia, China, Japan Earthquake 0 Russia, Canada, US End of End of End of End of 2,900 1.0 547,000 Topics FY2016 FY2017 FY2018 FY2019 LNG: Mozambique, Qatar, 2,000 Tokyu Power Supply 600 0.8 Malaysia, Indonesia, Trends in (electricity) Russia, US 30 contracts (10,000 contracts) 450 0.6 23.4

1,000 Information 20 18.4 300 0.4 Corporate Uranium: Niger, 14.2 Kazakhstan, 10 9.4 150 0.2 Canada 0 0 0 0 2017 2018 2019 End of End of End of End of (FY) FY2016 FY2017 FY2018 FY2019 FY2008 FY2019 End of March End of March 2019 2020 See “Fuel procurement, See “Corporate information,” See “Wholesaling,” p. 37. See “Performance Data”, ESG thermal power,” p. 29. p. 85. Databook p. 35-37. 26 Progress on Business Financial Corporate Introduction Message from About Tohoku Electric Our Vision Strategies Foundations to Support Top Management Power Group Corporate Value Creation Information Information 27 corporate value creation value corporate Taking on the challenge posed by the need evolveto into businesses supplying various services, based on electricity, maximize to value for the customer creation value corporate Enhancing capabilities putting while management resources effective to use, stressing ESG value corporate maximize to perspectives, Advancing structural reforms in the fields various in business electricity supply maximizeto business efficiency and the electricity of value Medium-/Long-Term VisionMedium-/Long-Term Group FY2020 Medium-Term Plan Medium-Term FY2020 Group reforms in the electricity the business supply in reforms for businesses to realize a smart society 2 3 1 Focal points move to closer the to ideal Change Focal point Focal points of Electric the Tohoku Power Focal point Foreal point Creation Challenges Evolving the management foundations supporting foundations management the Evolving described in Electric the Tohoku Power Group Enhancing competitive strengths through comprehensive comprehensive strengths through competitive Enhancing Taking on the challenge of swiftly achieving profitability swiftly achieving of challenge the on Taking Based on the three Cs of addressing change, moving tackling challenges, creating value, and forward swiftly to achieve profitability in businesses to realize a smart society while advancing structural reforms in the electricity supply business, freed from the conventional outlook of an age in which the ultimate performance parameter was total business transformation. model advance costs, to high Very Business model transformation in transformation in response the to four Ds Ideal Vision startingTohoku in Power GroupPower growing in step with A group of companies Tohoku Electric Tohoku by helpingby to establish a sustained societal progress progress societal sustained smart society for a new age, Medium-/Long-Term Medium-/Long-Term sales Perspectives of GroupPerspectives businesses of Business importanceBusiness supply ctricity demand and Responding to increased increased to Responding Structural changes in ele deregulation of retail electricity retail of deregulation adoption of renewable energy and and energy renewable of adoption high Very Societal significance communities inequality, etc. inequality, Climate change, poverty shrinking and aging Achieving the SDGs the Achieving Building SocietyBuilding 5.0 economic growth, rectifying growth, economic Maintaining local society and and society local Maintaining in other parts of Japan. Alongside) eradication, education, health, health, education, eradication, Social issues posed a by perspectives Reflecting the importanceof balancing social and business objectives,Tohoku Electric the Power Group Medium-/Long-Term Vision callsfor the Groupto contribute to establishing a smart society for a new era,starting and grow alongside to in Tohoku, sustained societal progress. The aim generate is to solutions social to issues through our businesses. realize this ideal, To under Electric the Tohoku Power Group Plan plan FY2020 we Medium-Term make to progress on structural reforms in the electricity supply business and achieve profitability swiftlyto realize a smart society, based on the threefocal pointsof addressing change, tackling challenges, and creating value. population are population emerging in this region more rapidly than Management Philosophy Management Yori, Sou, ChikaraYori, Fundamentals of both (The Strength to Work with the Community the with The Tohoku Electric Power Group Group Power Electric Tohoku The Tohoku Electric Power Group Slogan Group Power Electric Tohoku Prosperity in Partnership Perspective of social issues Japan Niigata Tohoku, Tohoku, community International Focal points of the Tohoku Electric Power Group’s FY2020 Medium-Term Plan Electric FY2020 points Group’s Focal the of Power Medium-Term Tohoku

Tohoku Electric Power Group Progress on Business Financial Corporate Introduction Message from About Tohoku Electric Our Vision Strategies Foundations to Support Top Management Power Group Corporate Value Creation Information Information 28 P47 P57 P76 P37 P37 P46 P46 P46 P59 P55 P45 P40 P58 P53 P48 P44 P44 P35 P39 P34 P30 P64 P60 Related pages Related Related SDGs Related /kWh for 2 (thermal efficiency 63% or higher) emissions coefficient of 0.37 kg-CO 0.37 of coefficient emissions 2 (mainly wind power) wind (mainly Engaging in activities alongside customers and communities on a daily basis daily a on communities and customers alongside activities in Engaging Operations scheduled begin to in June 2023 Sustained initiatives to enhance corporate governance corporate enhance to initiatives Sustained Ethics/ Corporate the on based activities autonomous Deploying Plan Action Compliance Growing profits through alliances with gas providers, comprehensive comprehensive providers, gas with alliances through profits Growing efforts other and solutions, in sections creation business of formation and reorganization Corporate July 2020 Seeking achieve to a CO demonstrate can resources human diverse where workplaces Creating fullest the to abilities their reviewing operations, streamlining development, environmental ICT rules in-house Allowing the Tohoku Electric Power Group Safety and Security Policy to take firm root including risks, diverse increasingly to respond capacity to the Enhancing natural disasters and cyber risks Developing 2 million kW million 2 Developing Higashidori and 2 No. Unit Onagawa at operations of Swift resumption 1 No. Unit Supply chain optimization from procurement of fuel and powersources sales and generation power through Wholesaling Synergia to Power and Tokyu Power Supply, proactive trading market Improving disaster resilience of TohokuElectric Power Network, etc. in grid the operating facilities, of configuration efficient Developing business new deploying supply, and demand in changes to response Boosting customer satisfaction and profitability by bundling energy and services Strategic investment of management resources in growth businesses living enhancing and living smarter for solutions electrification Proposing support services Swift development of services assist to with strengthening community disaster resilience as well as energy conservation and cost savings community to solutions to contribute services mobility to Providing challenges Rapid development of services in areas such as decentralizedenergy and cells storage of installation the electricity business as a whole in FY2030 in whole a as business electricity the

Examples and summaries of measures (The Strength to Work Alongside) Work to (The Strength slogan among all Group employees Group all among slogan Moving forward with the development of Joetsu Unit No. 1 Enhancing corporate governance corporate Enhancing compliance Promoting Growing profits from natural gas sales functions creation business of Enhancement management environmental Advancing Embodiment of the Sou, Yori, Chikara diversity Promoting reforms workstyle Accelerating principle safety-first the on based culture corporate a Developing resilience Enhancing Proactive sales via electricity trading markets trading electricity via sales Proactive supplies Stable Advancing networks realize to a smart society through sales electricity retail in strengths competitive Enhanced means other and functions marketing enhanced business growth to resources management Shifting Deployment of the Sou, Yori, Chikara + ONe brand development business VPP initiatives Mobility energy decentralized to related services of Deployment Moving forward with the development of renewable energy renewable of development the with forward Moving plants power nuclear at operations of Swift resumption functions trading using optimization chain Supply The main measures be implemented to based on the three focal points Electric the of Tohoku Power Group Plan are FY2020 summarized Medium-Term These below. measures will help move us closer the SDGs, to as a socially responsible corporate group, in addition enhancing to competitive strengths in the electricity supply business and swiftly achieving profitabilityto realize a smart society. Evolving the management foundations supporting corporate creation value Taking on the challenge of swiftly profitabilityachieving for businesses to realize smart a society Enhancing competitive competitive Enhancing strengths through comprehensive reforms in the electricity supply business 3 2 1 Change Focal point Focal point Creation Foreal point Challenges Enhancing corporate value creation creation value corporate Enhancing capabilities putting while management resources effective to use, stressing ESG perspectives, maximize to value corporate Taking on the challenge posed by the need evolveto into businesses supplying various services, based on electricity, maximize to value for the customer Advancing structural reforms in the fields various in business electricity supply maximizeto business efficiency and the electricity of value List of Measures to Be Implemented under the Focal Points of of Points Focal the under Be Implemented Measures of List to Plan Medium-Term Group FY2020 Electric Power Tohoku the

Tohoku Electric Power Group Progress on Business Financial Corporate Introduction Message from About Tohoku Electric Our Vision Strategies Foundations to Support Top Management Power Group Corporate Value Creation Information Information 29 action Courses of Simulation of a coal vessel equipped equipped vessel coal a of Simulation equipment Challenger Wind with Procurement of natural gas shale including US, the in produced gas from the Cameron LNG project Sakura) Gas Diamond (tanker: US Canada Uranium LNG diversification of fuel procurement methods and other means other and methods procurement fuel of diversification plants power thermal aging decommissioning and sources technologies new through Cutting fuel costs and boosting fuel procurement flexibility through high-efficiency power developing strengths by competitive Enhancing operations plant power in efficiencyimprovements and advances Promoting We planWe moveto forward with the following initiatives as we seek enhance to competitive strengths and improve environmental performance, all in line with the principle. safety-first Coal Coal Oil Australia China Russia Malaysia Indonesia Kazakhstan Qatar Mozambique Full-fledged study in preparation for the adoption of coalvessels equipped with the Wind Challenger hard sail Together with Mitsui OSK Lines, launched we’ve a full-fledged joint study of Wind a hard with equipped system propulsion hybrid first world’s the technology, Challenger sail, on coal vessels. After verifying effects on loading, port entry/exit at coal loading ports, and greenhouse gas reductions when underway, the two companies will discuss the operational launch of the first ships equipped with Wind Challengertechnology beginning in AdoptingFY2022. this performance economic boost and impact environmental reduce to expected is equipment shipment. during use fuel reducing by Niger Main sources of imported power generating fuels imported sourcesMain of power With slow growth in domestic demand for electricity due to the shrinking population population shrinking the to electricity due for demand domestic in growth slow With and other factors, the competition for sales is intensifying due power to system reforms (including power market adjustments and the emergence of new electricity services). In addition, factors such as the growing adoption of renewable energy are generating increasingly tight controls on output from thermal power supplies and other impacts on the rate of use of our thermal the At power. same time, alongside stronger environmental regulations (under the Act on Sophisticated Methods of change climate Energy), of Use Rational the on Act the and Structures Supply Energy concerns continue as grow, seen to for example in the rise of ESG investment. Business Business environment Cutting fuel costs and boosting fuel fuel Cutting and costs boosting fuel procurement flexibility Ourfuel procurementis based on the concurrentpursuit stability. and flexibility, economy, of Operation thermal of power generation is undergoing dramatic changes due various to factors, including the growing adoption renewable of energy and utilization of wholesale electricity trading. For this reason, reduce to fuel costs and secure fuel procurement flexibility,we’re advancing various initiatives, including procurement that of suppliers diversification and conditions market reflects flexibility increase to Specifically, structures. pricing and in LNG procurement, expanding we’re use of economical and flexible short-term and spot contracts and expanding use contracts of for which destinations may be changed. For coal procurement, in addition to cutting transport costs increasing by use nearby of sources like Russia, pursuing we’re various efforts, we as coal, subbituminous low-ash procuring including move forward cut to costs in ash processing costs and areas. other also advancingWe’re efforts optimize to the supply chain from the procurement fuel of and power sources through power generation and sales while making full use market of trading functions (see 37). p. Electricity Supply Business: Fuel Procurement, Thermal Power Generation Electricity Supply Power Business:Thermal Procurement, Fuel

Tohoku Electric Power Group Progress on Business Financial Corporate Introduction Message from About Tohoku Electric Our Vision Strategies Foundations to Support Top Management Power Group Corporate Value Creation Information Information 30 (FY) 2023 power sources power the competitive competitive the Further boosting Further boosting 46.5 2019 strength of thermal (2019) (63 or more) Joetsu Unit No. 1 2015 60 or more Sendai Unit No. 4 No. Unit Sendai 58 approx. (LNG, 572,000 kW)

Trends in thermal efficiency of existing facilities existing of efficiency thermal in Trends (operating results for gas, coal, and oil thermal power generation) June 2023 of operation Commercial Joetsu Unit No. 1 planned begin to 55.8 2005 Higashi Niigata Unit Unit Niigata Higashi systemNo. 4-1 55.6 March 2021 March of suspension planned Long-term 1 No. Unit Minato Niigata Higashi (LNG, heavy oil, 350,000 kW) of suspension planned Long-term 2 No. Unit Minato Niigata Higashi (LNG, heavy oil, 350,000 kW) Shin-Sendai Unit No. 3 system No. 4-2 system 1995 Higashi Niigata Unit Unit Niigata Higashi 48.6 1985 (design value of rated output) No. 3 system October 2020 October Increased output on Higashi Niigata Unit system 4-1 (from 826,000 kW) 877,900 to condensation heat from water content of fuel and water generated by burning fuel Higashi Niigata Unit Unit Niigata Higashi * Low-level heat generation volume basis: volume of heat generated after subtracting subtracting after generated heat of volume basis: volume generation heat Low-level * March 2020 March closed 2 No. Unit Akita (heavy crude, 350,000 kW) 1975 Shin-Sendai Shin-Sendai 2 No. Unit 42.0 enter commercial commercial enter operation in Japan in operation First high-capacityFirst power generation to to generation power gas-combined cycle gas-combined cycle September 2019 September closed 3 No. Unit Akita (heavy crude, 350,000 kW) Trends in thermal efficiency of newly facilities constructed 40.4 No. 3 (%) 1965 Niigata Unit March 2020 March 50 55 40 35 45 65 60 Trends inTrends thermal efficiency of ourown thermal power plants generation heat volume) (based low-level on (coal, 600,000 kW) Commercial operation of of operation Commercial Noshiro Unit No. 3 began March 2019 March Akita Unit No. 5 closed (light oil, 333,000 kW) Unit Niigata Higashi No. 5 closed (LNG, 339,000 kW) Development Decommissioning Status of thermal power plants in power source development plans emissions, with the goal 2 Unit No. 1 at the Joetsu Thermal Power unit) completed of depiction (artist’s Plant Hachinohe (LNG)Hachinohe Sendai (natural gas) (natural Sendai Haramachi (coal) Haramachi Shin-Sendai (LNG)Shin-Sendai Nakoso (coal)Nakoso Shinchi (coal)Shinchi Akita (oil) Noshiro (coal) Noshiro Sakata (coal) Sakata (LNG, etc.) Niigata Niigata of realizing a world-leading thermal efficiency of 63% or better for gas equipment. generation power cycle combined In addition, sinceit takes less time startto up than conventional gas flexibly can and equipment turbine cope with output adjustment, startup, operations other and suspension, in response power to demand, we expect it contribute to the to stable electricity. of supply Unit No. 1 at the Joetsu Thermal Plant Power Construction of the new Unit No. 1 at the Joetsu Thermal Power Plant began Plansin May call 2019. for Joetsu Unit come No. 1 to online in June 2023. Powered by LNG, Joetsu Unit No. 1 will employ a next-generation gas developed jointly system combustor air-cooled forced a adopting turbine with Mitsubishi Hitachi Power Systems, (now Ltd. Mitsubishi Ltd.). Power, This technology was recognized Energy-Efficient by a 2018 Machinery Award from the Minister of Economy, and Trade Industry. This unit is environmental lower and benefits economic high both achieve to designed CO and consumption fuel reducing by impact Higashi Niigata Niigata Higashi (natural gas)(natural Joetsu (LNG)Joetsu Our thermal power plants plants power thermal Our Joint thermal power plants power thermal Joint The Noshiro Thermal Power Plant’s Unit No. 3 came online inMarch 2020. (USC) ultra-supercritical Employing technology and by boosting steam temperatures, Noshiro Unit No. 3 has achieved thermal efficiency of 46%, among the world’s highest levels of thermal efficiency recordedto date (based on low- level heat generation volume) for coal-fired equipment. generation power Unit No. 3 atthe Noshiro Thermal Power Plant Unit No. 3 at the Noshiro Thermal Power Plant In addition steady to progress on developing we’re plants, thermal power high-efficiency decommissioning suspending and also old and inefficient thermal power plants, enhancing competitive strengths in power sources, and responding fluctuations to in accompanying supply and demand power the growing adoption renewable of energy. Enhancing competitive strengths in Enhancing competitive generation power thermal Electricity Supply Business: Fuel Procurement, Thermal Power Generation Electricity Supply Power Business:Thermal Procurement, Fuel

Tohoku Electric Power Group Progress on Business Financial Corporate Introduction Message from About Tohoku Electric Our Vision Strategies Foundations to Support Top Management Power Group Corporate Value Creation Information Information 31 Signs Signs indicating indicating an anomaly an Detecting anomalies anomalies Detecting through real-time analysis real-time through (Indonesia) Power wide range of general applications general of range wide Tohoku Tohoku Electric state-of-the-art digital technologies for a a for technologies digital state-of-the-art Tohoku Electric Power’s high-performance, Power’s Electric Tohoku Lantau Dedap Geothermal Power Project Power Geothermal Dedap Lantau

10 120 223 associated negative costs negative associated anomalies Equipment Equipment operating dataoperating Notice of signs of (thousand kW) Our share of output Advanced equipment monitoring services equipment monitoring Advanced (targeting 2021) roughly commercialization by Early detection of equipment anomalies and minimizing anomalies minimizing equipment and Early of detection 98 1,200 2,233 Output Expertise with operations and Customers maintenance of a broad range of (thousand kW) on more than 60 years of experience equipment at thermal power plants based based plants power thermal at equipment Country Of these, believe we that systems for early detection signs of equipment of anomalies will contribute safety to and stable operations not just for our own power plants, but for customers with their own power generation equipment, as well as customers in various manufacturing industries. For this reason, in preparation for external sales advanced of equipment monitoring services utilizing these working systems, we’re with Group members Electric Intelligent and Tohoku Ltd. Tsuken Ind. Co., Telecommunication Co., developInc. to related businesses making roughly by full use 2021, Group of strengths. Mexico Vietnam Indonesia Utilization Project Project Project Nghi Son 2 Coal Power Plant Falcon Gas Thermal IPP Project Lantau Dedap Geothermal Power Projects in which invested have we and participate conventional monitoring methods monitoring conventional of serious equipment anomalies equipment serious of Allows early detection and elimination Results of adoption of Results adoption of Results Capacity to detect unknown anomalies unknown detect to Capacity Earlier detection of anomalies than than anomalies of detection Earlier Achieved capacity increase to thermal levels 0.1% at analysis through efficiency Alarm Signs of a problem a of Signs values current target Comparison of of Comparison values and actual accordance with with accordance values and actual operating results in Comparison of base operating conditions operating data Actual results operating operating Equipment Base values Overseas power generation business generation power Overseas appliedWe’ve the technologies, experience, andother resources gathered in Japan in activities related the to power generation world. the around opportunities business pursuing in business planWe press to forward launch to the commercial operation and stable utilization of projects in which we have invested and worldwide. participated In development and planning for renewable energy and businesses realize to smart a society, we will make full use of the expertise, personnel networks, and other resources accumulated dateto in our overseas power generation operations. Systems to increase thermalSystemsto modifying efficiencyby operating conditions technologies) (applying IoT Systems for early detection of signs of equipment anomalies (utilizing Data Big analysis technologies) Advancements in the operation of thermal power plants operation thermal the of in Advancements power Seeking boost to operational efficiencyof thermal power plants still further,we’re adopting advanced digital technologies like Big Data analysis and IoT. moved forward we’ve in advanced joint verificationSince 2017, effortsToshiba with Energy Systems & Solutions Corporation for the following two systems, which are intended contribute to the early to detection equipment of anomalies and increased thermal efficiency. Through deployed Marchwe’ve 2020, and launched these systems at all thermal units power plants at eight (16 plants). Electricity Supply Business: Fuel Procurement, Thermal Power Generation Electricity Supply Power Business:Thermal Procurement, Fuel

Tohoku Electric Power Group Progress on Business Financial Corporate Introduction Message from About Tohoku Electric Our Vision Strategies Foundations to Support Top Management Power Group Corporate Value Creation Information Information 32 driving growth in customer demand for renewable energy— as seen, for example, in initiative. the case the of RE100 In light these of circumstances and other considerations, consider we renewable energy be an to integral part our of portfolio power of sources, and we’re continuing expand to and accelerate associated developments. In announced we January the 2019, target developing of 2 million kW capacity of from renewables, centered chiefly on wind power, in the six prefecturesTohoku and in Niigata Prefecture. We currently participate in numerous projects, including onshore and offshore wind power as well as solar among otherpower, proactive initiatives in this field. A fundamental tenet our of movement forward with renewable energy development is our desire remain to a Tohoku six the In operator. business responsible prefectures and in Niigata Prefecture, which offer high potential for renewable energy development, numerous businesses are launching efforts develop to renewable energy sources. Whilethis high potential is creating intense competition, believe, we as a Group with a solid business foundation in the region, that must we participate not just in development, but throughout the lifecycle renewable of power generation, including operations and maintenance, replacement. and decommissioning, By moving forward with comprehensive initiatives based on the close ties and relationships trustof established to date with our customers and communities in our business operations will we date, to establish a solid position for the Group as a responsible business operator in renewableenergy. This in turn will serve as a driving force realizing toward our ideal being of a Group that helps establish a smart society for the new age, starting from Tohoku—a Group that grows alongside society. within progress sustained Our network hydroelectric 227 of power plants and a roughly 45% share nationwide Japan’s of geothermal power generating capacity testify the progress our renewable developing in made predecessors have reached we’ve a true turningenergy. point Today, in renewable energy. In addition improvements to in cost competitiveness made possible technological by advances, convinced I’m environmental concerns are Accelerating renewable energy renewable Accelerating asa responsible development business operator Director and Managing Executive Officer/General Sales Company Generation and Power Manager, Tohoku Electric Power Co., Inc. The motto our of first President, Ungoro Uchigasaki, when Electric Tohoku Power was founded in 1951, called for “Rebuilding Japan starting and in Tohoku Inspired power.” electric startingwith Tohoku developing thisby belief, the Company developed hydroelectric Thus, in a sense,power. the tradition renewable of energy can be traced all the back way the origins to of Electricthe Tohoku Power Group. Electricity Energy Supply Business: Renewable

Tohoku Electric Power Group Progress on Business Financial Corporate Introduction Message from About Tohoku Electric Our Vision Strategies Foundations to Support Top Management Power Group Corporate Value Creation Information Information 33 action Courses of approach, the wind power in the northern area, Tohoku as well 2 1 To be a responsibleTo operator of renewable energy in the six Tohoku prefectures and in Niigata Prefecture, aiming we’re develop to 2 million kW of capacity through new development and new businesses throughout all spheres of with biomass, and geothermal, solar, hydroelectric, including energy, renewable a primary focus on wind In development power. efforts, we will capitalize on our wealth of knowledge and experience, established overmany years of doing we forward, Moving electricity communities. local alongside business providing will accelerate our efforts further to expand the use of renewable energy. high-voltage grid when connecting power generation facilities and other facilities to the electrical grid electrical the to facilities other and facilities generation power connecting when grid high-voltage conditions Renewableenergy has been rapidly adopted across Japan under the feed-in tariff program. Thanks the large to number locations of exposed strong to wind, the region consisting the of prefectures six Tohoku and Niigata Prefecture is ideally suited wind to In considerationpower. factors of such as capacity connected the grid to date and to process* bidding the through enhancements grid *1 System*1 for soliciting bids from companies that will share in the cost of costly grid enhancements required for the restrictive certain under connection permit to grid electrical the on capacity available of use flexible makes that System *2 Wind generation power and Niigata potential in Tohoku generating potential in the prefectures six Tohoku and in Niigata Prefecture is estimated be approximatelyto million based 10 kW, on wind power facilities currently operating and new facilities in the pipeline. as future progress with the connect and manage* (as of March 2020) 31, Geothermal power The Group holds a significant share (roughly 45%) of Japan’s geothermal power nationwide capacity generating Hydroelectric power The Group owns facilities 227 The six Tohoku prefectures and Niigata Prefecture are homerich to renewable energy resources, including hydroelectric, geothermal, and wind Havingpower. positioned renewable energy sources as key sources of electricity for the future, moving we’re forward with development leveraging these geographical resources. the At same time, we must pay close attention trends to in companies numerous the to addition in example, For policy. and competition prefectures Tohoku six the in projects development and planning in participating and in Niigata Prefecture, centered on wind the power, government is also making revisions of policies support to renewable energy adoption. must We proceed with renewable energy development based on the precondition of maintaining relationships of trust with the community while also considering matters such as growing customer needs. Business Business environment State of initiatives of State advanced we’ve hydroelectricSince our founding power development in 1951, in the RiverTadami (Fukushima Prefecture) watershed and elsewhere. Currently, the Group hydroelectricowns 227 power plants and a large share (roughly 45%) Japan’s of nationwide geothermal power generating active in capacity. solar We’re power as well, Haramachi. and Sendai, Hachinohe, in facilities megasolar established having Given the limited number locations of at which new hydroelectric and geothermal power generation facilities can be developed, striving carry we’re to out new development while closely monitoring business potential. putting In addition, we’re existing power plants more to effective use repairing by aged equipment and other measures. Electricity Environment Energy Business Supply Business: Renewable

Tohoku Electric Power Group Progress on Business Financial Corporate Introduction Message from About Tohoku Electric Our Vision Strategies Foundations to Support Top Management Power Group Corporate Value Creation Information Information 34 (as of September 30, 2020) Shichinohe-Towada Oritsumedake S. 1 Inaniwa-Takko Inaniwa Noshiro-Yamamoto wide area wide Noshiro-Yamamoto Solar Osato solar Osato Shiroishi-Kosugo S. Abukuma CentralTabito Wind Farm

