Tohoku EPCo Environmental Action Report 2006

We are making efforts to continuously improve the environmental activities by establishing and introducing the environmental management system based on our Company’s standard conforming to ISO standard in the whole company since March 2000. Furthermore, all our thermal power stations and the Onagawa Nuclear Power Station are aiming at the reduction in the environmental impacts by acquiring the certification under the international environmental management standard ISO 14001. In addition, the environmental auditing is conducted by the internal auditors and the periodical inspection (annually) and the renewal inspection (every three years) are undertaken by the external inspection bodies.

Environmental Management in Thermal and Nuclear Power Stations Each thermal and nuclear power station has established the environmental management regime for which each deputy superintendent acts as the “environmental management (EM) manager” under the top management of respective superintendent. Furthermore, each station is making efforts to carry out the environmental management under ISO 14001 and reduce the environmental impacts by working out the environmental policy as well as establishing the “Environmental Management Committee” consisting of the EM manager and section manager, where the environmental management plans are worked out, and the status and actual performance of these plans are verified and evaluated.

◎Shin-Sendai Thermal Power Station Output: 950,000 kW in total (Units 1 and 2) Main fuel: fuel oil, crude oil and natural gas ISO 14001 Certification  Registered: February 20, 2001  Renewed: February 20, 2004 Continuous registration of 2004 version approved: March 24, 2006

◎Sendai Thermal Power Station Output: 350,000 kW in total Unit 1: long-term plan suspended (since October 1, 2003) Unit 2: long-term plan suspended (since March 31, 2005) Unit 3: decommissioned (on March 31, 2004) Removal work (on February 1, 2005) We plan to construct a 446,000-kW high-efficiency combined cycle power plant (Unit 4 of Sendai Thermal Power Station), which uses environment-friendly natural gas as its fuel, at the site where Unit 3 is slated to be removed, to reinforce the competitiveness of our thermal power sources and reduce emissions of CO2, etc. The commercial operation of the plant is scheduled for July 2010. Main fuel: coal and fuel oil ISO 14001 Certification  Registered: December 20, 2000  Renewed: February 20, 2004 Continuous registration of 2004 version approved: March 24, 2006

●The Acquisition Status of  ISO 14001 Certification

Status of Operation and Main Activities (in FY2005) ■Holding of meetings of the Environmental Management Committee (in April, July, October, November, December, February and March) ■Implementation of Environmental Auditing, etc. (internal environmental auditing conducted in November, and periodical inspection in accordance with FY2004 version conducted in February). ■Prevention of Global Warming  The shortening of startup time of Unit 1 DSS (Daily Startup and Shutdown) of Shin-Sendai Thermal Power Station saved about 123,000 kWh (about 54 tons of reduction in CO2 equivalent). ■Resource Conservation and Recycling  About 169 tons of fuel oil ash produced by combustion of fuel oil at Unit 1 of Shin-Sendai Thermal Power Station was effectively used as raw materials of cement, etc.  About 109 tons of shells and mud discharged from cooling channels of the power station at the time of periodical inspection were effectively used. ■Environmental Communications  In Environmental Awareness Month (June), cleaning activities were conducted around the power stations together with local residents.

Tohoku EPCo Environmental Action Report 2006

Environmental Management by Branch Offices, Customer Services Offices, Engineering Centers, and Other Offices Our offices and establishments including branch offices, customer services offices, and engineering centers have established their respective environmental management regime for which their respective general manager acts as “chief of overall EM affairs” and their respective deputy general manager acts as “environmental management manager.” Furthermore, they are making efforts toward the continuous improvement of the environmental activities under the guideline of Plan-Do-Check-Action while planning, evaluating and reviewing the actual performance in each environmental committee and at other opportunities about “Energy and Resources Conservation Management Items in Office” for all business offices and “Specific Management Items” of each business office.