Geothermal Geothermal

Hydroelectric Hydroelectric

Fukaura Wind Wind (including development feasibility(including studies) development Tsugaru offshore Tsugaru Tamagawa No. 2 Kijiyama-Shitanotai To date, includingTo our participation inexisting projects, developed we’ve sites 18 (output capacity: million 2.66 kW). will We continue work to toward our goals by and development in-house through energy renewable expanding and adopting industry. the within companies leading other efforts with joint Northern offshore Akita Yurihonjo coast offshore coast Yurihonjo Tsuruoka-Hachimoriyama Major renewable energy renewable Major development/participation projects Happo-Noshiro coast offshore coast Happo-Noshiro Akita port/NoshiroAkita port offshore Progress Department Hydropower Department Thermal Power Power Generation and Sales Company Renewable Renewable Department Energy Business Costs can be expected fall to with technological development. Variable costs are low. emissions gas greenhouse of free and Eco-friendly Abundant resources available in the six Tohoku prefectures and in Niigata Prefecture strength potential Regional Regional Competitive Competitive performance Cooperation Environmental Environmental expertise in hydroelectric, solar, geothermal, and biomass power, with a primary a with power, biomass and geothermal, solar, hydroelectric, in expertise focus on wind power consideration for efforts in areas such as operation and maintenance (O&M) and replacement source power New development and new business participation drawing on our accumulated accumulated our on drawing participation business new and development New Participating in all aspects of the renewable energy life cycle with due Integral part our of future power source portfolio Developing 2 million kW of capacity mainly in the six prefectures Tohoku and in Niigata Prefecture, with a primary focus on wind power believeWe achieving our development goal will require investment of more than billion100 yen. we anticipate For now, investment on a scale of roughly 10–20 billion yen/year. will We select our investment targets with care, seeking those that will generate returns on consolidated cash flow after identifying their potential. business internal an previously Department, Business Energy Renewable the on Centered section of theGroup Business Department but spun off into an independent section under the Power Generation and Sales Company in July we will 2020, basis. groupwide integrated an on energy renewable expand and adopt Group companies Initiative Initiative methods Positioning Positioning as power source Goal Scale of investment Business structure Outlook on and progress in initiatives to date date Outlook and to on progress initiatives in From perspectives ranging from improving energy security environmental to compatibility, Electric Tohoku Power sees renewable energy as an integral component its of portfolio power of sources. Asa responsible business the Groupoperator, is working develop to renewable energy in the prefectures six Tohoku and in Niigata Prefecture. Electricity Energy Supply Business: Renewable

Tohoku Electric Power Group Progress on Business Financial Corporate Introduction Message from About Tohoku Electric Our Vision Strategies Foundations to Support Top Management Power Group Corporate Value Creation Information Information 35 action Continuation Courses of Resumption Resumption operation of Visiting all households in the the in households all Visiting community (Higashidori Plant) Power Nuclear Permit Operator inspection inspection before use before See ESG Data Book, pp. 16–18. Permit Drill involving use of mobile supply to generators power Nuclear (Onagawa power Power Plant) Now (September 2020) submitted February 2020 26, Permit Written amendments amendments Written Onagawa Nuclear Power Power Nuclear Onagawa Plant, where safety underway is construction Public comment comment solicitation (BWR) (BWR) (BWR) Type Commission Onagawa Nuclear Power Plant) Power Nuclear Onagawa Boiling water Boiling water Boiling water reactor reactor reactor reactor reactor Nuclear RegulatoryNuclear report of draft inspection inspection In addition accelerating to efforts achieve to rapid resumption ofnuclear power plant operations, based on the paramount precondition of safety, we will continueimprove to cost savings and operating efficiencyto enhance our competitive strengths. willWe also make steady progress on decommissioning Unit No. 1 at Onagawa. Preparation Preparation Understanding residents local of July 2002 1995 2005 Date January January began operation operation December December Written submitted amendments amendments 825 825 1,100 output output Electricity (thousand kW)(thousand Unit No. 2 No. Unit Unit No. 1 No. Unit Unit No. 3 No. Unit inspection (Activities to further dialogue with local residents on topics like the need for nuclear power plants and safety measures at the the at measures safety and plants power nuclear for need the like topics on residents local with further dialogue to (Activities Earthquake/tsunami Construction plan permit (detailed permit Construction plan design) (organization, permit change management) regulation Safety operation Permit to change nuclear reactor equipment (basic equipment reactor nuclear change design) to Permit

Plant (facility)Plant inspection Plant Plant 2 3 1 Power Nuclear Nuclear Higashidori Higashidori Onagawa December application 2013: 27, Nuclear Power Power Nuclear Our nuclear plants power steps of resumptionFlow toward operations of Onagawa of Unit 2 No. Formulated in Japan’s national July 2018, basic energy plan identifies a policy of reducing reliance on nuclear power as much as possible. it However, also power important baseload as operations plant power nuclear resuming for calls sources, with a top priority on safety. Amid intensifying competition accompanying progress on reforms of the electric power system, enhance to competitive strengths, we must continue improve to in cost savings and operating efficiency, based on the paramount precondition of safety, in nuclear power. Business Business environment We’re moving forwardWe’re with Companywide initiatives to in standards regulatory new with compliance review preparation for the resumptionnuclear of power plant operations. In February received we 2020, a permit from the Nuclear reactor the change to Commission Regulatory equipment at Unit 2 at the No. Onagawa Nuclear Power Plant. will We continue responding appropriately to inspections related construction to plan permits and other matters. also set the We’ve goal completing of safety-related construction during FY2022. For Unit 1 at the No. Higashidori Nuclear Power Plant, finishedwe’ve respondingto inspections relatedto seismic fault assessments. An inspection is currently underway to assess base seismic vibrations and base tsunami resistance. will We continue making every effort to complete these inspections at the earliest possible date. aim resumeWe to operation once all preparations are complete, not just in relation compliance to with new regulatory standards, but also as regards achieving greater nuclear power plant safety and securing the local residents. of consent understanding and Initiatives to resume nuclear to Initiatives plant operations power Electricity Supply Business: Power Nuclear

Tohoku Electric Power Group Progress on Business Financial Corporate Introduction Message from About Tohoku Electric Our Vision Strategies Foundations to Support Top Management Power Group Corporate Value Creation Information Information 36 11 Hydroelectric Stage 4 Stage 10 years structures and structures and Demolition and and Demolition (through FY2053) (through 13 removal of buildings buildings of removal Geothermal period for buildings and and buildings for period Demolition and removal 19 Source: “2018 General Nuclear Nuclear General “2018 Source: Power Pamphlet,” Japan Atomic Organization Relations Energy Nuclear /kWh) 2 26 Stage 3 Stage 9 years Wind emissions are calculated for all 2 (through FY2043) (through in the reactor zone reactor the in the reactor zone reactor the (g-CO Demolition and removal period for equipment in in equipment for period Demolition and removal Fuel consumption in power generation power in consumption Fuel 38 Solar energy consumed, from extraction of raw power of construction the to materials transport, fuel facilities, other and generating refining, operations, and maintenance, in generation. power for consumed fuel to addition Note: CO Removal of contamination of Removal 98 radiation management zone zone management radiation 474 (outside nuclear reactor zone) reactor nuclear (outside (combined) Natural gas gas Natural Stage 2 Stage 7 years (through FY2034) (through Treatment and disposal of radioactive waste Demolition and removal of equipment inside the period for equipment equipment for period near the reactor zone reactor the near 123 599 Demolition and removal removal and Demolition Equipment, operation operation Equipment, (thermal) Natural gas gas Natural 43 Oil 738 Demolition and removal of equipment outside the radiation management zone management radiation the outside equipment of removal and Demolition thermal Safe storage Safe Turbine building Turbine Stage 1 Stage 8 years Fuel removal Fuel (FY 2020–2027) 79 943 Coal demolition work demolition thermal Nuclear reactor building reactor Nuclear Contamination inspection Contamination Preparatory period for emissions of various power sources 2 0 200 400 800 600 1,000 CO each stage Category of work in Main tasks Main The decommissioningThe process ). E Details ), and economic performance ( E ) as a major consideration: stable energy supply (energy S Decommissioning plan approved plan Decommissioning Received answers advance to discussions with Miyagi Prefecture, the plan town decommissioning of Onagawa, the of approval for application on Ishinomaki of city the and (approval) begins. work Decommissioning Decision made on decommissioning on made Decision terminated Operation Requested advance discussions with Miyagi Prefecture, the town of Onagawa, and plan decommissioning the the of approval for application on Ishinomaki of city plan decommissioning the for approval for Applied , environmental safeguards ( ) E ( July 29, 2019 July 26, 2019 July 28, 2020 Date May 2020 22, From a 3E perspective, view we nuclear power making as power a key source. We’re every effort advance to compliance with new regulatory standards and integrate safety measures permit to the rapid resumption nuclear of power plant operations. Why nuclear power? As a nation with limited energy resources, Japan relies on imports for most fossil fuels such as oil, coal, and natural gas. Its energy self-sufficiency is quite low comparedto other in This FY2018). industrialized makes it especially nations (11.8% important to target balanced a energy mix that can achieve, atthe sametime, the S+3E objectives while securing safety ( security) March 2020 18, October 2018 25, December 21, 2018 21, December Background of this decommissioning this of Background Decommissioning Unit of 1 at the No. OnagawaNuclear Plant Power Decommissioning plans for Unit 1 at the No. Onagawa Nuclear Power Plant were approved theby Nuclear Regulatory Commission in March Miyagi In May 2020, 2020. Prefecture, the Onagawa, of town and the city Ishinomaki of also granted preliminary approval for the plans in accordance with our safety agreements. In addition putting to safety first in the decommissioning process, will we share information on the status decommissioning of with local residents and other parties through our website and other means. Electricity Supply Business: Power Nuclear

Tohoku Electric Power Group Progress on Business Financial Corporate Introduction Message from About Tohoku Electric Our Vision Strategies Foundations to Support Top Management Power Group Corporate Value Creation Information Information 37 Buy fuels Buy action Courses of Fuel suppliers Fuel Electricity supply Electricity markets Negotiated Customers Negotiated Negotiated transaction (JEPX) Japan Electric Electric Japan Power Exchange Power Market Market transaction futures futures market Electricity Electricity market Fuel futures Trading Business Trading Tohoku EPCO Energy Trading Co., Inc., which Inc., EPCO is Energy ourTohoku Co., Trading including trading, integrated engages in subsidiary, strategic trading in the electricity market and the use fuel of futures. Hence, the company prepares for increased market transactions, which are expected result to from the complete retail liberalization electric of power. Since it started operating EPCO Energy Tohoku in April 2018, has proactivelyTrading explored new business areas while looking the toward future. It also acquires and accumulates the trading skills and know-how continue to boost to revenues. manageWe a range risks of surrounding the company, including market risk, building by a multilayered system involving the parent company. 50% stake stake 66.7% 234 650 End of End of FY2019 FY2019 Terumaru, the mascot mascot the Terumaru, character of Tokyu’s business electricity 270 184 End of End of FY2018 FY2018 In addition the to proactive use of wholesale power exchanges, we will continue to expand our revenue through sales of electricity via Synergia Power and Tokyu Power Supply as well as the trading business through Tohoku EPCO Energy Trading. Further, maximize to future wholesale and resale profits, we will optimize prices and volumes in power and fuel procurement through use of related markets, as well as operations realize to optimal combinations of wholesale, resale, and functions. trading and optimization enhancing thereby transactions, market 170 142 End of End of FY2017 FY2017 94 140 End of End of FY2016 FY2016 0 0 (thousand) (thousand kW)(thousand 100 200 200 400 300 800 600 50% stake stake 33.3% Number of of Number Contracts (Electricity) Synergia Power Electricity Contract Capacity Tokyu Power Supply Our volume of retail electricity sales is declining for various reasons, including Prefecture Niigata in and prefectures Tohoku six the in population shrinking the and intensifying competition for sales with new energy suppliers following power system reforms. For this reason, grow to our revenues, we must expand both wholesale and retail sales. Giventhese conditions, growing we’re electricity sales volume outside our main service area through Synergia Power and Tokyu Supply. Power Business Business environment We collaborate We proactively with other companies in the Kanto region, aiming increase to the amount of and prefectures Tohoku six the outside sell electricity we Prefecture. Niigata a companySynergia established we Ltd., Power Co., beganjointly offer to Ltd., Gas with electricity Tokyo Co., for customers who use high- or extra-high voltage power in the Kanto region (mainly in the northern Kanto area) In thetough in April competitive 2016. customers acquired has company the environment, havingsteadily, won contracts for approx. 650,000 kW as the of end FY2019. of in which Power SupplyTokyu invested we Ltd., in Co., sells electricityMarch 2018 and gas mainly customers to living in areas along the lines. Tokyu collaborate We with Power SupplyTokyu mainly as a wholesale supplier of a has Supply Power Tokyu company. the electricity to wealth sales of channels, solid branding skills and excellent marketing skills. combine We these strengths with ours, which are stable, competitive power sources and the know-how and experience gained in the electricity business, in our efforts offer to services that appeal our to customers. we As the of end FY2019, of had won approx. 230,000 electricity sales contracts sector). (low-voltage Advancing sales outside our of service area alliancesthrough Electricity Supply Business: Wholesaling

Tohoku Electric Power Group Progress on Business Financial Corporate Introduction Message from About Tohoku Electric Our Vision Strategies Foundations to Support Top Management Power Group Corporate Value Creation Information Information 38 irector & Presidentirector & Representative President Director & Tohoku Electric Power Network Co., Inc. approximately 7,500 Company name: TohokuCompany Electric Power Network Inc. Co., Established: April 2019 1, D Representative Sakamoto, Representative: Mitsuhiro yen billion Capital: 24 Employees: survive as an enterprise, must we make even stronger efforts cut to costs. For this reason, in addition to advancing current efforts improve to the efficiencyof equipment and improve to business efficiency through kaizen activities, will we make optimal use new of technologies and drones streamline to such as AI, IoT, configurationof facilities and refine maintenance and technologies. inspections willWe also make proactive efforts pursue to new revenue- generating opportunities, unconstrained the by framework theof power transmission and distribution business, actively and boldly taking on the challenges new of business development. will We contribute, through sophisticated use our of network facilities, technologies, information, and other resources, help to realize the smart society called for Electric in the Tohoku Power Group Vision. Medium-/Long-Term As a company playing role a key in the electricity business through our power transmission and distribution, must we ensure that each and every employee fully demonstrates his or herown unique abilities and maximize the resulting combined power carry to out business operations while cherishing the relationships trust of with local communities based on the Group Management Philosophy Prosperity of in Partnership with Communities. As an individual responsible for management, I intend lead to our 7,500 employees based on the perspective overall of optimization continue to fulfill to our missionof delivering reliability,safety, comfort, and convenience our to customers and our communities, even amid the current dramatically changing business environment. In April Electric power Tohoku transmission 2020, Power’s and distribution business was spun off form to Tohoku Electric Power Network, an independent company. A look back at the history Electric Tohoku of Power’s power transmission and distribution business date to shows a journey characterized the by challenge battling of and overcoming natural disasters. confronted We’ve numerous challenges over the years, including the 2011 Great East Japan Earthquake and other earthquakes, as well as intensifying natural disasters such as the recent typhoons, Faxai and Hagibis, and blizzards. In each case, havewe overcome the challenges through the knowledge, efforts, and perseverance all of employees. This strong concern for and sense mission of in delivering a stable supply electricity of is part ourof DNA as While a company. the spin-off changes our organization, our ultimate mission remains unchanged: deliver to a stable supply electricity of and the Niigata Tohoku to areas while maintaining neutrality and fairness, with safety always first. The electric power business, including power transmission and distribution, cannot succeed without the trust the of handed philosophy basic the serves. Under it communities down from Electric the time founding, Tohoku of Power’s which states that the prosperity region the of Tohoku is essential to our own growth as will we a company, strive build to even stronger relationships trust of with our communities. The business environment in which operate we is demand declining including changes, dramatic undergoing for electric power and in Niigata Tohoku due shrinking to and energy, renewable of adoption expanding populations, aging facilities. In response these to changes and to We will fulfill our mission to deliver a stable supply of of supply stable a will fulfill to deliver We our mission comfort, reliability, safety, delivering thereby electricity, our and to our communities. customers convenience and Electricity Supply Business: Power Transmission and Distribution and Electricity Transmission Supply Business: Power

Tohoku Electric Power Group Progress on Business Financial Corporate Introduction Message from About Tohoku Electric Our Vision Strategies Foundations to Support Top Management Power Group Corporate Value Creation Information Information 39 0 (km) 4,000 8,000 12,000 16,000 1,209 832 Okinawa action Courses of 3,177 9,198 Hokuriku 3,315 9,288 Shikoku 8,063 19,315 Hokkaido 7,959 20,932 Chugoku See “Enhancing resilience,” p. 60.

25,066 Kyushu 10,007 Total length of overhead power transmission lines (right lines axis) transmission power overhead of length Total Chubu 10,707 30,306 32,376 Kansai 14,255 Tokyo 43,436 14,759 Nishi-Sendai Substation Nishi-Sendai Number of pylons (left axis) 47,560 14,855 Tohoku 0 Exterior of the storage cells at the 15,000 30,000 60,000 45,000 Volume of power transmission facilities of individual individual of transmission facilities power of Volume transmissiongeneral distribution business & power smooth out fluctuations in grid frequency andvoltage. Accordingly, together with measures intended put to existing power transmission facilities maximum to use, are we working with the Organization for Cross-regional Coordination of Transmission Operators, Japan (OCCTO), an agency certified theby Japanese government, improve to and expand the grid connecting and with other Tokyo Tohoku areas, as well as implementing a bidding process for connecting the grid to in the northern area Tohoku and other efforts as strive we to expand connect ways to renewable energy the grid. to (Units) facilities and applying new technologies new applying and facilities Further improvements in safety and business quality business and safety in improvements Further Enhancing resilience to maintain stablesupplies of efficient configuration developing by achieved Structural savings cost Promoting advances in the power network to help realize a smart society We willWe advance the following initiatives fulfill to our mission of delivering a and comfort, reliability, safety, for consideration with electricity, of supply stable communities: and customers our to convenience The area which to the Company supplies electricity—the six for Prefecture—accounts Niigata and prefectures Tohoku about land 20% Japan’s of mass and includes the largest- scale facility infrastructure any of general power transmission business in Japan, both in terms total of length overhead of power transmission lines and number pylons. of In addition, challenging poses topographic area Niigata and Tohoku the and climatic conditions, including a long coastline, numerous mountainous areas, heaviest and Japan’s snow belts. Given these conditions, in addition striving to maintain to and develop facilities in response an aging to infrastructure through new technologiesand other means, will we endeavor enhanceto our ability respond to increasingly to frequent and severe natural disasters, based on the lessons numerous of past disasters, including the Great East Japan Earthquake. Since and the Niigata Tohoku area has numerous locations ideally suited the generation to wind of power and other renewable energy, the number requests of connect to our to grid is growing. Given that renewable energy output varies with weather conditions, doing our we’re utmost maintain to the balance between electrical demand and supply through flexible useof thermal power and pumped-storage cells storage large-scale installed also We’ve hydroelectricity. at the Nishi-Sendai and Minami-Soma substations to Initiatives to ensure stable and enhanced supply resilience to Initiatives In April 2020, the power transmission and distribution segmentwas spun off formto a legally separate entity ensure to further neutrality and fairness in the power transmission and distribution business. the At same time, shrinking populations have slowed demand growth for electric power in the Tohoku and Niigata regions, while revenues from power transmission under contract, the main source of income for Tohoku Electric Power Network, are trending down. There isalso a need for further enhancements in resilience due intensifying to natural disasters and aging power transmission and distribution equipment, as well as adapting appropriately growing to use of the grid transmit to renewable energy. The Tohoku Electric Power Network must also draw on technological innovations and digitization take to on the challenge of helping realize to a smart society, as identifiedTohoku in the ElectricPower Group Medium-/Long-Term Vision. 2020 2020 Business Business Through Through March 31, environment Since April Following the amendment the of Electricity Business Act, spunwe off the power transmission and distribution segment as a separate legal entity in April ensure to 2020 neutrality and fairness operations of in that segment. In response this to change, since April the power 2020, generation and retail electricity sales businesses have been operated Electric Tohoku Inc. by and Power Co., the power transmission and distribution business by ElectricTohoku Power Network Inc. Co., ElectricTohoku Power Network Inc. will continue Co., in six the electricity in of supply stable a deliver efforts to its Prefecture. Niigata in and prefectures Tohoku Spinoff transmission theof power and distribution segment Electricity Supply Business: Power Transmission and Distribution and Electricity Transmission Supply Business: Power

Tohoku Electric Power Group Progress on Business Financial Corporate Introduction Message from About Tohoku Electric Our Vision Strategies Foundations to Support Top Management Power Group Corporate Value Creation Information Information 40 Power companies Tohoku Electric Electric Tohoku Gas and water network Smart meter meter meter Water Electricity Electricity Gas meter Gas After adopting shared meters adopting After Customer Power companies Tohoku Electric Electric Tohoku Gas and water network Smart meter Gas meter meter meter Water Electricity Electricity Before shared meters Before Customer the harsh natural conditions of the Tohoku and Niigata region and studying the development of a system suited the to region issues, such as a shrinking working population and aging society. telecommunications network on gas and water meters and verifying collection and data, use meter of the smart water and gas of meter collection remote automated for network telecommunications of safety information on matters such as gas and water leaks, and remote opening and closing gas valves By enabling advanced and efficient operations, these shared meters will leadto solutionsto regional Assessing the environmental durability and wireless propagation properties of wireless devices under Installation of a wireless telecommunication device capable of connecting to smart meter smart meter to connecting of capable device telecommunication wireless a of Installation Feasibility testing of shared electricity, gas, and water meters using networks smart telecommunications meter In August 2020, in partnership with Hachinohe Gas and Ltd. Co., the Hachinohe Regional Water Supply Authority, we began feasibility testing of shared electricity, gas, and water meters using our network. telecommunications smart meter Developing efficient configuration of power transmission & distribution facilities suited to growing use of EVs of use growing to suited facilities distribution & transmission power of configuration efficient Developing Developing next generation power networks suited new to methods of using the grid, including VPPs and peer-to-peer renewable of use (P2P)growing to suited facilities distribution & transmission power of configuration efficient Developing system generation power on controls output through supply and demand managing for methods advancing and energy and other means grid the of independent networks power other and microgrids operating and Developing Developing a platform for advanced use of smart meter data and telecommunications networks Power network advancement Amid the growing adoption renewable of energy and use decentralized of energy, in additionstudying to forms for efficient configuration of facilities and grid operation suitable changes to in demand also striving and we’re supply, advance to the power network help to realize a smart society. Specificexamples expectedof initiatives in this area include the development power of transmission and distribution facilities suited to growing use EVs of andthe development a platform of for advanced use smart of meter networks. telecommunications and data Abnormality occurs. Slave unit Slave Slave unit Slave Judging the status of corrosion of of corrosion of status the Judging recognition image AI using materials A meeting choose to themes for activities small-group Slave unit Slave Master unit Master Enables rapid detection of of detection rapid Enables the locations of terminals at abnormalities inside offices. This system uses (low-power IoT telecommunications) wide-area collect to technologies other and from operations on information for units) (slave sensors on-site monitoring facility remote in use and allows rapid detection of the abnormalities. any of locations Developing a system based on AI corrosion the judge to AI Using status of pylon materials via supports recognition image repair efficient of formulation reflect accurately that plans corrosion. Remote monitoring of facilities using IoT using facilities of monitoring Remote and the identification and study of solutions for improving including perspectives, multifaceted efficiency from operations. of outsourcing and centralization, reduction, transmission and power system sections, we strive use to the time generated by efficiency improvements for purposes quality. business in further improvements as such Initiatives to improve efficiency are based on kaizen activities activities kaizen on based efficiency are improve to Initiatives power on centered activities, small-group and 5S Through 2 1 Kaizen activities Kaizen Case Case Efficiency improvement initiatives Efficiencyimprovement We’re proactivelyWe’re adopting new technologies maintain to and reliably manage power transmission anddistribution facilities extending across a wide service area. Specifically, promoting improvementswe’re in efficiencyby adopting auto-tracking dronesfor automated inspections along power transmission lines on a trial basis, developing and using systems based on judge AI to the degree corrosion of on power pylons, and performing substation operations and maintenance using smart glasses systems. Electricity Supply Business: Power Transmission and Distribution and Electricity Transmission Supply Business: Power

Tohoku Electric Power Group Progress on Business Financial Corporate Introduction Message from About Tohoku Electric Our Vision Strategies Foundations to Support Top Management Power Group Corporate Value Creation Information Information 41 Illustration of businesses help to realize a smart society alike children and adults for convenience and abundance:natural Comfort, safety, Tohoku’s reflecting future region’s the of vision A Inthe prefectures six Tohoku and in Niigata Prefecture, whereElectric the Tohoku businesses Power Group’s are based, shrinking populations and an aging society resulting from low birth rates is proceeding at a faster pace than in other regions. As a result, wide-ranging social issues are expected emerge to in the future, including transportation,education, and welfare. Among related issues, the Group considers the following issues as important: effective utilization energy of in the community, consideration for the environment, advancement digitization,of securing safety and peace mind, of making optimal use diverse of human resources, realizing a sharingeconomy, expanding flowsof non-resident people, rebuilding social infrastructures, and building a transportation infrastructure for the new era. Businesses that can contribute realizing to a smart society refer those to that can identify and create solutions the abovementioned to social issues through next generation digital technologies and innovations, enable to residents live to in comfort and and safety, with peace mind of without conscious concern over each the of individual services used. Businesses Help to Realize Smart a Society

Tohoku Electric Power Group Progress on Business Financial Corporate Introduction Message from About Tohoku Electric Our Vision Strategies Foundations to Support Top Management Power Group Corporate Value Creation Information Information 42 * Virtual power plants realized through and IoT other new information technologies in the remote control and integration of power generating facilities, storage cells, EVs, and other decentralized energy resources owned by municipalities, firms, community. the across residents and Illustration of businesses that help realize a smart society suburban and urban for vision future A communities comfortable functions urban Convenient, inspired resident by needs and a true vision of life of modes inviting By providing services like VPP* that make effective use decentralized of energy resources in the community and various electricity-related services that improve quality and satisfaction in commerce and the livesresidents, of Electric the Tohoku Power Group will help realize a smart society and create value only the Group can provide as a utility based in Prefecture. Niigata and prefectures Tohoku six the pandemic Thehas COVID-19 brought with it societya characterized new by modes daily of life and working through utilization digital of technologies. Our businesses that help realize a smart societyalso help realize such new living. ways of will We investin them strategically as growth businesses for the Group. Businesses Help to Realize Smart a Society

Tohoku Electric Power Group Progress on Business Financial Corporate Introduction Message from About Tohoku Electric Our Vision Strategies Foundations to Support Top Management Power Group Corporate Value Creation Information Information 43 ideathons and other activities, through which theGroup strives as oneprofitable toward businessesto speedily move us closer the goal to a smart of society. We’re resolved deliver to value only Electric the Tohoku Power Group can provide and contributing to comfort, to safety, and peace mind of not just through electricity, but in various other aspects, backed the by support stable, of foundations. business agile yet In deploying businesses help to realize a smart society, we will seek become to a one-stopprovider for a wide range electric power, service including of solutions, bundles and in cooperation with various partners, thereby delivering comfort,safety, and peace mind of our to customers and bundling challenges. By social resolving by communities solutions only can we provide, based on our position as a Group that clearly grasps local customer needs and social issues and holds expertise accumulated through energy services, will we establish a solid position in realizing a smart society, not just in the prefectures six Tohoku and in regions. other to extending but Prefecture, Niigata partners, as make we steady progress toward commercial also operation. focusing We’re on providing housework including needs, residential services to suited and caring for family members, as well as business needs such as optimal use energy. of Withthese positioned at the core, will we accelerate our initiatives realize to a smart society. Given digital among competition steadily, advancing are technologies businesses active in this sphere is fierce.For this reason, also strivingwe’re strengthen to our business foundations succeedto in competition. In addition accelerating to the speed decision-making of in the newly established Business Creation Division, which serves as a control fortower these efforts, accelerating we’re open innovation startups through efforts with alliances enhancing and investment in venture capital also developing funds. We’re structuresencourage to employees in the field and theon frontlines—employees who daily face various needs and issues in connection with their customers and business holding ideas and communities—to propose Tohoku Electric Power Co., Inc. Representative Director & Executive Vice President realize a smart society Establishing a firm to Establishing position The recently formulated Electric Tohoku Power Group Group’s Vision discusses the Medium-/Long-Term resolve implement to business a model transformation. Businesses that help realize a smart society are to key effecting this transformation. This is a new business domain established the by Group. Businesses that help realize a smart society are ones that resolve social issues and realize comfort, safety, andpeace mind of through use next of generation digital innovations. and technologies areWe already making progress on planting the seeds of these businesses, centered on next generation energy servicesservices business-related which and in life- and possesswe expertise and strengths. Examples include virtual power plants (VPPs) Sou, Chikara and the Yori, + ONe solutions. In the area established VPPs, of we’ve a strategic alliance with Next Kraftwerke, among the advancing simultaneously while firms, VPP largest world’s activities such as feasibility studies on the use various of resources together with local governments and other Businesses Help to Realize Smart a Society

Tohoku Electric Power Group Progress on Business Financial Corporate Introduction Message from About Tohoku Electric Our Vision Strategies Foundations to Support Top Management Power Group Corporate Value Creation Information Information 44 town Smart city/ management Field provision Field Social businesses infrastructure Natural gas business gas Natural Examples of initiatives Examples of convenience Service comfort, (bundled services) Participation in advanced council in Izumi Sendai Ward, Comprehensive Comprehensive range of services provision of a wide VPP and decentralized power supply equipment business, mobility services energy services Next generation Yori, Sou, Chikara + ONe services (living support), energy solutions, business solutions services business ONe + (living support), Chikara solutions, energy Sou, Yori, Business Business domain of of domain decentralized power sources development in Lineup expansion Lineup Life-/business- related servicesrelated Electricity retail sales retail Smart city/town management Life-/business-related services Social infrastructure businesses Next generation energy services energy generation Next Service comfort, safety, peace of mind Our outlook investment on At this time, we’ve decided thisAt time, we’ve invest to a projected 1 billion yen or so per year in efforts give to concrete form to businesses that help realize a smart society, starting in the nextexpectWe fiscal theyear. scaleof these investments reach to tens billions of yen of through the 2030s on a cumulative basis. How we develop businesses develop we How help to realize a smart society building we’re the foundationsFor now, for these businesses prioritizing by investment in life- and business-related services, which will generate results in synergy with the electricity supply business, and next generation energy services such as VPPs and promote will We equipment. supply power decentralized these services making by the most Electric the of Tohoku opportunitiesPower Group’s engage to with members of the community, together with use our of grid operation technology, as a utility with deep roots in our region. From the middle the of 2020s, based on the above life- and business-related services and next generation energyservices, will we offer bundled services deliver to comprehensive solutions customer to needs through comfort, peace safety, mind, of and convenience and building to addition in technologies, digital of use innovative new services. While our businesses established help to realize a smart society will mainly focus on the prefectures six Tohoku and Niigata Prefecture, since trends such as shrinking populations are expected emerge to nationwide, will we services, other and the businesses,deploy technologies, resources accumulated in the prefectures six Tohoku and in Niigata Prefecture broadly nationwide in the future. Businesses Help to Realize Smart a Society

Tohoku Electric Power Group Progress on Business Financial Corporate Introduction Message from About Tohoku Electric Our Vision Strategies Foundations to Support Top Management Power Group Corporate Value Creation Information Information 45 The exEMS system applies and AI visualize to IoT information such as maximum power demand and changes in power usage, as well as in fluctuations forecasting demand due the to effects of external air temperature and other factors. It includes features for comparisons to past results, detailed demand forecasts for the next 24 Business solutions Employee benefit outsourcing benefit servicesEmployee Support services related to business continuity planning Our proprietary exEMS energy system management equipment, including air conditioning air including equipment, Automated control of air conditioning equipment conditioning air of control Automated equipment individual by electricity use Visualizing types of multiple of control Automated Energy conservation advisory reports conservation Energy customers other with comparison for Functions Electricity visualization, demand monitoring demand visualization, Electricity Power-saving trials

Energy solutions exEMS exEMS with A with exEMS Proposing optimal energy use for customers and businesses individual exEMS Advanced exEMS In addition enhancing to our energy business solutions catering customer to needs, such as the proprietary exEMS energy management system, also we offer a range of equipment. customers’ services to suited hours using Big Data, and power-saving trials support to taking action save to energy. The lineup includes exEMS with A for automated control of air conditioning equipment and exEMS Advanced for automated conditioning. air including equipment, types of multiple of control Business-related servicesBusiness-related Provides on information events and deals special Earn points by driving in EV mode Storage service for items placed in boxes Post-feed-in-tariff home purchasing energy solar services We willWe deliver comfort, safety, and peace of mind customers to providing by services that contribute the to lives electricity sales. of residents retail of point starting and the on meet based all businesses, the energy of needs management management and facility In life-related services, based on Sou, the Chikara Yori, + ONe approach, we have begun offering delivery-based storage and variousservices other services. as deploying well, we’re In business-related energy and business solutions built around the core of our exEMS property energy management system. In life-related services, we will expand Sou, the Chikara Yori, + ONe service lineup hub. in pursuit serving the as exEMS with efforts, of further other and technologies digital through improvements solutions business energy our of in expansion comfort, functional include effortsservices, will our safety, and peace of mind. In business-related value provided value Family location Communication bot bot Communication courses of action courses of Future issues and and issues Future smart home living Summary Pocket delivery-based storage service storage delivery-based SummaryPocket Summary Pocket is a delivery-based storage service based on smart phones or computers that manages and retrieves items placed in storage. After requesting pickup of items for which no storage space is available at the home using a smartphone or a using deliveries manage can customer the box, special-purpose apparel, dry hanging services include and cleaning Optional available computer. services. storage convenient highly enabling confirmation serviceconfirmation Progress on initiatives Progress on Positioning of services, of Positioning linking families together linking Navigating comfortable, comfortable, Navigating Life-related services In the residential under Sou, Chikara sector, the Yori, + ONe brand are we accelerating expansion our of services support to residents’ lives providing by electrification solutions for smarter living and promoting by development services of utilizing AI, IoT, technologies. other and Data, Big creating andWe’re deploying various services suited changing to needs in customers’ everyday lives, due transformations to in peoples’ lifestyles and family structures. Life-/business-related services Businesses Help to Realize Smart a Society

Tohoku Electric Power Group Progress on Business Financial Corporate Introduction Message from About Tohoku Electric Our Vision Strategies Foundations to Support Top Management Power Group Corporate Value Creation Information Information 46 makers Storage- cell makers cell Solar-panel Solar-panel Alliances, cooperation (July 2020) (July Reward and storage cell services Provision of solar power generation generation power solar of Provision home and Maximizing Customers self-consumption at storage-cell controls panels and storage cells, swiftly to realize commercial operation Alliances and joint effortsAlliances joint and partners with manufacturers including solar of charging/ generation discharging Storage cell Solar power We’ve invested in Next Energy and Resources, which possesses the technological capability technological possesses which the Resources, and Energy Next in invested We’ve and expertise related decentralized to energy accumulated through its 15-year history of sales of solar power generation equipment and storage cells. The goal of this alliance is swiftly realize to commercial operation of the solar power generation and storage cell services and enhance services related daily to life and businesses. Capital alliance with Next Energy Next Resources and Capital with alliance Residential solar power generation and storage cell services cell storage and generation power solar Residential studying deploymentWe’re a third-party of ownership (TPO) model in which bear we the initial costs supplying of community residents with solar-power generating equipment, storage cells, and other equipment. Striving bring to this solution to commercial operation proceeding rapidly, we’re with alliances and joint efforts with partners including manufacturers solar of panels and storage cells who shareour vision. * Mainly includes power sources that can be used balance to demand and supply during peak times, such as fierce heat and cold weather. (June 2020)(June of storage cells owned by local governments (Miyagi Prefecture, the city of Sendai, the city of Koriyama, and the city of Niigata) in functions to adjust the balance of electricity demand and supply and make effective use of remote application of the through energy renewable technologies. control optimal and monitoring We’re also implementing initiatives toward effective use of home solar power generation in cooperation with Niigata Prefecture and the city of Sado. This feasibility study will verify matters such as the use Feasibility study of VPP solutions utilizing local government storage cells (May 2019) Through integration and effective use of regional energy resources, will we create win-win relationships in which customers in the community benefit with us via market trading in electricity on the slated markets, regulation demand-supply and opento other in April markets, 2021, as well as through direct transactions, then returning a portion these of gains to customers in the communities providing the resources. (June 2020) (June Reward Service provision In addition promoting to adoption of renewable energy in the region and optimal energy usage and developing solutions issues to suchdisasters, as the need we also for greater contribute resilienceimproving to to customer convenience and realizing energy and cost savings. of study advancing also we’re bidding*, public through sources power adjustable I’ Category of implementation practical launching to addition in business, VPP the In business for Resources and Energy Next with alliance capital a formed We’ve partners. overseas and domestic various with cooperation in commercialization development in areas such as decentralized energy and storage cell installation services. begin to plans with markets, regulation demand-supply as such areas in business develop will we studies, feasibility various from obtained knowledge on based business, VPP the In trading in In April areas such 2021. as decentralized energy and storage cell installationservices, we will seek launch to residential solar power generation and storage cell services rapidly. Resource provision Resource Renewable-energy- related services, energy optimization Added-value services Added-value and reward Reward value provided value Decentralized energy resources energy Decentralized courses of action courses of Future issues and and issues Future Market trading Market Optimization controls Progress on initiatives Progress on Positioning of services, of Positioning business concept and VPP feasibility-study feasibility-study VPP and concept business initiatives, it features easy understand to such matters VPP-related explaining videos (DR) response technologies. demand as business, we launched a VPP business business VPP a launched we business, website. informational Plans call for this program verify to matters such as the efficiency of controls in responsecar-sharingto use of EVs, including models, tourist destination models, and business site models and the feasibilitycells in functions of using EV for storage adjusting the balance between power demand and supply. We concludedWe a basic agreement on a strategic alliance in VPP feasibility studies withworld’s Next largest Kraftwerke, VPP operators. one of the Currently, verifying we’re matters such as the feasibility of offeringbased on new use services of Next Kraftwerke’s systems and learning from its expertise. In addition information to on the VPP As an effort expand to awareness of our VPP Category I’ power sources and capacity demand- markets, markets, etc. regulation supply Private power-generation facilities, storage cells, EVs, etc. Resource provision Resource https://vpp.tohoku-epco.co.jp/ VPP business informational website launched business informational website VPP Participation in the VPP development feasibility study program supported by the Ministry of Economy, Trade and Industry’s Agency for Natural Resources and Energy Strategic alliance with Next Kraftwerke (Germany) Virtual power plant (VPP) Next generation energy generation servicesNext Businesses Help to Realize Smart a Society

Tohoku Electric Power Group Progress on Business Financial Corporate Introduction Message from About Tohoku Electric Our Vision Strategies Foundations to Support Top Management Power Group Corporate Value Creation Information Information 47 and safety and Convenient, smart Smart functions to Smart to functions automated transportautomated Transport, logistics Transport, Peace of mind, safety increase peace of mind management efforts using VPP technologies within the community the within technologies VPP effortsmanagement using Promoting autonomous disaster prevention and energy measures mobility effective and Efficient Main initiatives engage with nature with engage solutions to social issues social to solutions carbon, recycling-oriented society contribute to the formation of a low adoption of solutions and services to Urban development ordinated to to ordinated Urban development Comfortable people which in living Proposing new modes of daily life through through life daily of modes new Proposing We seekWe apply to the knowledge attained through supporting the well. as locations other in activities council’s Drawing on our knowledge and experience as a comprehensive energy company centered onelectricity, we provide value help to progress further sustained and challenges social to solutions find communities. local within participatingWe’re in a council aiming promote to the adoption of advanced technologies and systems contribute to sustainable to town management in Izumi (Izumi Park Town Ward, Sendai). energy Health Energy living spaces and convenient, comfortable urban functions and living experiences value provided value By providing value integration services across multiple levels, delivering highly attractive Comfortable, courses of action courses of Future issues and and issues Future Self-production, healthy lifestyleshealthy Progress on initiatives Progress on Positioning of services, of Positioning self-consumption of of self-consumption Smart management city and town Participating organizations City of Sendai, Mitsubishi Estate, Homes, Panasonic Panasonic, Kanden Realty & Development, Tohoku Electric etc. Power, Participation in an advanced council in Izumi Ward, Sendai participatingWe’re in an advanced council in Izumi Sendai Ward, promote to the adoption advanced of technologies and systems and thereby contribute sustainable to managementtown This in Izumi includes Park Town. studies the of feasibility of community transport systems and the adoption solutions of and services contribute to a low carbon,to recycling-oriented society, in cooperation with the phase-six residential slated community The is underway. currently project development community zone east open (Theto in 2022. initiatives this of council have been selected as a priority promotion project under the Smart City Model Program, for which the Ministry Land, of Infrastructure, Transport and seeks Tourism entries.) Summary initiatives of LNG shipping facilities for the the for facilities shipping LNG Plant Power Thermal Shin-Sendai (FY) We’ve concludedWe’ve a basic agreement on a business alliance in sales of electricity and gas and are carrying out joint sales activities increase to sales corporate to customers in the Ishinomaki Gas service area, in addition cooperation to across a broadrange of other areas, including proposing solutions services. electricity gas and bundling concludedWe’ve an agreement on a business alliance in sales of electricity and gas, and in May 2020 we began offering customers. gas its to solutions bundled 46 Through Group member company TOHOKU NATURAL GAS, we we GAS, NATURAL TOHOKU company member Group Through wholesale natural gas numerous to gas providers. plan We to cooperation of feasibility the on studies broad-ranging undertake with other gas providers in the same way we currently work with Gas. Nikaho and Gas Ishinomaki Delivering total energy solutions through optimal combinations of of combinations optimal through solutions energy total Delivering by impact environmental reducing while gas natural electricity and shifting from fuels such as heavy oil LNG. to pipelines the using LNG gasified of supplies existing to addition In from NIHONKAI Niigata LNG’s facility and LNG supplied truck, by Thermal Shin-Sendai the for facilities shipping LNG the using Power Plant (which began commercial operation in August 2018) and other efforts expand to natural gas sales volumes. 2019 concluded Date contract January January 2019 March 2020 43 2018 40 2017 value provided value Prefecture) Prefecture) courses of action courses of Future issues and and issues Future (Nikaho, Akita NikahoGas Counterparty Progress on initiatives Progress on Positioning of services, of Positioning (Ishinomaki, Miyagi (Ishinomaki, Miyagi Ishinomaki Gas (10,000 t) (10,000 Trend in naturalTrend gas sales volume Alliances with regional natural gas with companiesAlliances Natural gas business Businesses Help to Realize Smart a Society

Tohoku Electric Power Group Progress on Business Financial Corporate Introduction Message from About Tohoku Electric Our Vision Strategies Foundations to Support Top Management Power Group Corporate Value Creation Information Information 48 In-house portal site In-house 10 years IoT, AI, energy, etc. IoT, Global Brain Corporation Brain Global Centered on Japan, Europe, Asia, and the US In-house ideathon In-house Tohoku ElectricTohoku Power Network business of lines front the on those including which the deputy general managers of branches of Electric Tohoku Power and officesTohoku of Electric Power Network take part Holding ideathons at individual branches of Electric Tohoku Power and offices of Using the portal site and other means to seek ideas from a broad range of sites, Drawing out and screening ideas through business idea creation working groups in in groups working creation screening business idea through ideas and out Drawing Operator Structure for generation business of ideas Implementing businesses help to realize a smart society requires the deployment new of businesses and new services meet to customer needs and deliver solutions community to challenges. Ideas solutions of and approaches will emerge from interactions between individual employees and our customers and communities. For this reason, develop we businesses and services based on ideas sought from all employees Electric in Tohoku Power and Tohoku Electric Power Network—including those at intermediate and frontlinesites. Other activities include ideathons held at individual branches and offices. Investment areas Investment period Investment Investment domains Investment GB-VII Growth Fund Investment Limited Partnership Limited Investment Growth Fund GB-VII Overall monitoring of businesses to help realize a smart society Drafting strategies, and policies coordination overall Business development business ideasCreation of Sales sections, etc. Management CommitteeManagement Division Group companies, intermediary/frontline sites Business Creation Smart Committee Promotion Society Business Alliances with diverse businessAlliances diverse partners with Promotion structure Promotion Businesses help to realize a smart society are led the by Business Creation Division, newly established in July serve to 2020 as a groupwide control draft to tower policies and strategies and carry out overall coordination. Individual business development and operation activities are carried out the by Business Creation Division, sales sections, and other parties, while generation of business ideas is handled under a companywide and groupwide structure that includes sites on the frontlines business. of Electric the Tohoku In this Power Group way, seeks take onto the challenges realizing of a smart society froman integrated approach. Businesses Help to Realize Smart a Society In giving concrete form businesses to help to realize a smart allying society, we’re with a diverse range businesses of capable sharing of our vision for establishing a smart society, including startups offering innovative technologies or business models and other companies with their own unique strengths. In January invested we 2020, in the GB-VII Growth Fund Investment Limited Partnership operated Global by Brain Corporation. will We continue efforts strengthen to alliances and joint efforts through investment in startups. The goals these of efforts include creating new businesses and services through open innovation.

Tohoku Electric Power Group 49

Tohoku Electric Power Group Progress on Business Financial Corporate Introduction Message from About Tohoku Electric Our Vision Strategies Foundations to Support Top Management Power Group Corporate Value Creation Information Information 50 emissions, is under growing growing under is emissions, 2 the SDGs Realizing the ideal A Group that grows together with the sustainable sustainable the with together grows that Group A smart society for the new age, starting from Tohoku Contributing to achievement of of Contributing achievement to development of society, contributing the to realizations of a The Tohoku Electric Power Group’s ideal for the 2030s the for ideal Group’s Power Electric Tohoku The Our views onOur use coal-fired of views thermal power for particularly consideration investment, ESG of perspectives the From the environment (E), coal-fired thermal whichpower, among fossil fuels generates relatively higher levels of CO criticism, particularly in Europe. The Japanese government has begun begun has government Japanese The Europe. particularly in criticism, in power thermal coal-fired inefficient out phasing on discussions Japan, and financial institutions have ceased financing new coal-fired in changes significant portending projects, generation power thermal power. thermal coal-fired for environment business the Japan is not rich in energy resources. secure To a stable supply of structure optimal an build to important is it electricity, cost-effective of power sources based on the S-3E approach of simultaneously environmental and efficiency, economic security, energy achieving an through principle, safety-first the on premised all performance, approach that combines coal, which is relatively stable in terms of price andavailable from reserves in many nations, with other fossil and non-fossil (renewable and nuclear) sources. see We coal-fired thermal power as important in our efforts secure to a stable supply of (S), an society is which to responsibility Group important an electricity, considerations. ESG of aspect Of course, use of coal requires thorough initiatives help to combat climate change. are We also advancing efforts in areas such as rapid the improving and operations plant power nuclear of resumption efficiency of thermal power generation, along with the development of renewable energy. In addition, we will continue striving mitigate to support and cooperation including means through change climate toward the establishment of carbon capture and storage (CCS) technologies, which are expected enter to practical use in the future. smart society sites Businesses to realize a Intermediate frontline and Electricity business supply businesses to realize a smart society SDG goals assigned special emphasis emphasis special assigned goals SDG through the electricity supply business and and electricity business the supply through and control Reporting Command Command G Governance Head offices Medium-/Long-Term Vision Medium-/Long-Term E ESG Environment of Conduct of management Sustainability * Deliberations on environmental matters take place in the Conference Promote to Action Plans for Global Environmental Issues. Deliberations on corporate ethics and Corporate on Committee the in place take compliance Compliance. and Ethics and control S Reporting Command Command Society Advancing the Tohoku Electric Power Group Electric Power the Tohoku Advancing Tohoku Electric Power Group Code Tohoku Electric Power Group CSR Policy Tohoku Electric Power Network: President, President, Network: Power Electric Tohoku Directors Managing President, Vice FY2019 meetings FY2019 Affiliates: Directors responsible CSR Promotion Council* Promotion CSR Confirming the status of initiatives related to CSR/ESGto related initiatives of status the Confirming CSR promotion structure in light of the spinoff of the power transmission transmission power the of spinoff the of light in structure promotion CSR business into a separate legal entity TohokuFY2019 Electric Power Group Integrated Report Tohoku the and Conduct of Code Group Power Electric Tohoku the to Revisions Group Power Electric Tohoku the reflecting Policy CSR Group Power Electric Vision Medium-/Long-Term Sharing information on social conditions related to CSR/ESG to related conditions social on information Sharing Considering the need for revisions to policies based onthe above Tohoku Electric Power Network: General Managers of Corporate Planning and General Affairs and Dept.. Planning Electric Network: Power Tohoku Corporate General Managers of Tohoku ElectricTohoku Power Group CSR Liaison Committee Tohoku Electric Power: President, President, Power: Electric Tohoku Directors Managing President, Vice Sharing information on social conditions related to CSR/ESG and the status of related initiatives in the Group July 2019 February 2020 on ESG-related matters. The Tohoku Electric Power Group CSR Liaison Committee promotes groupwide cooperation. groupwide promotes Committee Liaison CSR Group Power Electric Tohoku The matters. ESG-related on Tohoku Electric Power: Division Manager of Public Relations Div., Division Manager of Corporate Strategy Div. Tohoku ElectricTohoku Power and Electric Tohoku Power Network are members the of CSR Promotion Council, which deliberates Promotion of ESG management ESG Promotion of Inlight growing of investmentESG in recent years, the ElectricTohoku Power Group sees it as an important responsibility social (CSR)by corporate its fulfill to mission stressing the interests the of environment(E), society (S), and governance (G). Based Electric on the Tohoku Power Group Code of the and conduct, corporate our governs which Conduct, ElectricTohoku Power Group which CSR Policy, describes our outlook on CSR, Electric the Tohoku Power Group seeks help to establish a smart society for the new era, starting region, in the Tohoku and help to reach the Sustainable Development Goals (SDGs), stressing by asESG advance we initiatives in line with the Tohoku Electric Power Group Medium-/Long-Term Vision. Promoting ESG Management ESG Promoting

Tohoku Electric Power Group Progress on Business Financial Corporate Introduction Message from About Tohoku Electric Our Vision Strategies Foundations to Support Top Management Power Group Corporate Value Creation Information Information 51 Committee (Chairperson: general manager) general Environmental unit unit Environmental Group Environmental Environmental Group Tohoku Electric Power Electric Power Tohoku Cooperation Reporting Proposals, reporting Environmental Environmental top management) top Board of Directors of Board Environmental Issues Environmental (Chairperson: President) (Chairperson: member of Instructions Action Plans for Global Conference to Promote Management Committee Management Supervision Management Structure,” ESG Data p. 7, Book. Reporting