◎Morioka Customer Services Office ■Efforts Toward Environmental Activities ●The “Environmental Committee of Morioka Customer Services Office” (chaired by the general manager of Morioka Customer Services Office) develops the basic policy and action plans on its own, and office-wide efforts are made under the guidance of eco leaders assigned by the committee. ●As a handbook for environmental actions to be taken by the employees, the office prepared “Morioka Customer Services Office’s Environmental Action Guide” that puts together the rules in the office concerning energy conservation and recycling activities (reduction in the usage of electricity, fuel, water and copy paper, recycled use of office supplies, separation of wastes, etc.) to level out efforts. ■Status of Major Activities ●Based on the “Guidelines for Implementation of Plan to Reduce 50% of Wastes of Morioka Customer Services Office by Half,” the office satisfactorily reduced its wastes by about 50% from the FY2004 level by means of sorting of non-industrial wastes and thorough recycling of paper, including confidential papers. ●The office periodically issues a mail magazine named “Kankyo no WA!” (network of environmental activities) for the staff members of the office, and makes efforts to convey various internal and external information about environment and to promote environmental communications among the staff members of the office. ●In response to the 20th anniversary of the sister-city relationship between Morioka city and Victoria city of Canada, the office supported “Hanging Baskets” recommended by the municipal government, and hung six flower pots in front of the building of the office. From spring through fall, the staff members of the office took care of them such as watering, and addressed environmental beautification activities. ●The office also participated in “Morioka Welfare Bank” secondhand fan, stove and ski recycling activities in FY2005, which Morioka Customer Services Office has supported over the past 30 years, and gave support and cooperated in civil activities.

Energy and Resources Conservation Management Items in Office

By “making a practice of copying on both sides,” “ thoroughly using the reverse side of miscopy,” “turning off lighting and OA equipment as often as possible” and other means, each business office is required to reduce the consumption of copy papers, electricity, water, and fuel and the amount of emissions from general waste.

Specific Management Items

Continuous improvement of various environmental activities including, among others, “reduction in power loss,” “reduction in SF6 emissions,” “reuse and expansion of recycling of materials and equipment,” “expansion of green procurement,” “proper management of wastes,” “active development of environmental communications,” and “enhancement of environmental education” is sought in a specific manner at each office.

◎General Education & Training Center ■Efforts Toward Environmental Activities ●Under the environmental action plan developed by the General Education & Training Center (in March 2005) on its own, all of the staff members of the center played the roles assigned to respective groups. At the same time, the status of activities was made known and appealed to visitors and trainees, too. ●Holding of the Environmental Committee in April, November and February (chaired by the general manager of the General Education & Training Center). ■Status of Major Activities ●The center tries to promote proposals for and PR of power-saving measures such as thinning of fluorescent tubes and production and posting of sticker that says “Diligently Switch On and Off.” (Lights in corridors and stairs are switched off during daytime, lights in offices are switched off during lunchtime, lights in training rooms and bed rooms are switched off when they are not used, cooling and heating is set at appropriate temperatures, powersaving functions of PCs are used, office equipment, including print servers, is switched off at closing time, use of elevators is refrained by the 2 UP and 3 DOWN campaign, and hot water supplied to bathroom, main hall and training building is set at appropriate temperatures.) The status of monthly electricity usage is widely known by posting it in the office on the first floor and on the bulletin board on the third floor. ●Light clothes are encouraged in summer as an eco style campaign ahead of cool biz from 2002. ●The center conducted the “Country Operation” to collect empty cans and wastes on commuting routes (in September and November). ●While promoting PR activities for recovery of recyclable products such as used paper, the center made graphs showing the amount of wastes collected and expenses paid. ●The center received unnecessary files from other establishments and reused them as files of research materials. Reusable files, etc. were collected at the time of personnel changes and at the change of the fiscal year. ●Corrugated cardboard boxes of personal belongings of trainees and students were collected and reused.

Tohoku EPCo Environmental Action Report 2006

The Office of Internal Auditors sets themes and conducts internal environmental auditing every year, reports the results of auditing to the management, finds problems, proposes improvements, and promotes horizontal expansion of activities of this type.

In FY2005, Tohoku EPCo carried out internal environmental auditing at 30 offices and establishments*.

●Results of Internal Environmental Auditing Theme “Practice of environment-conscious management” ■Environmental management to realize environmental management Major Viewpoints ■Status of operation of environmental management system and status of disposal and management of industrial wastes  To verify the activities to realize the environment-conscious management declared in the Mid-Term Environment Action Plan such as the status of progress and effectiveness of the environmental management system that is integral with business operations, and the efforts to appropriately dispose of and manage industrial wastes.