See “The Tohoku Electric Power Group’s Environmental Governance Internal Internal auditing (Corporate Secretariat strategy Div.) environmental environmental Recognizing response climate to change andother environmental issues as an important management with Committee, Management Environmental our topic, a membership composed representatives of related of and examines directors, related and responsible sections deliberates on related matters, submitting its findings theto Conference Promote to Action Plans for Global Environmental Issues at the executive level. In addition, begun we’ve ascertaining risks and opportunities conclusions our reporting and change climate to related theto Board Directors, of as we establish a structure for level. management the at issues these monitoring (disclosure based on the TCFD recommendations) TCFD the (disclosure on based Disclosure of information on climate climate on information Disclosure of change Disclosures, established by the Financial Financial the by established Disclosures, Stability Board (FSB) reflect to the aims announced by G20 finance ministers and governors bank central * Task Force* Task on Climate-related Financial 8,400 companies worldwide. companies 8,400 what-we-do ranks (A, D-). C-, B, D, B-, C, A-, * Responses were gathered from more than https://www.cdp.net/en/info/about-us/ eight of one to assigned are Respondents In April 2019, in responseIn April growing to 2019, demand for including stakeholders, among disclosure information the support for our announced we investors, institutional recommendations. TCFD Since redoubled then, we’ve efforts promote to environmental management in areas such as strengthening our responses climate to change, as well as carrying out continual improvements and enhancements our of internal the with accordance in disclosure information and initiatives recommendations. In responding we believe the to TCFD, it is important not merely disclose to information, but reflect to in our posed opportunities and risks the strategies management climateby change. In addition expandingto the disclosure environmentalof information in accordance with the TCFD recommendations, we will reflect these in management stakeholders, various engagement with through strategies investors. institutional including we submittedIn our 2019, answers the to climate change Disclosure (formerly Carbon CDP the of questionnaire* Project), an international NGO that assesses corporate information disclosure in areas such as climate change. We earned an assessment the B, of third highest level. will We continue efforts maintain to and improve this assessment. CDP assessmentCDP Support TCFD* the for emissions, emissions, 2 and other greenhouse gases 2 this effect is expected be to temporary. Climate change priority topic. a remains This year marks the start the of implementation period of the Paris Agreement, concluded The Japanese in 2015. emissions gas greenhouse reduce seeking to is government in 2030 in and 2050. 80% by 26%by vs. 2013 vs. 2013 In light such of circumstances, we believe it is essential ascertainto both the risks and opportunities climate of change and enhance to our initiatives address to climate adaptation. and mitigation both through change change climate on vision long-term the with accordance In announced in October the by Electric Power Council for a Low Carbon Society (ELCS), as we, a member the of ELCS, will continue initiatives based on both the decarbonization of portfolio the energy and optimal an achieving electricity by conservation. energy realize to electrification of promotion sustainable the alongside grow to strive will Group The development society, of helping establish to a smart society for a new age, starting from in line Tohoku, with the risks climate see We change. climate by opportunities posed and greenhouse in reductions and measures mitigation change mission. societal crucial our part as of gases in terms both of supply and demand. The impact climate of change has been increasingly evident in recent years, as seen in the damage caused the by effects extreme of weather events, such as flooding and fierce heatwaves, and wildfires worldwide, as well as damage dueto major typhoons in Japan. While the economic impact the of pandemicCOVID-19 in led 2020 reduced to CO Having long recognized climate change as an important management issue, moved forwardwe’ve with measures reduceto emissions CO of Climate changeClimate mitigationan adaptation initiatives change understanding climate Our of Environmental Management Environmental

Tohoku Electric Power Group Progress on Business Financial Corporate Introduction Message from About Tohoku Electric Our Vision Strategies Foundations to Support Top Management Power Group Corporate Value Creation Information Information 52 Major impactMajor (droughts) Technology 4° C scenario 2° C scenario Temperature rises by 0.9–2.3° C from the rigorous to due Revolution Industrial countermeasures Source: From Fig. SPM 6 in the Synthesis Report of the IPCC Fifth Assessment Report Temperature rises by 3.2–5.4° C from the Industrial Revolution due failure to take to countermeasures. additional Changes in precipitationChanges in patterns Droughts due decreased to rain and snowfall lead the to possibility of reduced production power hydroelectric Changing rates of electrification, including including electrification, of rates Changing in innovations to due electrification, automobile electrification Extent of advances in technologies electrification to related Falling prices of renewable energy equipment Falling cost of equipment such as solar panels and wind power generation systems, due to factors other and innovation technological Further promotion of decarbonization technologies Advancement and promotion of storage cell technologies, carbon capture, utilization, and storage (CCUS) and other technologies for energy renewable of use increasing Chronic (reputation) Society Changing customer behavior customer Changing Rising demand for low carbon energy, such as renewables from electricity behavior investor Changing Rising cost of fundraising or lower stock prices due to accelerating divestment from coal-fired thermal power change climate to responding in delays or generation power nuclear receptivitySocial to Issues in securing social receptivity nuclear to power, despite increasing need as a non-fossil-fuel source Rising air temperatures with wide-ranging impacts such as rising incidence of heat while electricity demand, in growth and stroke rising sea levels increase risks of flooding in the event of disasters Rising air temperatures and sea levels s Global average land temperature increases (vs. 1986–2005 average) (° C) credits (markets) 2 Major impactMajor Economy Changing fuel and electricity market prices electricity market and fuel Changing CO of cost Rising Increasing demand for J-Credits, certificates of non- fossil-fuel sources, etc. due progress to in price credit rising in resulting decarbonization, Changing electricity demand of use accompanying demand electricity Changing energy renewable Intensifying in competition energy businessesrenewable renewable among competition Intensifying energy businesses due entry to into the market companies new of Energy prices, market prices market prices, Energy Acute (policies) Major impactMajor Increasingly severe climate disasters emissions due to adoption of of adoption to due emissions 2 Politics emissions targets emissions 2 Carbon pricing Revisions to systems involving involving systems to Revisions energy renewable of adoption Impaired capacity recover to investments in renewable energy sources due falling to feed-in tariff prices or system changes Frequent occurrence of increasingly severe typhoons, torrential downpours, damage etc., facilities,to and occurrence of power failures, and the need for measures that account for standards technological national of reviews CO Rising cost in areas such as facility responses and purchase of certificates duetougherto targets or measures mandatory of adoption Energy-mix/non-fossil-fuel targets ratio facilities transmission and sources power of cost Rising due strengthening to of targets on shares of electricity sources renewable or non-fossil from purchased carbon taxing, emissions trading, etc. trading, emissions taxing, carbon Rising cost of CO Strategy Physical risks Physical Transition risks Energy Agency (IEA), Intergovernmental Panel on Climate Change (IPCC), andintended other bodies. consider to This scenario impacts that analysis may arise under is certain assumptions and feasible responses,perspective. based No guarantees on a long-term are made regarding results. Risks related climate to change * We’re improving* We’re our scenario analysis in stages, based on multiple climate change scenarios identified by the International Individual climate change risks are summarized under below, the categories physical of risks (acuteand chronic) and transition risks (political, economic, social, and technological): To ascertainTo future risks and opportunities related climate to change, chosen we’ve two scenarios: C scenario a 4° under which the shift a low carbon to society fails to advance and countermeasures against climate change prove unfruitful; a 2° C scenario under which the necessary measures are taken maintain to temperature increases no to more have than initiated We 2° C. a scenario analysis on a medium- long-term to timeline, looking at the period starting in 2050.* Environmental Management Environmental

2 coefficient reductionof 2 Securities reports,Securities quarterly reports, etc. https://www.tohoku-epco.co.jp/ir/report/security/index.html /kWh in 2030. As will we member, an ELCS seek reduce to CO 2 emissions 2 See “Scope Scope 1, and 2, Scope 3 (Category 3) greenhouse gas emissions,” p. 8, ESG Data Book.

Accelerating initiatives to achieve rapid resumption of nuclear power plant operations operations plant power nuclear of resumption rapid achieve to initiatives Accelerating principle safety-first the on founded network power the resilience of the advancing and Enhancing Measures such as enhancing the capacity withstand to natural disasters and develop to renewable of adoption growing the to suited facilities transmission efficientpower energy energy-use increasing customers’ efficiency toward initiatives Enhancing performance, environmental offering outstanding systems energy Proposing conservation, and safety, etc. Renewable energy development energy Renewable Centered on the six prefectures Tohoku and Niigata Prefecture, aiming develop to capacity 2 million of mainly kW, through wind power efficiency thermal power Improving Measures such as realizing the highest world’s thermal efficiency level, at 63% or higher, construction under currently 1, No. Unit Joetsu at operations plant power nuclear of resumption Rapid Targets and goals and Targets Risk management Risk Each section in charge is selecting and assessingrisks related climate to change on its own, as areas its of responsibility, and formulating its own medium-term plans on management. environmental and business Important risks are submitted for deliberation the Conference to Promote Action to Plans for Global Environmental Issues, chaired the by President, and reported the to Board Directors, of as part measures of ensure to that the validity measures of is level. management the at confirmed Since climate change risks also pose risks business for the Group’s performance and financial statusover the longterm, our securities reportfor the fiscal year ended March includes2020 new a section on risks related climate to change. The goal ELCS for the electivity business as a whole is a CO emissions through the following measures: following the through emissions Reducing CO roughly kg-CO 0.37 power energy, etc. energy, Electrification decentralized energy decentralized Decarbonizing electricity Responses/opportunities development and expansion of renewable renewable of expansion and development electrification in mobility and other aspects aspects other and mobility in electrification Increasing resiliency of electricIncreasing of resiliency service-provision businesses and promoting promoting service-provision and businesses Considering business opportunities involving involving opportunities business Considering through progress on realizing a smart society a realizing on progress through Taking on the challenges of shifting diverse to Supplying more economical and eco-friendly eco-friendly and economical more Supplying Increasing the strength and resilience of facilities of resilience and strength the Increasing electricity through more efficient thermal power, power, thermal efficient more through electricity (Arrows in the chart below indicate the direction of financial impacts.) emissions due to 2 competitive. disasters Risks Progress in electricity supply. electricity existing power sources less to climateto change impacts on Increasing frequency of decarbonization policies Rising cost of CO Growing damage our to facilities due policies, market conditions, etc. make make etc. conditions, market policies, 4° C 2° C Scenario To maintain ourTo businesses under either scenario, in accordance with the Tohoku Electric Power Group Medium-/Long-Term striving Vision, achieve we’re to sustained growth through a transformation a business into model that considers electricity supply as our core business and establishingsmart a society as a growth business segment. Business risks and opportunities based on climate change scenarios and responsesrelated Under C scenario, the 4° which entails considerable physical risk, the resilience the of electric power infrastructure will grow increasingly important, as pronounced impacts of climate change would be expected lead to acute to risks such as increasingly frequent and severe natural disasters, damage Company to facilities, and supply impediments, along with chronic risks such as the impact on hydroelectric power changes of in rain and snowfall patterns. Under the 2° C scenario, which involves significant transition risks, the decarbonization electivityof and electrificationwould advance while useof thermal power decreases due market, policy, andto other considerations, in response measures to achieve to a decarbonized society. Environmental Management Environmental

Tohoku Electric Power Group Progress on Business Financial Corporate Introduction Message from About Tohoku Electric Our Vision Strategies Foundations to Support Top Management Power Group Corporate Value Creation Information Information 54 24 December 2019 December 24 /y) after they 2 Sean KidneySean Bonds Initiative Climate CEO, Have met the criteriaHave on behalf of the for certification Board by the Climate Bonds Standard Initiative Climate Bonds This is to certify that the Issued by Tohoku Electric Power Co., Inc Electric Power Co., Tohoku Tohoku-EPCO’s Green Bond Tohoku-EPCO’s Certification Initiatives,” pp. 33, 34. See “Our Renewable Energy Business

CBI certificate emissions reductions in t-CO in reductions emissions 2 Assessment by external agencies external by Assessment Environmental impact Environmental

be consistent with the standards for climate bonds. bonds. climate for standards the with consistent be Climate bond standards are international standards formulated ensure to strict confirmation, based on green between consistency the of grounds, scientific bonds and the 2° C target under the Paris Agreement. 4 2 * Refers Certificate to issued by CBI for bonds verified to come online. There have been no major changes plans. allocation or progress project in As of the all end renewable of FY2019, energy projects targeted by funds raised using these bonds were under construction. plan We report to on their specific environmental impact (annual CO Independent verification of these green bonds issue. their after continues Our issue of green bonds has been assessed and standards various with compliance for verified related their to issue by the independent agency DNVGL Business Assurance Japan K.K. We were also the first general power companyto secure certification by the Climate Bonds Initiative (CBI)*, an international NGO that establishes strict standards secure to the reliability and transparency of green bonds. 3

3.1 billion yen billion 3.1 yen billion 3.1 1.9 billion yen billion 1.9 (with general mortgage) general (with (Japan Credit Rating Agency, Ltd.) (Rating & Investment Information, Inc.) February 2020 20, February 2020 27, bonds Straight 5 billion yen billion 5 years 10 0.310% SMBC Nikko Securities Inc. A+ A++ Tohoku Electric Power Green Bonds Green Power Electric Tohoku New investment and refinancing in businesses related development, to repairs and operation, construction, energy renewable for Projects Amount allocated Amount agent SDGs Unallocated balance Unallocated Name decided Overview Allocation of funds raised funds of Allocation Date issued Date Interest rate Redemption Redemption Consistency Consistency Use of funds of Use

Issue amount Issue funds and the the and funds Type of bonds of Type between use of period on issue on period Amount allocated to refinancing to allocated Amount Date conditions conditions Date Ratings securedRatings Lead/structuring 1 3 In February 2020, we became the first general power company in Japan (under the previous legal standard) issue to green bonds. These green bonds were the first from a general power companyto be certified through the strict certification process of the Climate Bonds Initiative (CBI), an independent agency. For renewable energy generation, centered mainly on striving wind we’re power, develop to million 2 kW of capacity in the six Tohoku prefectures and in Niigata Prefecture. Funds raised from these green bonds are used mainly forthis business. Issuing Tohoku Electric Power GreenElectric Bonds Power Issuing Tohoku (as of March 2019) 31, Fukushima Hydrogen Energy Research Field (FH2R) Energy Research Field (FH2R) Field project Research Energy Aerial photo of the Name Fukushima Hydrogen indicating volume of gas in a dried state at pressure and of 1 ATM temperature of 0° C This project is part the of NEDO Development Technologiesof for Realizing a Hydrogen Society/Development Hydrogen of Energy project. Technology System * Normal cubic meter (Nm3) is a unit of theof concept. power-to-gas these ends,Toward the project seeks achieve to progress in various control systems (hydrogen energy operation systems, control systems on the grid side, and hydrogen-demand forecasting systems) and in water electrolysis. New environmental technologies New society hydrogen a realizing toward Initiatives Alongside the NewEnergy and Industrial Technology Development Organization (NEDO), EnergyToshiba Systems & Solutions Corporation, Iwatani Corporation, and Asahi Kasei Corporation, Electric Tohoku Power Electric and Tohoku Power Network are taking part in feasibility studies, which began in July for theFukushima 2020, Hydrogen Energy Research Field (FH2R) in the Namie, of town Fukushima Prefecture. Plans call for this become to one largest theof world’s hydrogen production facilities based on renewable energy. This facility will have the capacity generate hydrogen Nm3*of to per 1,200 hour (during rated operation) from renewable energy and other sources. Based on adjustments of grid demand and this supply, is intended put both to renewable energy (which entails considerable output variation) maximum to use and establish to clean,low-cost hydrogen production technologies and technologies enable to practical implementation Environmental Management Environmental

Tohoku Electric Power Group Progress on Business Financial Corporate Introduction Message from About Tohoku Electric Our Vision Strategies Foundations to Support Top Management Power Group Corporate Value Creation Information Information 55 slogan (The Strength to Work Alongside) Deploying supporters for the Sou, Yori, Chikara cooperation among sections and sites sections and among cooperation related the to promotion of initiatives and share to information across the organization on topics like successful case studies and sites. individual concerns at for promoting Sou, the Yori, Chikara (The Strength Work to Alongside) slogan, supporters are assigned all to sites stimulate to efforts. managers’ general the support of in initiatives site Improving everyday initiatives by encouraging by initiatives everyday Improving Meetings are held among these supporters discuss to issues While section and site general managers are responsible

Lateral encouragement frontline sites frontline communities Intermediary and and Intermediary Individual employees Individual Working alongside Working Vertical Vertical employees Corporate Head officesHead management encouragement (The Strength to Work Alongside)(The Work Strength to everyday activities of all Group customers Embodying this philosophy in the the in philosophy Embodying this Yori, Sou, Chikara Chikara Sou, Yori, frontline sites frontline Getting closer to Intermediary and and Intermediary Individual employees Individual (The Strength to Work Encouraging employees to embody the Yori, Sou, Chikara Sou, (The Alongside) Work Strength slogan to Yori, embody the to employees Encouraging perspective in medium-term plans medium-term perspective in Theme Vision of Sou, Yori, Chikara (The Strength Work to Group Power Electric Tohoku the Alongside) under Vision Medium-/Long-Term Issues in practicing the Sou, Yori, Chikara (The Strength to sites frontline and intermediary at Alongside) slogan Work Roles of site general managers in embodying the Sou, Yori, Alongside) slogan Work to (The Strength Chikara Chikara Sou, Yori, the embodying in managers of Roles Alongside) slogan Work to (The Strength About the Group slogan, Sou, Yori, Chikara (The Strength Alongside) Work to management and site managers site and management Alongside) plans under the leadership of corporate corporate leadership of the under plans Reflecting the Yori, Sou, Chikara Sou, Yori, the Reflecting Holding discussions and training at individual levels individual training discussions at and Holding Practical implementation based business on Follow-up by corporate management and site managers site and management corporate by Follow-up of embodying Sou, the Yori, Chikara (The Strength Work to sites frontline with dialogue in Alongside) slogan the status of implementation Sou, the Yori, Chikara (The Strength operations business in Alongside) slogan Work to Explanation by corporate management of the importance the of management corporate by Explanation Follow-up by managers, through dialogue and other means, of Corporate management committee) (executive Office and branch managersgeneral of managers General sites frontline appointed Newly managers employees New Discussions and training are held for personnel at individual levels, levels, individual personnel at for held are training and Discussions on subjects such as how implement to Sou, Yori, Chikara (The Strength Work to Alongside) and related issues. Subject ReflectingYori, theSou, Chikara (The StrengthWorkto Alongside) perspective in the Tohoku Electric Power Group Medium-Term Plan formulated each year help to realize the TohokuElectric Power Vision. Medium-/Long-Term Group To ensure Electric that theTo Tohoku Power Group continues be selected to in a business environment undergoing intensifying competition, it is essential propose to and deliver value only Electric the Tohoku Power Group can offer while continuing work to alongside our customers and communities in efforts grounded in customer needs and community issues. consider We this be the to Electric root the of Tohoku Power ensure Group brand. that each To and every Group employee can embody Sou, Chikara the Yori, (The Strength Work Alongside) to slogan in his or her everyday business activities and inspire to specific actions andTohoku initiatives, ElectricTohoku Power Electricand Power Network are incorporating this vision as a perspective in their medium-term plans and assigning supporters promote to this vision at each section and site. Our Brand Our

Tohoku Electric Power Group Progress on Business Financial Corporate Introduction Message from About Tohoku Electric Our Vision Strategies Foundations to Support Top Management Power Group Corporate Value Creation Information Information 56 development Support attractive for community Tohoku and Niigata Tohoku We supportWe unique activities in areas such as urban and community development and vitalization. also We engage in initiatives that and cultural community support for involve activities. athletic Alongside the community Advancing initiatives to grow and advance with with advance and grow to initiatives Advancing In addition doing to all we can ensure to a stable supply of growth, and recovery community for foundations the electricity, we contribute areas to such as stimulating regional economic activity developing by and providing new services. Initiatives to securestable to a Initiatives electricity supply of 2019 A workshop on employing the Yori, SouA workshop on employing the Yori, 46.6% approach in responding to power failures power to responding approach in The Tohoku Electric Power Network Network Power Electric Tohoku The Aizu-Wakamatsu Power Center held a workshop led staff by from the Power which Department, Planning Distribution isin charge of duties including power grid management, allow to Customer Service Department staff respond to in easily inquiries customer with dealing when ways understandable failures. power during Service Department Customer the besides sections multiple With participating, the workshop served as an opportunity learn to about the work of power distribution sections and deepen cooperation among departments at the branch. 2017 42.6% activities 2016 40.0% Trend in rate of use of Yori, Sou in rate use of Yori, of Trend Internal surveys assess the extent which to employees implement in their everyday the reflect that initiatives activities business Sou, ChikaraYori, (The Strength Work to Power Electric Tohoku at Alongside) slogan and Electric Tohoku Power Network. While the rate is growing steadily, activities further to continue. initiatives these stimulate Business execution under the Yori, Sou approach Sou Yori, the under Business execution Yori, Sou telephone services Sou telephone Yori, reflecting customer needs reflectingcustomer individual lifestyles users earn loyalty points location of children using smartphones comfortable modes of daily life using appliances electric connecting family members with othereach Providing services more closely A choice of rate plans suited to let services Web-based that Various Yorisou Kokocchi service to check Kokodenka services to support Yorisou Bocco communication bot Together with ourcustomers Together To improve the quality of telephone telephone of quality the improve To most for service, accounts which Sendai-Minami our contact, customer branch has formulated integrated with Starting targets. implementation branch by submitted items proposed staff based on items gleaned from e-learning and telephone service videos, employee voting and formulate to held were manager general the with discussions these targets. Card stands describing them are installed on all staff desks so that employees can review them while providing telephone. service the on Providing comprehensive services comprehensive living for Providing Web services Services related to daily life We offerWe electricity rate plans suited the to lifestyles, changing customers’ particulars of family structures, as well etc., as services to customers. for living support daily Rate plans Inour business operations, asthe implementation initiatives of grows based on awareness Sou, the of Yori, Chikara (The Strength Work to seeking to Alongside) we’re slogan, emphasizes that attitude an establish and customers alongside working communities based on shared perspectives, deployingSou Yori, initiatives provide to services that meet customer needs while growing and community. the alongside advancing Through further pursuit the of value only Electricthe Tohoku Power Group can deliver and based on stable supply and everyday operations, will we offer not just new services and plans, rate but transform ourselves an into organization more customers our to proposes that comfortable lives and lifestyles, as well as methods regional of and community development that will function as the possible. this make to infrastructure Our Brand Our

Tohoku Electric Power Group Progress on Business Financial Corporate Introduction Message from About Tohoku Electric Our Vision Strategies Foundations to Support Top Management Power Group Corporate Value Creation Information Information 57 (7.2%) 37 FY2019 879 (6.9%) 36 FY2018 839 See p. 26, ESG Data Book. (6.7%) 29 FY2017 828 Year employees hired employees Number of female female of Number Number of people people of Number Promoting DiversityPromoting The Electric Tohoku Power Group believes that in order to diversifying of needs the to respond to ability its enhance customers and continue grow to as a company, it is important to create a working environment in which diverse human resources can make maximum effective use of their abilities irrespective of responsibilities. job or age gender, their (percentage of female employees) female of (percentage Number of female employees Disabilities with People Employing company, new a established has Group Power Electric Tohoku The ElectricTohoku Power Friendly Partners in on order July 2018 to disabilities. with persons of employment the further promote the companyIn May 2019, was certified as a special subsidiary. Moving forward, we will continue making efforts develop to working environments that are easy for people with disabilities work to in, disabilities. with people of employment the promoting actively and Creating workplaces in which diverse human resources can thrive, regardless of gender or age provideWe training for male and female employees of child-rearing age foster to awareness of career development and strengthen to motivation in preparation for coming life events. also We provide training support to achieving a balance of work and home life for leave. childcare from returned have who employees women In training for management personnel, we striveencourage to skills acquisition and understanding on appropriate ways of support and providing communicating expectations, based on an individual understanding of differences in values among of regardless subordinates, age. or gender Further increased productivity See p. 25, ESG Data Book. distribution sectors Legal unbundling of of Legal unbundling the transmission and : electricity Stable supplyof Raising human awareness of rights Since create to FY1994, workplaces in which diverse human resources can thrive, we have held lectures and group education raiseto human rights awareness. In December we held a 2019, lecture meeting on the theme of harassment in which about 350 learned affiliates and Company the of managers chiefly persons, how improve to awareness of issues that help create workplace environments free of harassment. committed We’re striving to to raise the human rights awareness of each and every employee. (human resources)

Electric Power Tohoku ElectricTohoku Power surrounding Tohoku Tohoku surrounding Business environment environment Business driving force for growth for force driving Tohoku (6 prefectures) Niigata and Tohoku Employees Response to intensifying business environment intensifying business to Response Contribute to the growth and development of Establish robust business infrastructure High quality services quality High Intensified Intensified competition as a result of deregulation of result Bold workstyleBold reforms Establishing a robust business infrastructure with growth powered human by resources In order respond to flexiblyto changes in the business important is it that believes Power Electric Tohoku environment, draw to out the abilities and qualities of individual employees with a diverse range of emotional sensibilities and values, and linking this the to creation of new value. Moreover, in order for the company be to chosen customers by and be to trusted local by employees— our important for is it that believe we communities, who are the key people in our electric power business—to engage in their jobs with a sense of duty. For this reason, we are working create to workplaces that offer each employee a sense satisfaction. job of Creating Workplaces with with Creating Workplaces Respect Diversity for Human Resources (Our Employees Are Valuable Assets)

Tohoku Electric Power Group Progress on Business Financial Corporate Introduction Message from About Tohoku Electric Our Vision Strategies Foundations to Support Top Management Power Group Corporate Value Creation Information Information 58 in the local community. company that is Aim to become a customers and people people and customers trusted and chosen by By helping all employees to work healthily and energetically, we will aim to become a company that is trusted and chosen by customers and people in the local community. At the same time, we will seek to increase competition. the against win and productivity See “Work-life ESG balance”, Data Book. p. 27, A healthy energetically everyone works company where See “Actions for health management”, p. 30, ESG Data Book. – “Yori, Sou, Chikara” (Workstyle Reform Version) work”… and improving work the head office site starting in April 2020 has been well received, leadingto our recognition as one of the 2020 “White 500” firms implementing outstanding health management (in the large firms category), a joint initiative of the Ministry of Economy, andTrade Industry and the Nippon Kenko Kaigi. Through continuing health management initiatives, we will continue striving stimulate to productivity. boosting and employees vitality of the raising including organization, the efficiency,” “achieving efficiency,” work-life balance” and of “reducing workloads Through a positive cycle “improving the quality of “Mina, Osu, Chikara” “Mina, Osu, reforms) with ahead pushing workstyles and (Reviewing Every employee in the company works to reduce workloads and improve work efficiency, achieve a healthy work-life balance and improve the quality of theirwork, while at the same time never forgetting that they are a good member of a family, and of the local community. Workstyle Reform By advancing workstyle reform as a major movement throughout the company as a whole, we will link it to the realization of “Yori, Sou, Chikara”. Health and ProductivityPromoting Management The Tohoku Electric Power Group is engaged in health and productivitymanagement, with the aim of becoming a healthy company where everyone works energetically, by seeking a Basic improve to formulate andwe enhance Specifically, health. improving and illness preventing for capabilities response early Policy for Health Promotion on an annual basis. Based on this policy, our head office, branch offices, and front-line business locations cooperate and seek ensure to good communication build and between promote to management work and employees; and staff promotion health physicians, industrial personnel, both the mental and physical health of each individual employee. In addition these to and other ongoing health improvement efforts, the prohibition of smoking throughout In April we formulated 2018, the slogan “Mina, Osu, Chikara” (literally, “The Strength Review to and Push Ahead”), incorporating the wish that everyone in the company should work together as one review to workstyles and push ahead with reforms. have We implemented various initiatives from the perspectives of “reducing workloads and improving work efficiency,” “improving the quality of work,” and“achieving work-life balance.” In the future, wewill aim carry to out work-style reforms based mainly on information and communication technologies (ICT), while putting systems such as flextime and working from hometo further use, based on measures currently underway in response pandemic. the to COVID-19 Implementing Health and Productivity Management to Build the Mental and Physical Employee Each of Health Creating a Healthy Company Where Everyone Works Energetically Works Where Everyone Company Healthy Creating a

Other self- development aid

Aid for mutual self- development groups

measures Aid for education by correspondence Self-development aid Self-development Self-development

Self-development support Self-development Aid for acquisition of official certifications Do Check Open education Open D C P A Job rotation Set growth targets and train in an manner organized assignments) (On-the-Job Training) Act (Planned transfers and and transfers (Planned Plan OJT OJT (Improve) See “Developing human resources to drive growth”, p. 28, ESG Data Book. Our skill development support system development skill Our General education Selective Selective education education Compulsory Open education Open Group education Group education Departmental Domestic & overseas Off-JT dispatch education initiative the take ability to and grow to motivation employee’s Each Education for obtaining

(Off-the-Job Training) qualifications Dispatch Dispatch education External seminars Education of new employees new of Education The Tohoku Electric Power Group develops human resources from a medium long-term to perspective growth. for opportunities new pursuing to view a with In FY2020, we identifiedkey itemsto be implemented, including “fostering awareness of transformation and motivation for challenge,” “sure passing on of knowledge, technology and skills and improving quality of work,” and “enhancing the management capabilitiesof managerial personnel,” and are working to enhance the development of each individual employee while at the same time seeking achieve to organic, mutual collaborations, based on the three key pillars OJT of (1) (On-the-Job Training), (2) Off-JT (Off-the- (3) and Self-Development. Training) Job Developing Human ResourcesDeveloping Developing Human Resources Who On the CanChallenge Take of Transformation NewTowards Opportunities for Growth, and Passing on Technology and Skills Human Resources (Our Employees Are Valuable Assets)

Tohoku Electric Power Group Progress on Business Financial Corporate Introduction Message from About Tohoku Electric Our Vision Strategies Foundations to Support Top Management Power Group Corporate Value Creation Information Information 59 See “Actions for entrenching voluntary security activities”, p. 33, ESG Data Book.

To avoid the recurrenceTo improprieties of that have occurred before, the status of autonomous security activities in each section is reported the Safety to and Security Promotion Conference, the Nuclear Safety Promotion Conference, and the Committee on Corporate Ethics and Compliance, thereby confirming that they are being implemented according plan; to that systems are in place for identifying and correcting any issues ourselves; and that active communication occursthrough dialogue and other measures. In these and other seek we ways, ensure to that autonomous security activities are even more firmly established within the organization. In addition, through autonomous security activities, strive we ensureto the safety of equipment. security of the ensuring by communities our and customers Building aBuilding corporate culture that puts safety first Initiatives ensure to thorough safety and improving business quality Aiming firmly to establish a corporate culture that ensures thorough safety and boosts business striving quality, improve we’re to safety and security groupwide and the quality power. nuclear for system management Based on our recognition that securing safety is the priority top in all business activities, goala key build is to a corporate culture that puts safety first through even greater coordination groupwide. In April established we 2020 Electric the Tohoku Power Group Safety and Security under Policy, which strive we enhance to initiatives related to security. equipment and safety occupational accidents zero of achievement the safetyon management towards Actions For the purpose reducing of industrial accidents, have we introduced the safety and health management system independently to and continuously improve safety management. It is an international standard method safety of and health management. Each office will independently perform management and remove and reduce latent risks accidents. industrial prevent to advance in factors harmful and If any industrial accident occurs, will we probe the into fundamental cause and background develop to effective measures for the prevention recurrence of and share information within the Company prevent to any similar accident from happening. ensure equipment security to Initiatives Facility securityFacility Safety of local communities local Safety of Stable and continuous supply of high-quality rates electricity low at Putting safety first Safety of customers Practicing Labor safetyLabor Yori, Sou, Chikara Yori, (The Strength to Work Alongside) Work (The to Strength Retaining high employee morale employee high Retaining Safety of employees of Safety Making Electric Tohoku Power Group into a company that is trusted and selected Relationship between actions for safety and corporate value enhancement value corporate safety and for actions between Relationship Occupational safety and equipment security are the foundations Electric the of Tohoku businessPower Group’s activities. consider We securing the safety our of customers and our communities be the to first steps in earning trust in orderto fulfill our high-quality electricity to low-cost, of supplies stable deliver to mission unchanging customers. will We create an environment that allows employees, as our driving fully force, to display their strengths without risk and practice our slogan Sou, Chikara Yori, of (The Strength Work Alongside) to in a bid become to a company that is trusted and selected. In accordance with our safety-related policies, will we continue our efforts build to a corporate culture that puts safety first to andincrease corporatevalue. Actions for safety that lead to continuous growth a and continuous safety to for to lead that Actions corporate in value medium- and improvement long-term Safety

Tohoku Electric Power Group Progress on Business Financial Corporate Introduction Message from About Tohoku Electric Our Vision Strategies Foundations to Support Top Management Power Group Corporate Value Creation Information Information 60 Major disasters since and related FY2010 initiatives Restoration work in response to power failures and and failures power to response in work Restoration Hagibis Typhoon of consequences other Recovery from power failures and other consequences of the Great East Japan Earthquake Dispatching aid in response to the Earthquake Kumamoto Dispatching aid in response to the Hokkaido Earthquake Iburi Eastern Dispatching aid in response to Typhoon Faxai 2011 2018 2019 2019 2016 At itsAt peak, damage facilities to caused by wind and rain and loss of facilities due river to bank breaches resulted in power failures households. for 57,834 A cumulative households total of144,700 suffered power failures as a result of this storm. dispatched We personnel a total of 613 from branches on the Japan Sea side of Japan branches to in Iwate, Miyagi, and Fukushima, all seriously damaged, work to toward rapid recovery. This massive earthquake, with a magnitude of 9.0—the largest ever observed—struck causing power at 2:46 2011, pm on March 11, failures affecting a total of 4.86 million households in our service area. Despite the vast reach of the area affected, based on a sense of mission and determination, we were able restore to power about to 94% of these within the following eight days. As requested by Kyushu Electric we dispatched Power, employees 122 and five mobile generatorsto provide emergency power suppliesto JR Aso Station and other locations in the city of Aso. As requested by Hokkaido Electric we dispatched Power, a total of 745 employees and 32 mobile generators assist to toward rapid recovery from power failures. In cooperation with the Japan Self-Defense Forces, we transported mobile generators and cranes via ships arranged for by the Self-Defense Forces. As requested by Tokyo Electric during Power, the period September we dispatched9–27, aid, including Company 1,684 employees and mobile 43 as well as contractors, construction from employees 1,981 generators, the largest team ever dispatched aid to another company. The aid team worked advance to recovery from the disaster. In restoration work following power failures and the other consequences of Typhoon Hagibis, we used drones devices and IoT such as smart glasses to ascertain the extent of damage facilities to and shareto information between sites and offices in real-time, helping restore to power quickly through work. restoration and instruction appropriate Utilizing drones and drones and Utilizing devicesIoT such as smart glasses Everyday drills, patrols, inspections of power distribution equipment power inspections patrols, drills, of Everyday To deliverTo a stable supply of electricity customers, to we carry out maintenance and management through everyday patrols and inspections of power distribution facilities, repair work, and otheractivities, striving minimizeto system downtime and power failures. In addition, raise to the level of technological abilities and pass skills along the to next generation, we hold group training for new employees every year as well as power-distribution section skills skills and technologies the in improve to employees enable to competitions needed for recovery from an emergency and learn from each other. Drills simulating the restoration of external power supplies while wearing safety ensure gear, to preparedness for a disaster at a nuclear power plant, are carried out strengthen to skills for restoring external power supplies at a nuclear power plant in assumed scenarios. Drills on restoring external power supply in the event of a disaster affecting nuclear a power plant Major initiatives to enhance a stable supply of electric power enhance electric a stable of supply to power initiatives Major and resilience disaster Enhancingresilience The Electric Tohoku Power Network does business based on the recognition that its most important mission deliver is to a stable supply low-cost of electricity customers to amid the broad geographical area and challenging natural conditions within its service area—the prefectures six Tohoku and Niigata Prefecture, which account for about 20% land Japan’s of mass. The Electric Tohoku Power Network has been able accumulate to expertise and technological capabilities through its experience with numerous natural disasters, includingthe Great East Japan Earthquake, aswell Hagibis as Typhoon Based last year. on the lessons from these disasters, it has enhanced its structures ensure to disasters. future for preparedness ElectricTohoku Power Network will continue balance to efficient development, maintenance,and management facilities of in addition securing to stable supplies through tangible and intangiblemeasures reflecting the lessons learned from past natural disasters. Safety

Tohoku Electric Power Group Progress on Business Financial Corporate Introduction Message from About Tohoku Electric Our Vision Strategies Foundations to Support Top Management Power Group Corporate Value Creation Information Information 61 organizations organizations 16,658 40 21 ® support organizations ® Electric Power Growth of Tohoku Regional revitalization support revitalization Regional Machizukuri Genki Juku Genki Machizukuri International cooperation and exchange activities exchange and cooperation International Tohoku and Niigata Revitalization Support Program Support Revitalization Niigata and Tohoku Regional revitalization support revitalization Regional Program aid organizations aid Program Machizukuri Genki Juku Genki Machizukuri Support Revitalization Niigata and Tohoku Number of participating employees participating employees of Number the by participations multiple (counting employee): same Between FY2006 and FY2019: Between FY2017 and FY2019: 160 1,130 Community cooperation initiatives 68,000 Deploying initiatives that support that communities local initiatives Deploying Development of Tohoku and Niigata and Tohoku Social contribution activities contribution Social support project Becoming a company trusted and chosen by local communities local by chosen and trusted company a Becoming Houkago Hiroba next generation generation next Hiroba Houkago community magazine women’s Yui Social contribution activities contribution Social Community initiatives cooperation FY2019 community cooperation initiatives cooperation community FY2019 FY2019 social contribution activities contribution social FY2019 Number of actions: of Number Actions implemented:Actions around participants of Number (external): around Examples of results achieved in these initiatives these in achieved results Examples of To be trusted andTo chosen customers by in thisage intense of competition, in addition to offering levels, rate plans and services that truly match the needs customers, of Tohoku Electric Power also considers it important deploy to initiatives that strongly support the growth and development the of prefectures six Tohoku and Niigata Prefecture. Based on our management philosophy prosperity of in partnership with the community and our Group slogan Sou, Chikara Yori, (The Strength Work Alongside) to and through our business activities, as a true contributor the region, to the entire Electric Tohoku Power Group works advance to initiatives that deliver solutions challenges to facing our communities and society. do so We working by alongside communities achieve to their sustained progress and cooperating and coordinating with local communities build to understanding. mutual in grounded trust of relationships Based on this thinking,in addition activities to help to revitalize local communities, the Company deploys a wide range measures of such as community contribution activities, including after school programs, that support the healthy growth the of children who represent the future our of communities. Activities under this heading include Machizukuri Genki Juku® training courses designed stimulate to community development and the to solutions support for provide which of both support program, Tohoku-Niigata community challenges. In these and other seek we ways, increaseto Electric Tohoku corporatePower’s value as a company trusted and chosen the by local community. Deploying groupwide measures community groupwide alongside the Deploying Community Contribution Activities that Contribute to the in CorporateSustainable Value Growth and Improve Long-Term to Medium Contributing to Communities Contributing to

Tohoku Electric Power Group Progress on Business Financial Corporate Introduction Message from About Tohoku Electric Our Vision Strategies Foundations to Support Top Management Power Group Corporate Value Creation Information Information 62 women’s magazine Issuing Yui Yui Issuing community Running the Tohoku Canada-Japan Society Tohoku the Running and cooperation with international exchanges international with cooperation and In addition to furthering mutual understanding, furthering understanding, mutual to addition In friendship, and goodwill between Japan and Canada through the activities of the Tohoku office, administrative Society Canada-Japan we work with organizations seeking promote to various and Region Tohoku the between exchange countries. overseas Yui, a communityYui, magazine is issued three times a year as a tool for communicating with women across a wide range of ages. It conveys the appeal and attractions of the six Tohoku prefectures and Niigata Prefecture. Tohoku Electric Power engages in numerous initiatives that contribute to society, including activities that promote the growth of the children who will play key roles in thefuture of the region, active roles for women who are events. community local with cooperation and communities, local of residents Tohoku Electric Power believes international exchange boosts the development of local communities. Based on this idea,engaged we’re including activities, exchange and cooperation international various in accepting technical trainees from various ASEAN countries and helping operateto the Tohoku Canada-Japan Society. the next Activities generation Information Center, Inc. (JEPIC) Inc. Center, Information operated by Japan Electric Power Cooperation and Social Contribution Exchange Activities Cooperation with ASEAN traineeCooperation with programs project to support to project Promoting International Promoting After School Plaza Tohoku Electric Power supports this cooperative cooperative supports this Power Electric Tohoku electric the developing objectives: its and program power infrastructure and training human resources in ASEAN member countries. In addition accepting to trainees,we dispatch our own employees as experts lectureto at seminars on location. Through various activities, we’re striving to build an an build to striving we’re activities, various Through environment in which children can grow their to full potential. These include essay contests for junior high school students, participating in the Tohoku Electric Power mini-basketball tournament, and issues. energy classes on touring holding Program Tono Power NetworkTono Center Green Curtain hops using Activities Tohoku and Niigata Revitalization Support Revitalization Niigata and Tohoku Through subsidies granted under this program, we support organizations engaged in voluntary activities resolve to issues in the local community: community local promotion, industry local the expanding and revitalization, and restoration numbers of non-residents. The Power Network Tono Center takes part in Green hops, with planters installing Curtain by Activities a major crop in area, the Tono at commercial sites within the city, stores in the city center, and locations such as train stations and sightseeing facilities. ® Tohoku Electric Power engages in various initiatives that contribute theto revitalization and development of local communities, including support for and areas local in planning support urban to initiatives activities resolve to issues in local communities. At each of Tohoku Electric Power Group site, employees participate in various initiatives as members of thelocal community, seeking to build relationships of trust with local residents. Machizukuri Genki Juku Genki Machizukuri Revitalization Support Regional for Community activities around business sites Participation in the portable the Participation festival shrine in * Activities implemented in FY2019 in implemented Activities * Offices in the city of Mutsu and the Higashidori Nuclear Power Plant Contributing to Communities Contributing to Tohoku Electric Power supports community-led supports community-led Power Electric Tohoku urban dispatching by activities planning urban planning experts organizations to working to resolve issues, based on the ultimate goal of greater enabling and communities revitalizing independence. and autonomy Some members 180 of the Tohoku Electric Power support association Mikoshi-matsuri Group portable shrine Mikoshi-matsuri the in participated festival held during the Tanabumachi Festival 18–20). (August

Tohoku Electric Power Group Progress on Business Financial Corporate Introduction Message from About Tohoku Electric Our Vision Strategies Foundations to Support Top Management Power Group Corporate Value Creation Information Information 63 HNK Co., Inc. EcoCap Activities EcoCap Soma Power Kyodo Co., Ltd. Participation in the Soma Nomaoi parade Nomaoi Soma the Participation in Since June with 2018, the cooperation of Group member companies and other tenants in the Denryoku Building, HNK Co. has helped deliver vaccines to proceeds through countries developing in children generated from collecting and selling plastic bottle caps. This initiative also promotes cap recycling and the supports and protection, environmental employment of those with disabilities by subcontracting cap washing and other activities. HNK plans continue to activity. the Every year since FY2008, at least 60 people from Soma Kyodo Power and othercompanies working at the Shinchi Power Plant site have taken part in the Soma Nomaoi festival, which dates back over 1,000 years and is designated as an important cultural event by the Japanese government. Walking in a procession from Nakamura Shrine in Soma, participants help pass on this tourism promote and event cultural Japanese traditional in the local Soso region. a total In FY2019, people of 67 tookpart in the event over the course of two days, carrying historical flags, firearms, and other artefacts as they marched alongside 400 warriors on horseback. Joban Joint Power Co., Ltd. Nakoso Dream illumination activities Dream illumination Nakoso Kitanihon Electric Cable Co., Ltd. Kitanihon Electric Co., Cable Kitanihon Concerts School Electric Cable Each Kitanihon year, Electric Cable sponsors touring concerts by the Sendai Philharmonic Orchestra, an ensemble based in the city of Sendai, Miyagi Prefecture. Scheduled each year for two of the six elementary schools in the town of Shibata, Miyagi Prefecture, where Kitanihon Electric Cable operates two manufacturing facilities, this roving concert visits all six schools every three years. During some FY2019, 800 students attended these recitals hearto nonet performances with a repertoire including children. among pieces favorite In cooperation with local government and related organizations, Joban Joint Power helps make possible group a wherein activities, illumination Dream Nakoso the of smoke stacks are lit up at night. A wide range of illumination activities takes place in cooperation with local seasonal and activities monthly highlight to residents the design students school high having including events, illuminations. In April and May 2020, the illumination theme was Blue Light Up, expressing gratitude for healthcare workers who work day and night amid the challenges posed by the pandemic. COVID-19 Tohoku Intelligent Intelligent Tohoku Securing naming rights Securing naming Construction Co., Inc. Co., Construction Telecommunication Co., Inc. Co., Telecommunication Engineering & Construction Awards Construction & Engineering Presenting the Tohoku Electric Power Electric Power Tohoku the Presenting Tohoku Electric Power Engineering & Electric Power Tohoku Since FY2017, Tohoku Intelligent Telecommunication has has Telecommunication Intelligent Tohoku FY2017, Since owned the naming rights the to Sendai community hall, knownby local residents as TOHKnet Hall Sendai. The company has added various conveniences the to hall—for example, free public Wi-Fi for visitors, an initiative befitting telecommunications information leading a as status its company. It remains committed providing to the support needed ensure to the hall remains a vibrant center for community. the within communication cultural As a means of expressing its support for the goals of local nonprofit You—motivatingArtto those with artistic their promoting and publicizing by disabilities & Engineering Power Electric activities—Tohoku its part of as organization the to donates Construction social contribution activities. The fifth You!Artto National Disability Arts Exhibition in Tohoku was held at SendaiOctober 2019 Mediatheque 17–20, in the city of Sendai. Typhoon Hagibis Typhoon Yurtec Corporation Yurtec Sakata Power Kyodo Co., Ltd. The Sakata Port Zero-Waste Project Volunteer activities in an area affected by With the participation people of some 170 from companies, member Group Power Electric Tohoku related governmentagencies, andothers in the cityof Power Kyodo Sakata Prefecture, Yamagata Sakata, Co. contributes the to Sakata Port Zero-Waste Project cleanup activities near Sakata Port. Held twice annually—in spring (end of May) and in autumn (end of October)—this cleanup project was recognized in April by a Green 2015 Ribbon Medal government. Japanese the from Local employees of Yurtec Corporation took part in volunteer activities in the city of Miyako, Iwate Prefecture, an area damaged by Typhoon Hagibis in October 2019. office site construction a to belonged previously had They located near the roadside Taro station. Inspired by the desire give to back those to in local communities who contributed Yurtec’s to construction projects on a daily basis, these efforts included cleaning and sterilizing tables, chairs, and other fixtures in the rest area and transporting waste from the disaster in cooperation with city employees and local residents. Companies Electric inthe Tohoku Power Group take part in numerous social contribution activities as members their of local communities. Contributing to Communities Contributing to

Tohoku Electric Power Group Progress on Business Financial Corporate Introduction Message from About Tohoku Electric Our Vision Strategies Foundations to Support Top Management Power Group Corporate Value Creation Information Information 64 Corporate governance Corporate https://www.tohoku-epco.co.jp/ir/policy/governance/index.html Shareholder dialogue Responsibilities of theBoard of Directors 5 4 (See p. 65 for more information on the management structure.) management the on information more for 65 (See p. To furtherTo sustained growth and medium- long-term to growth in corporate value, the Company establishes the beyond shareholders with dialogue opportunities for General Meetings Shareholders, of while Directors and other members management top of strive explainto clearly in management policies and elsewhere matters such as the Company business environment and initiatives. The ultimate goal ensure is to understanding, shareholders. with dialogue constructive promote to and (1) The roles(1) and responsibilities the of Board of Directors include measures achieve to the sustained growth the of Company and increasing corporate value over the medium long to term while soliciting diverse neutraland objective opinions from independent outside Directors, in light the of duties entrusted them to by accountability and shareholders associated and responsibilities. The Board Directors of also strives to foster a culturethat encourages free and constructive debate and exchange opinions of and welcomes issues raised outside by Directors. (2) In addition its important to role as a Company Supervisory and Audit the Committee supervisory body, serves as a statutory independent body charged with auditing the discharge management of responsibilities on behalf shareholders of the by Representative Director and other ExecutiveDirectors. By fulfilling these responsibilities, it contributes a sound to corporate trust society’s with commensurate structure governance in the Company and promotes sound, sustained growth and medium- long-term to value creation. Appropriate joint efforts with stakeholders beyond effortsAppropriate joint beyond stakeholders with Guarantee of shareholder rights and equitable Appropriate information disclosure and

1 2 3 transparency In addition(1) the appropriate to disclosure of information pursuant laws and to regulations, engage we in the timely disclosure accurate of and highly useful information through our website and various other media, in addition press to conferences and, as necessary, briefings, heldby the representative director. other and non-financial, financial, disclose (2) We information through detailed, fair, and simple methods, in accordance with the Companies the Act, Financial Instruments and Exchange and Act, other laws and regulations, as well as our own Disclosure Policy and policies. other (3) the extent feasible, To also we strive disclose to this information in English. standing The Company handles all matters based on laws and and shareholder rights guaranteeing thereby regulations, equality in real terms. the At same time, the Company advances efforts prepare to conditions that permit shareholders exercise to their rights, with due regard for shareholders. foreign minority and shareholders Based on consideration safety, for the environment, and and laws, standards, ethical corporate with compliance regulations, stress we activities based on two-way dialogue with a diverse array stakeholders. of The Company targets sustained growth and medium- to long-term growth in corporate value. Basic concepts of corporate governance of Basic concepts The Electric Tohoku Power Board Directors of to policies governance corporate basic establishes and concepts governance clarify corporate basic our related practicalinitiatives. Under our management philosophy prosperity of in partnership with the community, as identifiedTohoku Electric in the Power Group Medium-/Long-Term Vision and the Group slogan Sou, ChikaraYori, (The Strength Work Alongside), to we seek grow in to step with sustained progress within society helping by establish to a smart society in various ways: providing services centered on energy, working sustained in engaging and customers, alongside stakeholders. with dialogue this with consistent management appropriate ensure To heading, the Company implements initiatives that that those including governance, corporate enhance ethical corporate with compliance exhaustive ensure standards and laws and regulations, promoting fair, honest, and transparent business administration, and improving internal control and risk management. The Company sees strengthening and improving priority management its of one as governance corporate issues. Based on this perspective, the Company will advance initiatives ensure to sustained growth and enhanced corporate value on a medium- and long-term basis meet to the expectations its of stakeholders. Company initiatives will include activities that make management more flexible, sound, and transparent. Corporate Governance Corporate

Accounting auditors Cooperation Audits audits accounting propriety of propriety of Judging the Cooperation Audits Group companiesGroup Appointment and dismissal Office of Office of Internal audit Internal Audit Internal departments Cooperation Internal Audits Internal Nuclear Power 5 Checks Reports Committee Supervisory Audit and Appointment and dismissaland Office of Audit and 4 Corporate ethics ethics Corporate consultation counters counters consultation (internal and external facilities) external (internal and Supervisory Committe Audits Audits Meeting System Report systems Disasters Committee Market Risk Large-scale Commission Nuclear Risk Investigation Investigation Management Management Committee of Command and report and Command CSR Promotion Committee on on Committee Countermeasure Countermeasure CSR Promotion and Compliance and Corporate Ethics Ethics Corporate Risk management management Risk Audit and supervision and Audit Committee on Crisis Corporate ethics and compliance systems compliance and ethics Corporate Advisory Committee

Board of Directors Instructions and Reports 1 Nomination and Compensation and Nomination General Meetings of Shareholders of Meetings General 2

Indirect departments Report

Inquiry Internal Services Division Command Command and report Nuclear Power Committee Management Directors Directors 3

Report Division managers) Offices Head Office (office managers) Command Command and report

Representative Representative Power Generation Branch offices, stations, power service customer offices, etc.

Director & President and Sales Company (Company general presidents and Audit and Supervisory and Audit Committee) Business execution/control structure (Directors who are not members of the Appointment and dismissaland Supervision Board of Directors Internal audit departments Internal audit Management Committee Management Nomination and Compensation Advisory Committee Compensation and Nomination Audit and Supervisory and Audit Committee

5 4 3 2 1 At the Company, the Office of Internal Audits conducts internal audits on businesses from various perspectives, including the effectiveness and and effectiveness the including perspectives, various from businesses on audits internal conducts Audits Internal Officeof the Company, the At and effectiveness the and administration, business of efficiency and economy the systems, management and organizations of appropriateness efficiency of facility preservation activities. through audits perform internal departments audit internal These The Office Company. the within of generation Nuclear power nuclear for enhancements Power reliability and Internal Audit performs internal audits confirmation. on-site associated and research, documentary affiliates, principal and with subsidiaries, its safety Company, guarantees the at concerned individuals the with interviews The internal audit departments report and their problems resolve internal to concerned divisions the urge departments audit the addition, findings Supervisory In and Committee. Audit the and to the Directors, Representative of Board Director & President, the Management Committee, the issues that require improvement or correction. The departments also seek raise to auditors. Supervisory accounting and and the Committee effectiveness of internal audits in cooperation with the Audit The internal audit departments are independent from the respective executive bodies.Nuclear The Power Office Internal of AuditInternal fall Audits under theand directthe Office control of of the Representative Director & President. To ensure objectivity and neutrality in management supervision functions, three of the four members of the Audit and Supervisory Committee are Supervisory and are Committee Audit the of members four the of three supervision functions, management in neutrality and objectivity ensure To outside members. One full-time member of execution, the business Committee of state the concerning sections is appointed execution business with inquiring bodies, carry to other and Committee Executive the out, of on a dailymeetings basis, activities such as attending important to addition In effective. supervisory more and functions auditing making thereby sections, audit internal efforts with joint and sites, inspecting meeting monthly, the Audit and Supervisory Committee meets at other times supervisory when and body. auditing an necessary as functions deliberate to and report on matters relevant its to In addition attending to meetings of the Board of of Directors, state the inspects documents, important the reviews Executive execution, business of Committee, state the concerning sections execution business and with otherinquires important meetings, the full-time member also business and finances at business sites, and otherwise strives to ensure that auditingthe maintenance of matters andsuch operation as the performance of internal control of Directors’ systems duties is fully and addressed. He or she alsodiscussions strives improve to with audit the Representative results enhancing by attendingof area the Directorin particular, In and companies. engaging affiliate of auditors statutory in the the with periodic cooperation enhancing as well as exchange auditors, accounting of viewpoints with the internal audit Director the sections member, full-time and the among held the are meetings auditing tripartite auditors, accounting and sections audit internal with cooperation other and activities auditing through obtained information providing By auditors. accounting the and auditing, internal for responsibility with members. outside with cooperation effective and full ensure helps member full-time the activities, The outside members of the Audit and Supervisory Committee attend discussionsquestions of the Board and presenting of Directors and views Representative based on a wide member. a as range Advisory Committee Directors, Remuneration and of perspectives Nomination voluntary the asking attends Baba Member operations. of and state drawing the inspect to on theirfacilities wealth of personal experience, asSupervisory well and Audit asthe touringof duties the in assisting for responsible officers auditing appointed specially of assignment the to addition In duties. its in Committee the supporting with charged organization an Supervisory as and Office functions Committee Audit the Committee, Consisting of Executive Officers with titles, the Management Committee meets weekly to discuss overall business administration policies and and policies administration business overall discuss to weekly meets Committee Management the titles, Officers with Executive of Consisting Committee Management The Directors. of Board the by set policies management basic on based business important of execution the and plans also promotes the development of effective, efficient expansion. business autonomous businessexplore Services independently Division Internal the and Division processes Power Nuclear the through Company, Sales and an in-house company system, in which the Power Generation The Company has established a Nomination and Compensation Advisory Committee (chaired by Tsutomu Kamijo) comprised of two internal internal two of comprised Kamijo) Tsutomu by (chaired Advisory Committee Compensation and Nomination a established has Company The Directors (Representative Director & Chairman of the Board Makoto Kaiwa and Representativeindependent Director outside & President Directors Kojiro Higuchi) (Directors objectivity, securing to and related four Shiro matters on Kondo, Directors of Tsutomu Board Kamijo, the advises body This member). and Committee a Osamu Baba, Chiharu Director Kawanobe and Committee, who do not sit on the Audit and Supervisory voluntary committee a both of functions the fulfills Advisory Committee Compensation and Nomination The transparency. and timeliness, committee. compensation a to function in equivalent committee voluntary a and committee nomination a to function in equivalent Internal Control and Corporate Governance Diagram Tohoku Electric Power Diagram andCorporate Tohoku Governance Control Internal The Board of Directors consists Directors, of 15 including six independent outside shareholders. general with arise Directors may that unimpeded by potential conflicts of interest Inprinciple, the Board meets once month a these decide to monitor and Directors of on important Board the of meetings the to matters execution business of related status the report on management to also Directors The operations. and matters and essential for Company Directors. other by out carried implementation business and reports the whereby system a through Directors the to execution business on certain decisions important delegates Directors of Board The Representative Director & President, Representative Directors & Executive Vicereferred Presidents, as to “Executive and Managing Officers Executive with Officers titles”) take(collectively charge of business execution. Corporate Governance Corporate

Tohoku Electric Power Group Progress on Business Financial Corporate Introduction Message from About Tohoku Electric Our Vision Strategies Foundations to Support Top Management Power Group Corporate Value Creation Information Information 66 Since June 2020 6 outside Directors 40% Audit and Supervisory and Committee)Audit outside Director) serving as members of the (Including three outside Directors (one female From June 2019 June From 6 outside Directors 35% Audit and Supervisory and Committee]Audit management environment management April 2018 to the present Outside Director) serving as members of the [Including three outside Directors (one female Strengthening governance to account for rapidly changing for account to Strengthening governance business performance Establishing Executive Officers titles Executive Establishing with Appointment of female Directors Adopting a stock-based compensation program linked to Changes in status to a company with an audit and supervisory committee

From June 2018 June From and Supervisoryand Committee] servingas members of the Audit 6 outside Directors 35% [Including three outside Directors Adopting stock-based compensation program linked business to performance abolished program compensation option Stock established Governance Corporate on Policy Basic members from outside the Company (to change the numbers of members from the Company and those from outside the Company two to and respectively) four, Advisory Committee Establishing Executive Officers with titles Delegation of a portion of the Board of Directors’ authorities Directors to Expanding the authority delegated by the Board of Directors Directors to Changes in status company to with an audit and supervisory committee Increase in the number of Nomination and Compensation Advisory Committee Outside Director chosen as Chair of the Nomination and Compensation Representative Director & Chairman of the Board March 2020 March June 2020 June April 2018 June 2018 June 2018 June 2018 April 2020 January 2020 From June 2016 2 outside Directors 13% April to 2015 March 2018 governance codes governance effectiveness (using a questionnaire survey) questionnaire a (using effectiveness Compensation Advisory Committee (consisting (consisting Advisory Committee Compensation of two members from the Company and two Company) the outside from members additional Directors for compensation of outside Directors Company with an audit and supervisory board Start of the assessment of the Board of Directors’ Establishment Establishing the voluntary Nomination and Directors nominating for policies Establishing determining for policies Establishing Establishing criteria for judging the independence the judging for criteria Establishing Representative Director Chairman & of theBoard November 2015 November 2015 November 2015 January 2017 January February 2016 From June 2013 1 outside Director 6% 3 Outside Statutory Auditors Statutory Outside 3 Promoting governance reforms based on corporate corporate on based reforms governance Promoting Appointing two or more outside Directors Initiating assessments of the Board of Directors’ effectiveness Directors’ Board of the assessments of Initiating Establishing the voluntary Nomination and Compensation Compensation and voluntary Nomination the Establishing Advisory Committee

April 2005 to March 2015 years one to year stock-based compensation stock-based the Articles of Incorporation from or 25 fewer to or fewer18 Company with audit and supervisory and audit board with Company Abolishing Retirement Benefits for Directors for Benefits Retirement Abolishing Introducing the system of stock options for Introducing the Executive Officer system Decrease in the number of Directors specified in Reducing the term of office for Directors from two Representative Director Chairman & of theBoard June 2007 June 2010 June 2005 June 2007 Committee governance effectiveness achieve flexible business administration business flexible achieve Governance system total number of Directors. of number total Nomination of Directors of Nomination Compensation for Directors for Compensation Number of outside Directors Basic policies regarding corporate policies Basic Chairman of the Board of Directors Reducing the numbers of Directors and terms of office Officer Executive system the Introducing Introducing the system of stock options for stock-based compensation stock-based for options stock of system the Introducing

Commencement of initiatives to strengthen governance and and governance strengthen to initiatives of Commencement

Number of Outside Statutory Outside Auditors of Number Assessment of the Board of Directors’ Separation of supervision execution Separation of and * Figures in are the ratios of outside Directors to Changes in corporate governance systems systems corporate governance Changes in Corporate Governance Corporate

Tohoku Electric Power Group Progress on Business Financial Corporate Introduction Message from About Tohoku Electric Our Vision Strategies Foundations to Support Top Management Power Group Corporate Value Creation Information Information 67 The remuneration structure consists of fixed remuneration, short-term performance-linked remuneration, and and remuneration, performance-linked short-term remuneration, fixed of consists structure remuneration The performance-linked remuneration. medium-/long-term Short-term performance-linked remuneration is set appropriate to levels after consideringbusiness business conditions, performance, and other factors, but not exceed to the total approved by the General Meeting of Shareholders.Medium-/long-term performance-linked remuneration is paid by awarding one shareper of Company point earned common stock during the time of service, at the time of retirement or resignation through anbased investment-trust- remuneration system. It too is not exceed to thetotal approved by the General Meeting of Shareholders.Points are awarded in the forms of fixed points and variable performance-linked points awardedwith in accordance the extent of achievement of business-performance objectives. The indicator used in performance-linked remuneration is the financial target of returnsincluding on consolidated factors such cash as time-lagflow (not effects of the fuel-cost adjustment system, an externalthe variable Tohoku Electric factor) Power Group identified Medium-/Long-Term in Vision. The target value is set 320 to billion yen for each fiscal Amountsyear. paid and other matters vary with the extent of achievement of this target and other factors. Remuneration of outside Directors, whose perspectives are independent of business only. execution,remuneration consists of fixed Allotments for the respective Directors shall be decided in accordance with the sizes of the rolesrespective assigned title the to holders, the details of deskwork and duties assigned the to respective responsibility. of scopes respective Directors and their The Audit and Supervisory Committee may state its decided opinion on compensationDirectors for Directors serving (excluding as members of the Audit and Supervisory Committee) at a General Meeting of Shareholders. Remuneration for Directors serving as members of the Audit and Supervisory Committeeremuneration consists only. The of monthly total amount is determined by the resolution of the Regular General MeetingShareholders. of The amount paid each to Director is determined through negotiation among themembers Directors of the serving Audit and Supervisory as Committee, but not exceed to the total amount determinedof the by the Regular resolution General Meeting of Shareholders. The Board of Directors formulates proposed remuneration for Directors (not including Directors serving as members members serving as Directors including (not Directors for remuneration proposed formulates Directors of Board The of the Audit and Supervisory Committee) based on the above policies. These independent outside multiple proposals members include whose Advisory Committee, Remuneration and Nomination are deliberated on by the Directors, including the chair, ensure to objectivity and transparency, after which the amount andremuneration other for each individual Director is determined by the resolution of the Board. The percentages of total compensation accounted forby fixed remuneration and performance-linked performance-linked medium-/long-term and performance-linked remuneration (short-term remuneration remuneration) are set roughly to 70% and 30%, respectively, at the time of achievement of goals. Fixed remuneration is set appropriate to levels based on business performance, business conditions,factors, but not exceed to and other the total approved by the General Meeting of Shareholders. Policy Procedures

Policies and procedures for determining compensation for Directors serving as members the of Audit and Supervisory Committee are as follows: Policies and procedures for determining compensation for Directors (excluding (excluding Directors for compensation determining for procedures and Policies Directors serving as members the of Audit and Supervisory Committee) are as follows: To help To realize the Tohoku Electric Power Group Medium-/Long-Term Vision, decisions are made on the remuneration of Directors (not including Directors serving as members of the Audit andaccordance Supervisory with the following Committee) policy, intended in strengthen to motivation among Directors improve to businessperformance and contribute improvements to in business performance over the mediumthe long to relationship term, by clarifying between remuneration and business performance and stock prices. Policies and procedures for determining compensation for Directors for compensation and procedures determining for Policies Based on the above policies, to enable more objective, timely, and transparent decision-making, the Nomination and and Nomination the decision-making, transparent and timely, objective, more enable to policies, above the on Based the including Directors, independent outside multiple members include whose Advisory Committee, Remuneration chair, deliberates on the appointment. A decision is made by the Board of Directors. For candidates for Directorsserving as members of the Audit and Supervisory Committee, the consentof that Committeesubmission is obtained the to Board before of Directors. The Audit and Supervisory Committee Supervisory and Audit the serving members of as Directors may for also candidates including (not present Directors candidate opinions on Committee) and submit them the to General Meeting of Shareholders. Whether candidates for Directors from outside the Company are independent or not shall be judgedof the Independence on the basis Criteria for Outside Directors set by the Company. Candidates for Directors from outside the Company (excluding candidates serving as membersSupervisory of the Audit and Committee) shall be selected by evaluating whether candidates canmaking work realize to and management proper decision- supervision by the Board of Directors, based on practical experiencecorporate grounded management in and other factors and insights into social, economic, and other trends. Candidates for Directors serving as members of the Audit and Supervisory Committeeevaluating shall whether be selected the candidates by can apply their respective experience and insightstheir the to proper duties execution as Audit of and Supervisory Committee members and the to audit and supervisionDirectors. Candidates of job execution for by Directors from outside the Company serving as members of the AuditCommittee and Supervisory shall be selected by evaluating whether the candidates can perform audits perspective. neutral and and supervisionobjective from an In selecting and dismissing Directors, the Nomination and Compensation Advisory Committee, including two or or two including Advisory Compensation Committee, and Nomination the Directors, dismissing and selecting In more independent outside Directors, shall convene discussions secure to the objectivity, timeliness,transparency and of their selection and dismissal. Candidates for internal Directors (not including candidates for Directors servingSupervisory as membersof the Audit Committee) and are chosen from individuals with a wealth of experienceconsideration in each field, based of a sound on a balance among technical expertise and a wealth of business experiencedistinguishing with the features of the electric power industry, which involves new and general, high in business electricity specialization the of experiences the concerning knowledge domains, business and a broad range of business fields, among other matters, thereby helpingto achieveTohoku the Electric Power Vision. Group Medium-/Long-Term The Board of Directors shall have members whose numbers are necessary and appropriatemanagement for building systems effective in a company active in the electricity business and for monitoring substantiveand business discussions execution. The Board of Directors shall consist of an appropriate number of members,or as fewer, totaling specified 18 in the Articles of Incorporation. Procedures Policies

The Company seeks administer to businesses reshape to their value alongside local communities adapting by anticipated to changes in the management environment and engaging in sustained dialogue with stakeholders, thereby maintaining the role of ElectricTohoku Power Group a group companies of that grow alongside and provide essential functions within communities. The Company has adopted the following its administer to Directors dismissing and nominating for procedures and policies businesses appropriately. Policies and procedures for appointing and dismissing members team for candidates and nominating executive Directors the Board by Directors of Corporate Governance Corporate

Tohoku Electric Power Group Progress on Business Financial Corporate Introduction Message from About Tohoku Electric Our Vision Strategies Foundations to Support Top Management Power Group Corporate Value Creation Information Information 68 5 Steady of initiatives of implementation implementation 4 plans the Board on the content of Deliberation in 3 issues plans for for plans Preparing Preparing solutions to to solutions 2 and of issues results of Analysis of assessment assessment identification identification 1 the Board by (Questionnaires) each Director each the efficacy of of efficacy the Assessment of of Assessment Process of assessing the efficacy of the Board The Company undertakes a questionnaire survey Directors of assess to the Board of Directors’ effectiveness and reports the findingsof the surveyto the Boardof Directors annually. Based on the survey findings, the Boardof Directors shares its understanding theof existing conditions and opinions for bettering the conditions and the like, assesses the effectiveness the of Board Directors of as a whole, and confirms initiatives for improving effectiveness, the Board’s among other things. regular discussionsIn FY2019, were held with theBoard Directors of and outside Directors enhance to deliberations on management policies and strategies. In addition expandingto the range duties of delegated from the Board individual to Directors, a structure was developed enhanceto supervision Group of companies, including the power transmission and distribution company spun off as an independent entity in April enhance To deliberations2020. still further and train to the next generation of candidates for Director positions, measures were implemented such as having persons other than Directors attend meetings the of Board Directors. of suchTaking initiatives account, into the Companyassessed that the latest questionnaire survey findings show the Board of Directors’ generally guaranteedoverall effectiveness, but initiatives for further improvement must be continued make to the Board more effective at a Board Directors’ of meeting held in March 2020. Having positioned FY2020 as a year for assessing the validity measures of implemented date andto intended improve to efficacy, efforts thisyear focused on revising the structure related of materials clarify to the points key deliberations of in the Board of Directors and follow to up on developing structures improve to supervision Group of Efforts company. distribution and transmission power the including member companies, will also continue in areas such as enhancing support for outside Directors providing by sites. business and facilities Company touring opportunities for Assessment of the Board of Directors’ effectiveness Directors’ of Board the of Assessment - - 92 (FY2019) Amount paid paid Amount (millions yen) of compensation - - 10 recipients Number of compensation compensation Stock options for stock-based - - - Amount paid paid Amount (millions yen) of Bonuses - - - recipients Number of compensation compensation Sum of compensation for each type each for compensation of Sum 72 26 yen) 292 (millions of Amount paid paid Amount 7 1 Compensation 12 recipients Number of compensation compensation 72 26 etc. yen) 384 Sum of (millions of compensation, compensation,

Directors Committee Directors Directors Outside Directors) and Supervisoryand Supervisory Committee. The Company has four additional Directors serving as members of the Audit and Supervisory and Committee Audit the of members serving as Directors additional four has Company The Supervisory Committee. one and Directors two for compensation includes above specified Directors the for Compensation Directors). outside three (including Corporate Auditor who stepped down at the end of the 95th Ordinary General Meeting of Shareholders held on June 26, 2019. compensation linked medium- to and long-term business results results. business are about short-term with 80% linked compensation and is which 20%,bonus, respectively. The Company has not paid a share prices and the like as indicators. Meeting of Shareholders held 2018) are on June as follows. 27, Supervisory Compensation and Committee).Audit the of members as serve who Directors less shallor five be including paid less, or the to number (18 Incorporation ofArticles Directors of prescribed in the Classifications for for Classifications Stock options for stock-based compensation stock-based for options Stock Compensation Supervisory Committee and (excluding Directors serving Outside DirectorsOutside Membersof the Audit (excluding outside Directors) as members of the Audit and Directors (excluding Directors serving as members of the Audit and Supervisory Committee): 180 million yen yen million Supervisory and Audit Committee): 180 the of members serving as Directors (excluding Directors or fewer per business year Directors (excluding Directors serving as members of the Audit and Supervisory Committee): 43 million yen or or Supervisory yen and million Audit Committee): 43 the of members serving as Directors (excluding Directors fewer per month Directors serving as members of the Audit and Supervisory Committee: million 12 yen or fewer per month (Notes) As of March 2020,1. there 31, were Directors 13 (including three outside Directors), excluding those serving as members of the Audit and The2. ratio of monthly compensation paid as fixed compensation and the ratio of stock options for stock-based compensation paid as 3. In allotting share acquisition rights, which are stock options for stock-based compensation, the Company adopts fair values based on Compensation4. limits based on a General Meeting of Shareholders’ resolution (a resolution reached at the 94th Ordinary General Compensation for Directors, for Compensation etc. Corporate Governance Corporate

Tohoku Electric Power Group Progress on Business Financial Corporate Introduction Message from About Tohoku Electric Our Vision Strategies Foundations to Support Top Management Power Group Corporate Value Creation Information Information 69 12/12(100%) 10/10(100%) Board of Directors Board of Directors Reasons for appointment for Reasons Reasons for appointment for Reasons State of attendance of State State of attendance of State Hirohiko Ito Director & Managing Executive Officer Since joining the Company, Ito has primarily been involved familiar is He divisions. sales the to assigned activities in as general, in businesses Company’s the with demonstrated by past service as Executive Officer and General Manager of the Sales Department and as Managing Executive Officer. Ito served as Director and a Managing Executive Officer from JuneThe 2019. Company reappointed himas Director based on his extensive general and Company the within experience business management. business electricity of knowledge Jiro Masuko President Vice Executive & Director Representative Since joining the Company, Masuko has worked in nuclear the to assigned those on centered businesses Company’s the with familiar is He divisions. power businesses in general, as demonstrated by past service as an Executive Officer and the General Manager of the Aomori Branch Office, and as Executive Officer and General Manager of the Nuclear Power Department. Masuko has served as Managing Director since June and as 2015, a Representative Director and Executive Vice President since April The 2018. Company reappointed him as Director in light of his extensive business experience within the Company management. business electricity of knowledge general and 12/12(100%) 10/10(100%) Board of Directors Board of Directors *Actualattendance is shown for FY2019. *Attendance for Hirohisa Yashiro and Hirohiko Ito is for meetings of the Board held since June 26, 2019. Reasons for appointment for Reasons Reasons for appointment for Reasons State of attendance of State State of attendance of State Hirohisa Yashiro Director & Managing Executive Officer Since joining the Company, Yashiro has primarily been He divisions. planning the to assigned activities in involved as general, in businesses Company’s the with familiar is demonstrated by past service as the General Manager of the Corporate Planning Department and as a Managing Executive Officer.Yashiro served as Director and a Managing Executive Officer from JuneThe 2019. Company reappointed himas Director based on his extensive general and Company the within experience business management. business electricity of knowledge Shinichi Okanobu President Vice Executive & Director Representative in worked has Okanobu Company, the joining Since planning to assigned those on centered businesses in businesses Company’s the with familiar is He divisions. general, as demonstrated by past service as the General Manager of the Group Business Department and as Executive Officer and General Manager of the Corporate Managing served Okanobu as Department. Planning Director from June as an 2013, Executive Vice President from June and as 2015 a Representative Director and Executive Vice President from April The 2018. Company reappointed him as Director in light of his extensive business experience within the Company and general knowledge of management. business electricity 12/12(100%) 12/12(100%) Board of Directors Board of Directors Reasons for appointment for Reasons Reasons for appointment for Reasons State of attendance of State State of attendance of State Toshinori Abe Toshinori Director & Managing Executive Officer Since joining the Company, Abe has primarily been involved is He divisions. resources human the to assigned activities in as general, in businesses Company’s the with familiar demonstrated by past service as General Manager of the Human Capital Department and as Executive Officer and General Manager of the Tokyo Branch Office. Abe served as Managing Director from and June as Director 2017 and a Managing Executive Officer from April The 2018. Company reappointed him as Director based on his extensive business experience within the Company and general knowledge of management. business electricity Kojiro HiguchiKojiro President & Director Representative businesses in worked has Higuchi Company, the joining Since centered on those assigned the to thermal power divisions. He as general, in businesses Company’s the with familiar is demonstrated by past service as the General Manager of the Haramachi Thermal Power Station and as an Executive Officer and General Manager of the Thermal Power Department. He has served as Managing Director from June as a 2016, Director and Managing Executive Officer from April as a 2018, Representative Director and Executive Vice President from June and as 2019, a Representative Director and President since April 2020, in light of his extensive business experience electricity of knowledge general and Company the within management. business 12/12(100%) 12/12(100%) (as of July 2020) Board of Directors Board of Directors Reasons for appointment for Reasons Reasons for appointment for Reasons State of attendance of State State of attendance of State Since joining the Company, Yamamoto has primarily been He divisions. accounting the to assigned activities in involved as general, in businesses Company’s the with familiar is demonstrated by past service as Executive Officer and General Manager of the Accounting and Finance Department and as Executive Officer and General Manager of the Yamagata Branch Office.Yamamoto served as Managing Director from June and as 2013 Director and a Managing Executive Officer from April The 2018. Company reappointed himas Director based on his extensive business experience within the Company and general knowledge of management. business electricity Shunji Yamamoto President Vice Executive & Director Representative Since joining the Company, Kaiwa has worked in businesses businesses in worked has Kaiwa Company, the joining Since centered on those assigned planning to divisions. He is familiar with the Company’s businesses in general, as demonstrated by past service as a Director and the General Manager of the Corporate Planning Department, and as a Senior Executive Officer and the General Manager of the Niigata Branch Office. Kaiwa served as Executive Vice President from June 2009, as the President from June and as 2010, a Representative Director and the Chairman of the Board from June The 2015. Company reappointed him as Director based on his extensive general and Company the within experience business management. business electricity of knowledge Makoto Kaiwa Representative Director & Chairman of the Board Directors Corporate Governance Corporate

Tohoku Electric Power Group Progress on Business Financial Corporate Introduction Message from About Tohoku Electric Our Vision Strategies Foundations to Support Top Management Power Group Corporate Value Creation Information Information 70 -/-(-%) -/-(-%) Board of Directors Audit and Supervisory Committee Reasons for appointment for Reasons State of attendance of State Kazuo Kobayashi Director & Audit and Supervisory Committee Member Director) (Independent Director) (Outside Kobayashi is a Standing Statutory Auditor of the Nippon Life of knowledge considerable has He Company. Insurance financial affairs and accounting. The Company appointed him as an Outside Director and an Audit and Supervisory apply will he that expectations on based Member Committee his extensive experience and rare insights toward the the supervision of and audits impartial providing of objective Company based on his past career and performance record. -/-(-%) 10/10(100%) 10/10(100%) Board of Directors Audit and Supervisory Committee Board of Directors Reasons for appointment for Reasons Reasons for appointment for Reasons State of attendance of State State of attendance of State As university professor, Miyahara has experience in the support on research resources, regional of use real-world joint and earthquakes, major following reconstruction for The projects. academic and government, industry, and Director Outside as Miyahara appointed Company on Supervisory based and Member Committee Audit expectations she will apply her extensive experience and rare insights gained in her academic career toward the supervision, and impartial audits providing of objective drawing on her past career and performance record. Osamu Kawanobe Osamu Director) (Independent Director) (Outside Director Kawanobe is Representative Director and President of JR include positions held Previously Co. Mechatronics East those ofRepresentative Director and Vice President of the East Japan Railway Company. He brings a wealth of experience in managing public-interest businesses and in other areas. The Company appointed Kawanobe as an Outside Director based on expectations that he will apply his extensive experience and rare insights the to management of the Company based on his past career and performance record. Miyahara Ikuko Director & Audit and Supervisory Committee Member Director) (Independent Director) (Outside instruments exchange on which Company shares are listed. *Actual attendance is shown for Osamu FY2019. Kawanobeand Kazuo Kobayashi were appointed on June 2020. 25, *Attendance for Ikuko Miyahara is for meetings of the Board and the Audit and Supervisory Committee*The independence held since June of independent 26, 2019. Directors is judged based on the standards for independence established by the financial 12/12(100%) 12/12(100%) 12/12(100%) Board of Directors Audit and Supervisory Committee Board of Directors Reasons for appointment for Reasons Reasons for appointment for Reasons State of attendance of State State of attendance of State Chiharu Baba Supervisory and Audit Committee and Director Director) (Independent Director) (Outside Member Baba has served in various successive posts, including Representative Director and Deputy President of Mizuho Trust & Banking Co. He brings with him considerable knowledge of financial affairs and accounting. The Company appointed him as an Outside Director and an on Supervisory based and Member Committee Audit expectations that he will apply his extensive experience and rare insights toward the objective of providing impartial audits and supervision of the Company based on his past record. performance and career Tsutomu Kamijo Tsutomu Director) (Independent Director) (Outside Director and Chairman including positions served in has Kamijo Director of Sapporo Holdings Ltd. and brings experience in sells and manufactures that company a managing Company The products. other and foods beverages, appointed Kamijo as an Outside Director based on expectations that he will apply his extensive experience and rare insights the to management of the Company based on his past career and performance record. 12/12(100%) 12/12(100%) 12/12(100%) (as of July 2020) Board of Directors Audit and Supervisory Committee Board of Directors Reasons for appointment for Reasons Reasons for appointment for Reasons State of attendance of State State of attendance of State Since joining the Company, Kato has primarily been involved is He divisions. planning the to assigned activities in well-versed in the Company’s overall activities, experience gained in service as Executive Officer and General Manager of the Aomori Branch Office and as Director and General Manager of the Corporate Planning Department. The Supervisory and Audit and Director him appointed Company Committee Member in June in light 2018 of his extensive served he where Company, the within experience business as a corporate auditor from as June well 2012, as his audits. and management business electricity of knowledge Koki Kato Director & Audit and Supervisory Committee Member Kondo has served in positions including that of of that including positions served in has Kondo Representative Director and Chairman of Ricoh Ltd. Co., and manufactures that company a managing in experience brings optical devices, office machines, and other products. The Company appointed Kondo as an Outside Director based on expectations that he will apply his extensive experience and rare insights the to management of the Company based on his past career and performance record. Shiro Kondo Director) (Independent Director) (Outside Director Directors Corporate Governance Corporate

Tohoku Electric Power Group Progress on Business Financial Corporate Introduction Message from About Tohoku Electric Our Vision Strategies Foundations to Support Top Management Power Group Corporate Value Creation Information Information 71 Osamu Kawanobe Osamu Director) (Outside Director We playWe an important role as a company involved in the infrastructure social the in worked have I infrastructure. social of railroads for 40 years with JR East, including its time as the Japan National Railways. Of this time, spent I years 10 in public relations and crisis management, 30 years in work related goals to such as safe and stable transport in the railway business andenhancements of rail networks, and, for my last five years with JR East, in rail safety management as the person responsible for all aspects of society, in the post of safety coordination make JR East manager. To a railway customers could depend on with peace of mind, I advanced various initiatives, in terms of both tangibles and intangibles, targeting the goal of “ultimate Safety safety.” involves taking on a succession of challenges without compromise, with the goal of protecting human life. As an Outside Director, I will play a role in enhancing management improving by governance corporate transparency through participation in management from diverse perspectives. While these are times of dramatic changes in the business environment, as seen in thelifestyle changes brought pandemic, about the by COVID-19 I intend putto use to my experience through now in making various recommendations help to increase corporate value, to enable the sustained growth of the Company even under difficulties ongoing in the Despite circumstances. such business conditions, I will seek make to it possible for us to take on the challenges of creating value turning by crises opportunities. into Tsutomo Kamijo Tsutomo Director) (Outside Director The essence of our governance is found in nothing less than how well we demonstrate and putinto practice our slogan, Sou, ChikaraYori, (The StrengthWork to Alongside). From a long-term perspective, our business strategy based our electricity through of supply stable reliable, safe, the on business execution, is reflected in the Medium-/Long-Term Vision announced in February Proactive 2020. contributions theto realization of a carbon-free society, a subject of increasing demands in society, will also be contribute brand. corporate our of power the enhancing to significantly For this reason, I believe it is vital avoid to being unduly a single in results financial impacting factors by affected year alone, like the effects of growing competition in the market, with the deregulation of the electric power industry and the effects of time lags in the fuel cost adjustment system. Instead, we must strive carry to out management that will enable the sustained growth of our community and society. It is also essential explain, to with care and accuracy, our to diverse stakeholders matters related to the state of implementation of such management. Timely and appropriate provision of information is the foundation of trust. The essence of practicing good governance is the effort build to up a brand reputation based on the trust we now. community through the earned from have emissions and 2 Shiro Kondo Director) (Outside Director The business environment in which the Company operates including reasons, various for harsh increasingly growing is the deregulation of the electric power industry, the statutory separation of the power generation and distribution businesses, and issues related resumption to of nuclear power generation, in CO on regulations rigorous more ever to addition Messages from outside Directors outside from Messages Corporate Governance Corporate coal-fired thermal power generation. In addition, the population of the region Tohoku is shrinking and aging at an ever-accelerating pace due low to birth rates, creating still greater challenges for Electric Tohoku Power than facing power companies in the greater area Tokyo or other major metropolitan markets. Under such conditions, achieving sustained growth even with extraordinary effort would be a major challenge. theAt same time, the Company’s Medium-/Long-Term Vision calls for “Prosperity in Partnership with theCommunity.” Our vision of realizing a smart society while working alongside the community support to the economy and living involves the lifeline of the six prefectures Tohoku and Niigata we Prefecture. Today, stand at a major turning point that also poses the opportunity for rebirth—from a company specializing in power generation, transmission and distribution, and sales one to focused on the secure services. service must deploying In we businesses, proactive participation of local residents, work together with local governments, and realize industry-academic cooperation.have We a wealth of experience and a solid track record in cooperation with those difficulties as numerous such overcome to communities our caused earthquakes by and water damage. Henceforth, our true abilities will be tested as we strive achieve to the goals Sou, of our Chikara Yori, (The Strength Work to Alongside)” slogan. confident I’m this vision will help us generatea smart society and new services here in the region. Tohoku Surely it is in times of major challenge when we must find the strength and power needed generate to new industries and new innovations.

Tohoku Electric Power Group Progress on Business Financial Corporate Introduction Message from About Tohoku Electric Our Vision Strategies Foundations to Support Top Management Power Group Corporate Value Creation Information Information 72 Kazuo Kobayashi Supervisory and Director/Audit (Outside) Member Committee I was appointed an outside Director/Audit and Supervisory Committee Member in June I believe 2020. the roles of the business transmission/distribution and generation power as part of the social infrastructure willcontinue grow to in importance ensuring by safety and reliability in the processes of creation, distribution, and utilization of electric whichpower, is transformed through various devices and machinery into light, heat, and driving power. The understanding and support from the customers of the ElectricTohoku Power Group, as well as its shareholders, partners, members of the local community, employees, and various other stakeholders will make it possible to fulfillToday this we face role. wide-ranging transformation and changes in society, the economy, and the natural environment. In the face of such structural changes, it is my hope that I will be able contribute to drawing by on my own perspectives as an outsider the Electric to Tohoku Power Group and increase to its corporate value and meet the stakeholders. of expectations Ikuko Miyahara Ikuko Supervisory and Director/Audit (Outside) Member Committee One full year has passed since I assumed officeTohoku as Electric first Power’s female outside Director 2019. in During as this a member year, of the Audit and Supervisory Committee, worked I’ve in the area of auditing by Supervisory and Audit the of meetings monthly attending Committee and Board of Directors meetings. Last year saw many major developments, including the final review in preparation for resumption of operations at the Onagawa Nuclear Power Plant, adjustments during the final stage of spinning off the power transmission and distribution segment as a separate entity, and the formulation of the Medium-/Long-Term Vision. It is clear me to that decisions of the Board of Directors were made with support from various related sections and repeated careful investigations and deliberations. also We needed participate to in urgent investigations in response problems to that arose at other power companies. I got a true feel for how daily activities are conducted and an awareness of compliance and governance issues. Last I was able year, deepen to my understanding of how power is generated from diverse sources touring by sites like the Onagawa Nuclear Power Plant, hydroelectric power plants in the Aizu area, and thermal power plants in the Niigata area. In addition, as a female outside Director, I with dialogue in engage opportunities to numerous had female employees and participate to in seminars for Group company employees, among other activities in what proved be to a truly enriching I intend year. help to create an environment Electric at Tohoku Power in which diverse human resources can thrive and in which the activities of women in the organization will advance still further. Director/Audit and Supervisory and Director/Audit (Outside) Member Committee Chiharu Baba The deregulation of the electric power system has brought on what could be called the second starting point for the power industry. Amid dramatic change, it is vital to and system governance corporate appropriate an maintain of consideration In foundations. solidify management to the strongly public nature of the power business and its deep ties communities to and the economy in particular, I ordinary an than important more significantly is it believe business enterprise. In recognition of this fact, in 2018 ElectricTohoku Power shifted a company to structure Supervisory and established Audit and an Committee with Advisory Committee, Remuneration and Nomination a among other measures intended improve to its governance structure. In addition, it also reviewed the operation of the Board of Directors, intensify to further its deliberation on managementkey topics such as strategy, and is holding the and Directors between outside dynamic discussions frank highly are These discussions Director. Representative and broad-minded, and they are considered be to a sign of governance. corporate of efficacy the environment, business the for prospects future toward Turning as a business grows moremultifaceted and diverse, and use of not only the Company itself but also its subsidiaries and other partners in taking on business challenges broadens, management Group appropriate an developing believe I structure handle to these changes will emerge as an important issue. I intend continue to fulfilling my responsibilities as an outside Director based on these perspectives. Messages Director/Audit from outside and Supervisory Committee Members Corporate Governance Corporate

Tohoku Electric Power Group Progress on Business Financial Corporate Introduction Message from About Tohoku Electric Our Vision Strategies Foundations to Support Top Management Power Group Corporate Value Creation Information Information 73 (managers equivalents) and (deputy general managers of offices, offices, of managers (deputy general (General Managers of offices and departments) and offices (General of Managers Crisis managers Crisis crisis including operations, management crisis of control Overall prevention and prediction reporters management Crisis Overallcontrol of reporting operations inthe event of an emergency crisis of awareness promote to activities of implementation and management promotors management Crisis operations management crisis day-to-day of Implementation departments, others) and Response system and duties of offices and departments prevention Recurrence Recurrence Responding to emergencies to Responding In the event an of emergency, in addition performing to the necessary initial actions, various actions based on swift and appropriate response are taken in cooperation with related parties minimize to damage. In the event an of emergency requiring immediate judgement and decision-making top by management, an emergency task force is set up under the leadership the of president the of president. the by appointed person other or director or company relevant As necessary, related executives or sections the of other company will also join the emergency task force, enabling the two companies respond to the to matter as a united team (except where doing so would violate restrictions on their behavior). Preparedness during normal times to sensitivity increase to autonomously strives site and section each times, normal During preventive including activities, other and drills, activities, raising awareness through risks measures such as equipment-related measures prevent to crises from occurring. activities autonomous the on up follows Secretariat Committee Management Crisis the addition, In communication on drills and management crisis on e-learning through site and section each of informationof in an emergency for all employees. Crisis risks are identified and assessed from business Company’s the to inherent risks major the considering through perspectives multifaceted from the three perspectives financial of risks, business risks, and emergencies. promote awarenessTo risk of management groupwide,activities seek intensify to on drills and companies member Group individual with dialogue through cooperation communicating information in the event an of emergency. Center Emergency Emergency (crisis response)(crisis Communication Emergency President, or executive responsible for for responsible executive or President, charge in section Leader: Presidents, executive appointed by gathering gathering Crisis management management Crisis Information Information Initial Initial Task Force Task Emergency Emergency measures Setup of an emergency center by the department in charge situations emergency against measures response of Implementation Education Training Risk management Risk (preliminary crisis response)(preliminary crisis activities education Planning crisis management management crisis Planning manuals and standards Developing and training Implementing Planning Normal times Crisis Crisis prediction Chair: Vice President Vice Chair: Deputy-chair: Vice President or Managing Director heads Members: Section Crisis managementat Tohoku Electric Power and Tohoku Electric Power Network Crisis Crisis assumption Crisis Crisis Risk assessment assessment Risk Committee Management Management Situation Situation (preliminary crisis evaluation) identification and evaluation of of evaluation and identification with communication and risks, offices Grasp of emergency situations, situations, emergency of Grasp comprehension Crisis management structure management Crisis We have alsoWe established individual Crisis Management Committees (chaired the by respective Vice Presidents) promote to crisis management activities and run to through Crisis these twice annually, Meeting (PDCA) cycles. plan-do-check-act corresponding the fiscal the during activities assessing as such carry Committees Management activities out year and sharing risk information, as well as deliberating on action plans for the next fiscal The resultsyear. are reported the to Management Committee. In light the of need for a crisis management structure under which Electric both Tohoku Power and Electric Tohoku Power Network can work together even after the statutory division into companies. both for jointly meet will Committees Management Crisis the entities, separate Crisis Management Committees Management Crisis Crisis management standards management Crisis company on impacts serious potential with crises various of anticipation prior on Based management, Electric Tohoku Power and Electric Tohoku Power Network have each established crisis management standards intended prevent to crises from occurring and to minimize damage in the event that they arise. Corporate Governance Corporate

Tohoku Electric Power Group Progress on Business Financial Corporate Introduction Message from About Tohoku Electric Our Vision Strategies Foundations to Support Top Management Power Group Corporate Value Creation Information Information 74 Content of operations of Content and responding failures to and impediments and systems telecommunications information for impediments systems security telecommunications stable of maintenance to related those as such conditions, societal for responses emergency electricity and of supply etc.) media, the customers, government, inspections, and response to failures and impediments and failures response to and inspections, facilities as required law by Procurement and acceptance of fuel, materials, and supplies inspection, maintenance, line distribution and transmission Power Grid operation, monitoring, and responding failures to and impediments Operation, monitoring, and responding failures to and Operations other than the above that need be to continued account to External response operations other than the above (dealing with demands or conditions social to response in operations Other Operations of the infectious disease response organization response disease infectious the of Operations maintenance, monitoring, operations, substation and plant Power Maintenanceand security operations (patrols, inspections, etc.) for

Operations other than the above Priority Priority diseases operations Operations in response response in to infectious infectious to (Those requiring requiring reduced or suspended or reduced Operations that can be Category of operationsCategory of Important continuation) operations Operations essential to business continuity are identified as priority operations. In addition addition In priority operations. as identified are continuity business to essential Operations operationsto related responding to an to infectious disease, both are identified as important operations. Those thatcan be reduced or interrupted are grouped into the category other of operations. This is intended ensure to that we can fulfill our role key as a elementof the social safety. priority on a electricity with of supply stable a provide to continuing by infrastructure operations of important Teams in charge Group businesses team businesses team Public relations relations Public Task force secretariat force Task managers, staff members managers, Leader/deputy leader/members Leader/deputy deputy general secretary, managers, deputy deputy managers, secretary, general deputy General secretary, assistant general secretary, secretary, general assistant secretary, General team General affairs Human Human resources team resources The novel influenza task force at the head office Our roles as a designated public utility Asa designated public utility under the Act on Special Measures for Pandemic Influenza and New Infectious Diseases Preparedness and Response, we are required prepare to business plans for responding pandemic to influenza and new infectious diseases. These plans seek contribute to the to swift and appropriate implementation measures of carried out Electric Tohoku by Power and Electric Tohoku Power Network in the event of a novel influenza outbreak or a rapid nationwide epidemicof a novel infectious disease,to first. safety putting electricity while of supply stable ensure Based on these plans, we strive maintain to internal systems and implement thorough in even electricity of supply sable the ensuring in roles our fulfill reliably to order in responses the event such of infectious diseases. Our response to COVID-19 responseOur to The Company has implemented a widerange health of management measures for both employees and their family members counteract These to include the spread COVID-19. of use flextime of and staggered working hours, working from home, decentralizing working areas, and reminding employees wash to their hands,other gargledisinfectant, when alcohol-based using office possible,and the entering when and masks be wear careful to to employees when requiring coughing. to addition in electricity, of supply stable the ensuring in involved sites business At measures include having shift employees commute private by vehicle and defining special flow lines inside buildings to reduce personal contact otherwith employees. Through these and other measures, taken thorough we’ve measures develop to systems that prevent infection and eliminate potential impediments the stable to supply electricity of in the event infection. of Corporate Governance Corporate

Tohoku Electric Power Group Progress on Business Financial Corporate Introduction Message from About Tohoku Electric Our Vision Strategies Foundations to Support Top Management Power Group Corporate Value Creation Information Information 75 Power distribution recovery work on a temporary road built by the Japan Self-Defense Forces transport. It is expected reduce to the time required complete to recovery work by enabling mobilemore safely transmission in isolated locations of power and remote islands. Loading a portable generator on a Japan Self-Defense Forces craft “speedy.” and “mobile,” “Tohoku,” for stands ToMoS name The * This is the first low-voltage portable power supply vehicleto be developed by a power company in Japan suitable for air Periodic Large-ScalePeriodic Disasters Countermeasure Meetings Because we understand the importance of minimizing the impact of any large-scale disaster and achieving early restoration, we hold periodic Large-Scale Disasters Countermeasure Meetings to strengthen the involvement of top executives. Chaired the by President, the meetings engage in address to measures (BCP) various planning and continuity business on companywide studies issues identified from recent emergency disaster training sessions, actual disaster response actions, and discussions of disaster control and management. All these measures are intended to activities. PDCA enhance In addition, review meetings were held following the earthquake off the Yamagata coast in June and typhoons2019 Faxai and Hagibis in September and October of the same confirm to year, results and issues in each section for lessons in future responses disasters. to outage outage by the president) the by Major power an officer designated officerdesignated an (response directed by by (response directed

Earthquake (headed by the president) the (headed by nuclear facilities facilities Damage to by the president) the by After the Great 2011 EastJapan Integrated Emergency Center Center Emergency Integrated (response directed (response directed duties Distribution of Distribution of outage Major power Before the 2011 nuclear facilities Great East Japan Earthquake Japan East Great Damage to Headquarters president) the (headed by Extraordinary Response Disaster Tohoku Electric Power and Tohoku Electric Power Network have concluded agreements on on agreements concluded have Network Power Electric Tohoku and Power Electric Tohoku designated the Forces, Self-Defense Japan the as such organizations outside with cooperation public utility East Nippon Expressway and facilitate AEON to Ltd., Ltd. Co., Co., mutual cooperation in the event of a disaster. Under these agreements, practical drills are conducted enhance to emergency low-voltage ToMoS* the of transport include date to conducted drills The cooperation. power supply vehicle designed for air transport, sea by via Japan Self-Defense Forces craft. haveWe also concluded agreements on cooperation in response disasters to with local governments and maintain personal contact with related local government agencies on a regular basis be to ready for emergencies. As an example of such cooperation with outside organizations, in response Typhoon to Hagibis Japan Self-Defensein 2019, Forces cleared about one kilometer of road through which Tohoku Electric Power Network entered devastated areas carry to out restoration work, a demonstration of how the ability respond to disasters to has been enhanced. Enhancing the capacityEnhancing the disasters respond to cooperation to in outside organizations with Distribution duties of a complex of in the disaster event Learning from the accident at the Fukushima Daiichi Nuclear Power Station following the Great East Japan Earthquake, Electric Tohoku Power and Electric Tohoku Power Network distribute emergency center duties ensure to an effective response at their head offices in the event of a complex the Accordingly, outage. power major a with combined disaster nuclear a example, disaster—for President Electric of Tohoku Power will prioritize actions respond to the to nuclear disaster, while officers assignedby the President will oversee measuresto tackle other disasters. This system is intended ensure to the preparedness needed respond to effectively multiple to concurrent disasters. Governance structure disasters for Governance abilities their enhance to intended structure governance a developed have Network Power Electric Tohoku and Power Electric Tohoku customers, electricityto of supply stable a deliver To respondto major to disasters such as earthquakes andtyphoons. While Electric Tohoku Power Network has succeeded the power to transmission and distribution business since its statutory separation a separate into entity inApril account to 2020, for the state damage of and social impact an of emergency, both companies respond together disasters. to Corporate Governance Corporate

Tohoku Electric Power Group Progress on Business Financial Corporate Introduction Message from About Tohoku Electric Our Vision Strategies Foundations to Support Top Management Power Group Corporate Value Creation Information Information 76 See “Compliance” ESG Data Book, pp. 31–33. Tohoku ElectricTohoku Power Electric and Tohoku Power Network have always done business while complying with business ethics, laws, and regulations as an important precondition all of business activities. As such, established we a Committee on Corporate Ethics and Compliance chaired the by Presidentand run through the PDCA cycle diligently ensure to that our initiatives are adequate in light social of needs and to make any improvements found necessary. In response the discovery to a case of executives of and employees accepting money and gifts at another power company conducted we in September an internal 2019, inspection related of executives and The others results in October showed 2019. that our compliance efforts were functioning properly, with no cases receipt of money of or gifts exceeding socially acceptable levels, or receipt of special of treatment. theAt same time, in recognition the of fact that compliance-related issues require organizational responses, established we’ve contact points for consultation and procedures notifyto the Company compliance of properly issues. We’re operating these systems to support individuals who are unsure what do or respond to how to other to parties. In addition, received we 2020, on April a demand 6 and 21, for reporting under Article Paragraph106, the 3 of Electricity Business Act from the Ministry and Trade Economy, of Industry,seeking investigation and reporting on the presence or absence any of cases similar the one to described above. and On responded we 30, April 17 that no similar cases had been identifiedTohoku ElectricTohoku at PowerElectric or Power Network. In the future as well, will we continue efforts ensure to that each and every employee implements thorough compliance in accordance with Electric the Tohoku Power Group Code Conduct, of keeping firmly in mind at all times the needto do business in fair and appropriate paying ways, close attention how our to customers see continue us, to to be worthy the of trust customers of in our community. Enhancement of compliance Enhancement of Corporate Governance Corporate

Tohoku Electric Power Group 77

Tohoku Electric Power Group Progress on Business Financial Corporate Introduction Message from About Tohoku Electric Our Vision Strategies Foundations to Support Top Management Power Group Corporate Value Creation Information Information 78 0 50 (FY) (FY) 150 100 200 (Yen) 126.32 630 2019 20 20 40 2019 93.12 464 2018 20 20 40 2018 Interim dividend (left axis) 94.61 472 2017 40 20 20 2017 140.10 699 2016 15 35 20 2016 973 2015 25 15 10 2015 Net income per share (right axis) Year-end dividend (left axis) 195.01 0 0 200 400 800 600 10 20 40 30 1,000 (Yen) (100 millions of yen) of millions (100 Net income attributableowners to parent of Dividends per share and net income per share (FY) (FY) 2.7 8.1 999 2019 2019 657 2018 6.2 2.0 2018 Return on equity on Return 884 6.6 2017 2.6 2017 10.6 3.1 2016 1,047 2016 Return on assets 2015 1,526 15.8 4.6 2015 0 500 5 0 15 10 20 1,500 1,000 2,000 (100 millions of yen) of millions (100 (%) Return on assets (ROA) and return on equity (ROE) Ordinary income 0 8 4 0 12 16 20 (%) (FY) (FY) 500 1,500 1,000 2,500 2,000 18.3 8,641 1,163 2019 2019 (100 millions of yen) of millions (100 43,230 22,463 17.9 8,337 836 2018 Netassets (left axis) 2018 42,586 22,443 17.3 7,9 87 1,076 2017 2017 42,221 20,713 16.8 7,556 1,304 2016 Operating income (right axis) Operating revenue(left axis) 2016 Equity-to-asset ratio (right axis) ratio Equity-to-asset Total assetsTotal (left axis) 41,459 19,495 15.2 6,843 1,897 2015 2015 41,524 20,955 0 0 5,000 10,000 15,000 10,000 20,000 25,000 50,000 40,000 20,000 30,000 (100 millions of yen) of millions (100 Total assets, net assetsTotal and equity-to-asset ratio (100 millions of yen) of millions (100 Operating revenue and operatingOperating income revenue Financial/Non-Financial Indicators

Tohoku Electric Power Group Progress on Business Financial Corporate Introduction Message from About Tohoku Electric Our Vision Strategies Foundations to Support Top Management Power Group Corporate Value Creation Information Information 79 0 0 10 20 50 40 30 (%) 1.0 0.4 0.6 0.8 0.2 (FY) (FY) /kWh) 2 0.521 (kg-CO 6 2019 2019 35 34,890

6 2018 2018 35 36,230 0.528 emission factors 2 2 2017 2017 37,550 13 0.523 emission factors (right axis) (right factors emission 2 emissions (left emissions axis) 2 2 CO 2016 2016 CO 40,550 13 0.548 ) Ratio total to directors (right axis) 2 Number of outside directors (left axis) directors outside of Number 1 2015 2015 41,940 6 0.559 emissions and CO 0 2 8 6 4 2 0 10 10,000 20,000 50,000 40,000 30,000 (thousand tons CO tons (thousand (as of the end of March 2020) Governance CO Trend in ratio outside of Trend directors

0 (FY) (FY) 500 1,500 1,000 2,500 2,000 (times) 2019 2019 46.5 16,658 1,130 46.7 2018 2018 19,753 1,328 46.2 2017 2017 21,245 1,499 46.3 2016 2016 18,833 1,294 45.7 2015 2015 19,518 Number of implementations (right axis) (right implementations of Number Number of participants from Tohoku Electric Power (left axis) Power Electric Tohoku from participants of Number 1,549 0 0 5,000 50 40 45 15,000 10,000 25,000 20,000 The environment The (low calorific value standard) value calorific (low (%) Results of joint efforts joint Results of community with Thermal efficiency stationsthermal at power 0 5 0 15 10 25 20 (FY) (FY) 200 400 800 600 1,000 (years) (thousand) 684 37 266 17.66 22.6 17.6 2019 2019 67.11 36 239 16.22 18.6 22.6 2018 2018 68.88 29 245 548 Women newly recruited (left axis) Wholesale (leftWholesale axis) 13.65 18.7 22.5 2017 2017 72.00 28 239 435 8.85 2016 18.9 22.4 2016 74.26 Yorisou e-Net membership (right axis) e-Net Yorisou Retail (left axis) 20 197 210 8.87 17.5 21.3 2015 2015 75.06 Average tenure at company for men (right axis) Average tenure at company for women (right axis) Men newly recruited (left axis) 58 0 0 20 40 80 60 100 200 500 400 300 100 Society Number newly of recruited personnel and average tenure at company (TWh) Business activities Electric sales power and others Financial/Non-Financial Indicators

Tohoku Electric Power Group Progress on Business Financial Corporate Introduction Message from About Tohoku Electric Our Vision Strategies Foundations to Support Top Management Power Group Corporate Value Creation Information Information 80 197 618) 895) 288) ( ( ( 2,613 1,120 5,061 1,330 6,564) ( 33,253 22,390 71,935 39,685 18,332) 16,727) ( ( 144,616 205,984 242,869 809,454 251,441 542,187 864,177 865,000 189,968 165,848 372,388 1,001,724 3,458,921 4,323,099 2,457,197 1,190,302 March 31, 2020 March 31, 198 179 908) 854) ( ( 3,072 1,013 4,873 1,373 6,788) 4,176) 5,666) ( ( ( 22,941 22,558 70,530 52,383 141,197 252,430 255,049 766,343 251,441 499,132 833,711 815,120 178,561 161,929 993,693 321,875 3,424,921 4,258,633 2,431,227 1,216,986 March 31, 2019 2019 March 31, Valuation difference on available-for-sale securities available-for-sale on difference Valuation hedges on losses Deferred Revaluation reserve for land adjustments translation currency Foreign plans benefit retirement of Remeasurements Bonds payable Bonds payable loans Long-term Reserve for restoration costs of natural disaster liabilities benefit retirement Net obligations retirement Asset revaluation land for tax liabilities Deferred Other liabilities non-current of position Current Notes and accounts payable - trade taxes Accrued Other advances Reserve for restoration costs of natural disaster Other stock Capital surplus Capital earnings Retained sharesTreasury Subscription rights to shares to rights Subscription interests Non-controlling assetsNet assets net and Liabilities Non-current liabilities Non-current liabilities Current Liabilities equity Shareholders’ income comprehensive other Accumulated Liabilities and net assets net and Liabilities (Millions of yen)(Millions of 328) 466) ( ( 3,844 67,374 27,821 24,451 21,243 30,591 99,462 107,199 644,017 244,010 224,649 108,450 187,035 402,870 254,447 589,116 255,044 670,135 118,187 226,872 403,472 357,778 174,331 143,740 369,745 159,568 4,323,099 3,679,082 2,504,659 March 31, 2020 March 31, 360) 462) ( ( 4,303 78,789 28,645 24,514 14,300 30,591 105,933 637,635 178,729 232,303 148,275 181,091 340,205 271,914 604,313 256,905 662,292 122,667 214,278 398,140 359,324 165,081 134,490 375,461 102,888 162,696 4,258,633 3,620,997 2,468,035 March 31, 2019 2019 March 31, Inventories Other current assets accounts doubtful for Allowance Cash and deposits Notes and accounts receivable - trade Deferred tax assets tax Deferred Other accounts doubtful for Allowance Long-term investments Net retirement benefit asset Loaded nuclear fuel nuclear Loaded processing in fuel Nuclear Construction and retirement in progress in retirement and Construction decommissioning power nuclear to related account Special Special account related reprocessing to of spent nuclear fuel Other electric utility plant and equipment and plant utility electric Other Transformation facilities Transformation facilitiesDistribution facilities Operational Thermal power generation facilities generation Thermal power facilities generation power Nuclear facilities Transmission Hydraulic power production facilities production power Hydraulic Investments and other assets Nuclear fuelNuclear Other property, plant, and equipment progress in Construction Electric utility plant and equipment and plant utility Electric Assets Current assets Current Property, plant, and equipment Assets yen)(Millions of Consolidated Balance Sheets Balance Consolidated

Tohoku Electric Power Group Progress on Business Financial Corporate Introduction Message from About Tohoku Electric Our Vision Strategies Foundations to Support Top Management Power Group Corporate Value Creation Information Information 81 2) ( 290 470) ( FY2019 1,965 2,939) 14,141) 50,924 ( 48,959 65,065 11,019 ) ( ( 1) ( 363 503) ( FY2018 4,312 8,925 4,900 3,883) 51,450 55,763 ( 50,863 Valuation difference on available-for-sale securities available-for-sale difference on Valuation Deferred gains or losses on hedges adjustment translation currency Foreign plans benefit retirement of Remeasurements accounted entities of income comprehensive other of Share for equity by method income comprehensive Other parent of owners to attributable income Comprehensive interests non-controlling to attributable income Comprehensive Net income Net income comprehensive Other Comprehensive income Comprehensive Consolidated StatementsComprehensive of Income (Millions of yen)(Millions of - - - - - 224 550 534 943 FY2019 7,777 6,198 8,724 1,991 3,773 3,249 8,287 5,648 17,3 31 20,414 25,108 63,074 28,702 93,768 65,065 99,966 224,117 116,350 213,525 2,155,127 2,130,018 1,916,492 2,022,251 2,246,369 2,255,093 - - 0 141 941 223 2,145 2,145 FY2018 7,873 7,9 0 0 7,9 0 0 4,379 5,533 6,840 5,968 1,100 ) ( (1,100 ) 21,735 65,743 18,762 24,730 13,861 72,598 46,483 83,633 50,863 217,676 231,613 2,185,412 2,251,155 2,012,701 2,160,681 2,244,314 1,943,004 Loss on decommissioning of Onagawa Nuclear Power Power Nuclear Onagawa of decommissioning on Loss 1 Unit Station Contingent loss on assets Extraordinary loss on disaster Reversal of reserve for fluctuating water levels damage for income Compensation Interest expenses Interest Other Other business operating expenses operating business Other Other business operating revenue operating business Other expenses operating utility Electric Electric utility operating revenue operating utility Electric Share of profit of entities accounted forby equity method Other Dividend income Interest income securities of sales on Gain Net income attributable to non-controlling interests non-controlling to attributable income Net Net income attributable owners to of parent Income taxes - deferred Income taxes income Net Income before income taxes Income taxes - current Extraordinary loss Extraordinary gain Ordinary expenses Ordinary income Provision or reversal of reserve for fluctuating water levels Ordinary revenue Non-operating expenses Non-operating Operating income Operating Other expenses (income) Operating expenses Operating Operating revenue (Millions of yen)(Millions of Consolidated StatementsIncome of ConsolidatedStatements of Income and Consolidated Statements of Comprehensive Income

Tohoku Electric Power Group Progress on Business Financial Corporate Introduction Message from About Tohoku Electric Our Vision Strategies Foundations to Support Top Management Power Group Corporate Value Creation Information Information 82 13 41 (20) (33) 125 229 155 (168) 8,152 46,483 63,074 30,465 35,005 (19,966) (19,971) (12,644) assets assets 798,705 833,711 864,177 833,711 Total netTotal Total netTotal (Millions of yen)(Millions of (Millions of yen)(Millions of 1,404 1,404 3,143 3,143 67,387 70,530 71,935 70,530 interests interests Noncontrolling Noncontrolling Noncontrolling Noncontrolling 56 56 957 107 107 1,013 1,120 1,013 shares shares rights to rights to Subscription Subscription 4,953 4,953 (4,176) (9,129) (4,176) (14,156) (14,156) other other other (18,332) income income comprehensive comprehensive comprehensive Total accumulated Total accumulated Total 8,896 8,896 (5,666) (5,666) (14,562) (11,061) (11,061) (16,727) of retirement of retirement benefit plans benefit plans Remeasurements Remeasurements 684 179 179 (468) (468) (504) (504) (288) Foreign Foreign Foreign currency currency currency translation translation translation adjustments adjustments (13) (13) (41) (41) (840) (854) (895) (854) land land reserve for reserve for Revaluation Revaluation Revaluation Revaluation Accumulated other comprehensive income comprehensive other Accumulated Accumulated other comprehensive income comprehensive other Accumulated 363 290 290 363 (908) (618) (908) (1,272) hedges hedges gains or gains or Deferred Deferred Deferred Deferred losses on on losses losses on on losses 197 6,861 3,072 3,072 (2,875) (2,875) (3,789) (3,789) Valuation Valuation Valuation Valuation securities securities difference on difference on available-for-sale available-for-sale available-for-sale available-for-sale 13 41 (20) (33) 125 229 155 (168) 46,483 63,074 43,110 26,853 Total Total Total Total equity equity (19,966) (19,971) 739,490 766,343 809,454 766,343 shareholders’ shareholders’ shareholders’ shareholders’ (20) (33) 347 223 244 313 (7,101) (6,788) (6,564) (6,788) shares shares Treasury Treasury 13 41 (88) (117) 46,483 63,074 43,055 26,413 (19,966) (19,971) 472,718 499,132 542,187 499,132 earnings earnings Retained Retained Shareholders’ equity Shareholders’ Shareholders’ equity Shareholders’ 125 125 (168) (168) 22,558 22,433 22,390 22,558 Capital Capital Capital Capital surplus surplus - - stock stock Capital Capital Capital Capital 251,441 251,441 251,441 251,441 Net changes of items other than equity shareholders’ Changes in parent ownership interests arising interests non-controlling with transactions from Dividends of surplus of Dividends Net income attributable owners to of parent shares treasury of Purchase Disposal of treasury shares Reversal of revaluation reserve for land surplus of Dividends Net income attributable owners to of parent shares treasury of Purchase Net changes of items other than equity shareholders’ Changes in parent ownership interests arising interests non-controlling with transactions from Disposal of treasury shares Reversal of revaluation reserve for land Balance at the beginning of period of beginning the at Balance Balance at the beginning of period of beginning the at Balance Changes of items during the period the during items of Changes Changes of items during the period the during items of Changes changesTotal in items during the period Balance at the end of period Total changesTotal in items during the period Balance at the end of period FY2019 FY2018 Consolidated StatementsChanges of in Equity

Tohoku Electric Power Group Progress on Business Financial Corporate Introduction Message from About Tohoku Electric Our Vision Strategies Foundations to Support Top Management Power Group Corporate Value Creation Information Information 83 237) ( FY2019 FY2019 FY2019 6,719 5,653 1,054) 3,927) 67,379 ( ( 15,856 16,233 15,191) 19,918) ( 15,800) ( 95,000) 217,000 ( 150,325 184,942 252,322 234,278 ( 317,323 ) 310,627) 257,000) 218,039) ( ( ( ( 154) ( FY2018 FY2018 FY2018 9,212 4,116 ) ( 24,150 1,0610 32,300 99,666 ( 19,871) 11,629 ) 57, 228 ) 69,307) 32,928) 242,171 ( ( ( 513,000 184,942 ( ( 194,600 119,700 ) 240,196 ) 250,570) 272,304) 491,000) ( ( ( ( ( Other, net Other, Net cash provided (used by in) financing activities Redemption of commercial papers commercial of Redemption dividends paid Cash interests non-controlling Dividends to paid Purchase of property, plant, and equipment Payments of investment and loans receivable receivable loans and investment of Collection net Other, Net cash provided (used by in) investing activities Proceeds from issuance of bonds bonds of Redemption payable loans long-term from Proceeds Repayments of long-term loans payable Increase in short-term loans payable Decrease in short-term loans payable papers commercial of issuance from Proceeds Effect of exchange rate changes on cash and cash equivalents Net increase (decrease) in cash and cash equivalents Cash and cash equivalents at beginning of the period Cash and cash equivalents at end of the period (Millions of yen)(Millions of Cash from flows investingactivities yen)(Millions of activities financing from flows Cash yen)(Millions of - 63 4,111 1,168 FY2019 7, 26 9 4,322 4,009 1,167) ( 6,465) 17,3 31 11,022 25,735 13,577 93,768 ( 12,791) 17,4 4 8 ) ( ( 227,019 371,525 400,597 26 1,164 FY2018 7,664 2,179 ) 1,165) 1,100 ) 7, 26 6 ) ( ( 3,603) 8,589) ( ( 18,762 12,636 21,983 72,598 27,15 4 ) ( ( 17,0 50 ) ( 19,550) ( ( 215,628 298,240 262,804 Net cash provided (used by in) operating activities Interest expenses paid Interest Income taxes paid Subtotal Interest and dividend incomereceived Other Increase (decrease) in notes and accounts payable - trade received deposits (decrease) in Increase Decrease (increase) in notes and accounts receivable - trade inventories (increase) in Decrease Interest and dividend income and Interest expenses Interest Increase (decrease) in net retirement benefit liabilities benefit retirement (decrease) net in Increase Increase (decrease) in reserve for fluctuating water levels Loss on retirement of property, plant, and equipment Decommissioning costs of nuclear power units power nuclear of costs Decommissioning power nuclear to related account special of Amortization decommissioning Income before income taxes Depreciation (Millions of yen)(Millions of Consolidated StatementsCash of Flows Cash flows from operating activities from flows Cash

shares % % 179,528,577 35.7 Financial institutions Financial shares % Other corporationsOther 29,248,096 shares 5.8 National and local governments local and National 20,355,038 4.0 (as of the end of March 2020) (as of the end of March 2020) % (for fiscal 2019) shares % 20.0 Foreigners shares 34.5 investors 100,390,671 100,390,671 173,712 Service Areas Aomori Prefecture, Prefecture, Iwate Akita Prefecture, Fukushima Prefecture, Yamagata Prefecture, Miyagi Prefecture, Niigata Prefecture and others Employees of Number 12,531 Electricity Sales GWh Lighting: 21,813 Power: 45,354 GWh GWh Total: 67,167 Number of Shareholders Shareholders of Number Private and other 173,360,203 Distribution of of Type Shares by Shareholders (as of the end of March 2020) 1.91 2.72 6.72 1.32 1.66 1.53 2.02 2.64 2.90 5.82 29.24 502,882,585 1,000,000,000 issued shares (%) shares issued to the total number of Ratio of shares owned 7,731 8,374 9,627 6,677 (for fiscal 2019) 10,172 13,727 14,593 33,797 13,288 29,293 (for fiscal 2019) 147,279 (as of the end of June 2020) Number of (thousand) Representative Director & Chairman of the Board shares owned (as of the end of March 2020) Total AssetsTotal 4,323 billion yen billion 4,323 revenue Operating yen billion 2,246.3 Ordinary income yen billion 99.9 Representatives Makoto Kaiwa, President & Director Representative Higuchi, Kojiro Name Kochi Shinkin Bank Shinkin Kochi JP MORGAN CHASE BANK 385151 Total The Master Bank Trust of Japan, (trust Ltd. account) Total Number of Issuable Shares Issuable of Number Total Total Number of Issued Shares Issued of Number Total Nippon Life Insurance Company Insurance Life Nippon Mizuho Bank, Ltd. Japan Services Trustee Bank, (trust Ltd. account 5) Japan Services Trustee Bank, (trust Ltd. account 9) Japan Services Trustee Bank, (trust Ltd. account) Tohoku Electric Power Employee Shareholding Association Shareholding Employee Power Electric Tohoku STATE STREET BANK WEST CLIENTSTATE - TREATY 505234 Company Name Company ElectricTohoku Inc. Power Co., Head Office Honcho, Aoba-ku, Sendai, Miyagi 1-7-1 Japan 980-8550, established Date 1951 May 1, Capital yen billion 251.4 *Due rounding, to the sum of individual figures may not equal thetotal. Figures for capital,total assets, operating revenue and ordinary income are actual figures on a consolidated basis. (as of the end of March 2020) (as of the end of March 2020) Major Shareholders Total Number Number Total Shares of Business Business Overview Corporate Information Corporate

Tohoku Electric Power Group Progress on Business Financial Corporate Introduction Message from About Tohoku Electric Our Vision Strategies Foundations to Support Top Management Power Group Corporate Value Creation Information Information 85 (FY) (FY) 3,137,078 69 685 647 372 787 297 589,127km 39 7 1 6 34 12 1 148,348km 2019 2019 2,857 139 620 297 685 587 366 37 1 7 9 6 2 37 Route distance Extended distance wire Supports New energy, etc. 2018 2018 2,694 Other Renewables Power Nuclear Facilities (as of March 2020)* 31, 38 8 7 7 3 36 177 524 349 744 587 366 Distribution 4.8MW (as of March 2020)* 31, 190MW 2017 2017 2,747 Oil 2,750MW 2,450MW Oil, etc. 11,330MW * Includes power received from other companies other from received power Includes * companies other from received power Includes * 16,720MW 58,464 4 4 2 Gas 12 Gas 231 209 15,363km 25,036km 38 6 7 5 5 38 177 432 349 364 735 586 79,410MVA 2016 2016 2,643 Coal Coal (as of the end of March 2020) 349 363 5 8 6 202 686 599 4 36 40 352 Wholesale power exchanges power Wholesale Geothermal Solar Nuclear Hydraulic distance Route length Circuit Supports 631 Thermal Total 2015 2015 2,552 FIT Hydroelectric Hydroelectric Hydroelectric Facilities Facilities 0 0 Transmission Transmission 500 75 25 50 Power Stations Transformation Transformation 100 1,500 1,000 2,500 2,000 3,000 Facility Overview capacity generation power Annual (10 MW) Annual sharesof power sources (%) Miyako Ofunato Hachinohe Thermal Hachinohe Onagawa Nuclear Onagawa Higashidori Nuclear Higashidori Mizusawa Iwate Ishinomaki Sendai Thermal Sendai Gonohe Haramachi Thermal Haramachi Shinchi Shin-Sendai ThermalShin-Sendai Higashi-Sendai Natori Minami-Soma Kakkonda Geothermal Higashi HanamakiHigashi Kamikita Sendai Higashi- Fukushima Shimokita Shizukuishi Miyagi Aomori Uenotai Iwaki Geothermal Sumikawa Sumikawa Geothermal Nishi-Sendai Akita Miyagi-Chuo Ugo Sukagawa Shinjo Yanaizu-Nishiyama Yanaizu-Nishiyama Geothermal Yonezawa Fukushima Noshiro Kitahon HVDC Link HVDC Kitahon Akita Akita Izumizaki Okitama Thermal Hondoji Kita-Tsugaru Toyomi Noshiro Thermal Noshiro Miyashita Yanaizu Nishi-Yamagata Yakuwa Uwada Numazawa Numazawa No. 2 Honna Echigo Thermal Niigata Tobishima Tobishima Honna Thermal Uonuma Minami- Chuetsu Thermal Kita-Niigata Higashi-Niigata Higashi-Niigata Awashima Niigata Niigata Thermal Kariwa Sado Ryotsu Thermal Aikawa Higashi-Joetsu Thermal Ishizone Major hydraulic power station (60 MW or more) or (60 MW station power hydraulic Major station power nuclear or geothermal Thermal, company another by operated station power nuclear or thermal Major substation Major company another by operated substation Major company another by operated station conversion AC/DC station switching Major company another by operated station switching Major (500 kV) line Transmission kV) (275 line Transmission lines kV 154 the among line transmission Major company another by operated more) or kV (275 line Transmission border Prefectural Facility Overview (as of the end of March 2020) Corporate Information Corporate

Tohoku Electric Power Group Progress on Business Financial Corporate Introduction Message from About Tohoku Electric Our Vision Strategies Foundations to Support Top Management Power Group Corporate Value Creation Information Information 86 GREENRECYCLE Corporation GREENRECYCLE Tsuken Electric Ind Ltd. Co., Manufacturing Electric Tohoku Co., Ltd. Industry Meter Electric Tohoku Co., Inc. Tohoku Electric Power Group Electric Power Tohoku https://www.tohoku-epco.co.jp/group/ Aquaclara Tohoku Corporation Tohoku Aquaclara Inc. Co., Partners Friendly Power Tohoku-Electric Tohoku Eco Techno Corporation Techno Eco Tohoku Tohoku EPCO Energy Trading Inc. Co., Trading Manufacture of equipment related related equipment of Manufacture business electric power the to Ltd. Co., Cable Electric Kitanihon Ltd. Service Densen Kitanihon Co., AIZU-GAISI Inc. Co., Corporation Pole Tohoku Transport Pole Tohoku Corporation TDG Business Support Corporation Support Business TDG Corporation Lease New Noshiro Yoshino Gypsum Co., Ltd. Co., Gypsum Yoshino Noshiro Eltas Tohoku Inc. Tohoku Eltas Corporation Tohcs Higashi Nihon Techno Survey Corporation Survey Techno Nihon Higashi Corporation YUTOS Corporation SERVICE YURTEC Corporation FUKUSHIMA TECS Corporation SERVICE MIYAGI YURTEC Corporation TECHNO HAIDEN YURTEC Corporation SERVICE KANTO YURTEC Tokyu Power Supply Ltd. Co., Tohoku ElectricTohoku Power Network Co., Inc. Environmental preservation and recycling preservation and Environmental Ltd. Co., Kankyohozen Ryokka Tohoku support business and Life HNK Inc. Co., E life Partners Ltd. Co., Synergia Power Ltd. Co., Construction and maintenance of facilities related to the the to related facilities of maintenance Construction and business electric power Corporation Yurtec Tohoku Electric Power Engineering & Inc. Co., Construction Tohoku Port Service Inc. Co., Tohoku Power Transmission and Distribution Service Inc.Co., Ltd. Co., Consultant Development Tohoku Tohoku Air Service, Inc. electricityRetail Tohoku Electric Power Co., Inc. Co., Electric Power Tohoku Tohoku Information Systems Company, Inc. Company, Systems Information Tohoku Tohoku Energy Service Inc. Co., Yurtec Vietnam Ltd. Co., Holdings Power Merit Aqua Power Tohoku Ltd. Co., (Kuji/Ajigasawa/Shiroishi/ Power Solar Kuji-Edanarisawa/Ishinomaki-Ogatsu/ Corporation Miyagi) Corporation Power Electric Fukushima Ltd. (Tomiya/Hobara/Zao) Solar Co., Yur helping to establish a smart to startinghelping age, society new a Tohoku for in A group of companies growing in step with sustained with societal progress step in by growing companies A group of Tohoku Intelligent Telecommunication Co., Inc. Co., Telecommunication Intelligent Tohoku Gas and energy solutions Nihonkai LNG Ltd. Co., Tohoku Natural Gas Inc. Co., Overseas businesses Overseas Power InvestmentTohoku Company B.V. Kyushu Tohoku Enrichment Investing SAS telecommunications and Information Power generation Power Joban Joint Power Ltd. Co., Renewable & Sustainable Tohoku Energy Inc. Co., Arakawa Hydro-Electric Power Ltd. Co., Ltd. Company Power Kyodo Sakata Ltd. Company, Power Kyodo Soma Power supply business Businesses to realize smart a society Group membercompanies Seeking realize to the ideal form for the 2030s, the 63 companies that make Electric upthe Tohoku Power Group will work as a united team demonstrate to their collective strengths. Corporate Information Corporate

Audit and Supervisory Office of Audit and Supervisory Board Member Board Member

General Education and Training Center

Transmission Line and Transmission Line Construction Office Substation Construction Center Wheeling Service Center Network Service Department

Management Management Committee Service Application – Installation Liaison Center Distribution Engineering Department

Power System Central Load Regional Load Engineering Department Dispatching Center Dispatching Center

Tokyo Office Power Plant Siting Office Land Affairs Department Supervisory Control Center

President Information Systems and Central Information and

Communications Department Communication Station OfficeBranch Power Network Center Board of Directors Civil and Architectural Engineering Department

General Affairs Department * Sado only Sado *

Tohoku Electric Power Network Co., Inc. Human Capital Department

Corporate Planning Department Service Center Engineering Center Engineering Land Affairs Center Telecommunications Telecommunications Office of Safety and Power Station (Diesel)* Quality Management

Office of Internal Audit

Research and Development Center distribution companydistribution Gas Business Department Power transmissionPower and

Lifestyle Solutions and Customer Center Niigata Office Marketing Department Business Customer Solutions Business Customer Center and Marketing Department

Sales Promotion Department Power Plant Construction Office (Thermal Power) Power Engineering Center Noshiro Plant Siting Department Thermal Power Station Energium Park Tohoku Electric Power Co., Inc. Co., Electric Power Tohoku Civil and Architectural Engineering Department Thermal Power Technical Renewable Energy Business Department Training Center Geothermal Thermal Power Department Geothermal Engineering Center Power Station

Power Generation and Sales Company Sales and Generation Power Hydropower Department Hydropower Operation Center sales businesses, etc. sales businesses, Fuels Department Tokyo Branch Customer Customer Power generatingPower and retail Services Offices Regional OfficeRegional Energy Supply and Aizu Wakamatsu Office of Audit and Supervisory Committee Committee Management Business Strategy Department Demand Operation Center Branch Offices Nuclear Power Operation Nuclear Power Department and Maintenance Training Office of Nuclear Power Center Quality Assurance

Division Nuclear Power Stations Nuclear Power Power Nuclear Information Systems and Electronic Communication Communications Department Engineering Center

Materials and Procurement Department

Accounting and Finance Department Accounting and Finance Center Executive Officers Executive Board of Directors

General Affairs Support Center Sales Company Generation and Power General Affairs Department Office of Legal and Division Administration & Planning Shareholders Affairs

Audit and Supervisory and Committee Audit Human Capital Department Tohoku Electric Power Co., Inc. Co., Electric Power Tohoku

Internal Services Division Internal Human Capital Support Center Office of Internal Services Planning (as ofJuly 2020) 1,

Public Relations Division

Business Creation Division

Corporate Strategy Division

Office of Safety and Security Management

Office of Nuclear Power Internal Audit

Office of Internal Audits Morioka Eki Nishiguchi District Heating & Cooling Center

Office of Secretaries Organization chart In April as a result 2020, the of amendment of Electric Tohoku Business Electricity Act, the powertransmission Power’s and distribution business was spun off Electric form to Tohoku Power Network an independent Co., company. The power generating and retail sales businesses will continue be operated to by ElectricTohoku Power. Corporate Information Corporate

Tohoku Electric Power Group