Observation ■Energy and resources conservation activities such as reduction in the usage of electricity and quantity of paper purchased have taken root, and efforts to contribute to society such as cleaning activities together with local communities are carried out at many places. ■Familiar information about the environment is continuously disseminated to raise the awareness about the environment. ■There were some cases where improvements were necessary for outsourced waste disposal operations and the practical applications of manifests. Responsive Measures ■To encourage bottom-up activities, eco leaders have to play a large part. Therefore, sharing of examples of activities and educational and enlightenment activities have to be promoted. ■Appropriate disposal and management of industrial wastes has to be thoroughly ensured.

One Eco-Action As part of the events in Environmental Awareness Month (June) to enhance the awareness of employees about the environment, Tohoku EPCo promotes the environmental management buildup campaign (One Eco-Action) under which every employee sets his or her specific action targets.

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With this campaign, the awareness about and actions of energy and resources conservation activities have taken root in routine operations such as reduction in electricity consumption and the quantity of paper purchased, expansion of effective use of wastes, etc. In FY2005, the campaign was extended to the Company Group, and integrated environmental activities are conducted.

Invitation of “Unified Theme” for Environmental Awareness Month of Tohoku EPCo’s Company Group

In consideration of the spirit of the Environmental Awareness Month advocated by the Ministry of the Environment, Tohoku EPCo decided to set the Environmental Awareness Month of Tohoku EPCo’s Company Group, aiming at enhancing the awareness about the environment and fostering environmental communications in cooperation with the Company Group. Tohoku EPCo invited the unified theme for the Environmental Awareness Month, and received about 400 candidate themes, including those sent

from Group Companies. As a result of the screening, the theme of “Everyone is a Regular Player and Reduction of CO2 by Global Team in Unison,” which was proposed by Mr. Mitsugu Shibata of Noshiro Branch Office of Tohoku Electric Power Engineering & Construction Co., Ltd., was chosen for the grand prize. Under this unified theme, various environmental activities were carried out during the Environmental Awareness Month of 2006.

Tohoku EPCo Environmental Action Report 2006

In order for each one of the employees to recognize the environmental impact and practice environmental actions, Tohoku EPCo periodically provides the environmental education. The employees who participated in the environmental education are also required to make the details of the education widely known in their places of work to enhance the awareness of other employees. Environment-related basic education, professional education and training are provided in a well-planned manner at thermal and nuclear power stations to enhance the awareness of employees, and maintain and improve professional knowledge and technical skills.

Eco-Leader Education To smoothly proceed with environmental management activities, To-

To help employees enhance their willingness of self-development and improve their ability, Tohoku EPCo support their acquisition of official qualifications.

hoku EPCo provides the “Eco-Leader Education” to develop the eco-leaders who take the initiative in promoting environmental activities in places of work. The education is provided to newly assigned eco-leaders to enhance their understanding about the necessity of environmental management, relations between routine operations and environmental issues, etc. In FY2005, the number of employees participated in the education came up to 113. In addition, such environmental education is provided as part of “professional education” and “departmental education.”

●Number of Employees Who Have Environment-Related Qualification  (On the register as of the end of each fiscal year)

●Number of Employees Who Have  Environment-Related Qualification  (On the register as of the end of each fiscal year) 8,082

Aiming at beefing up two-way environmental communications with the employees of the Tohoku EPCo’s Company Group and their families as well as improving their awareness about the environment, Tohoku EPCo actively dispatches environmental information, making the most of internal and external information infrastructures.

Opening of “Eco@Home” as Environmental Info Portal Site for Dedicated to the Company Group As an information disseminating tool to encourage employees of the Company Group to have interests in environmental issues at their homes and practice actions to reduce adverse effects on the environment close to them, Tohoku EPCo operates “Eco@Home” as an

environmental portal site dedicated to the Company Group. The portal site features environmental news and environment learning site, and an environmental housekeeping accounts book called “Eco Calc” is put on the site, which is aimed at changing to environment-friendly lifestyles by recording the energy consumption at home such as electricity, gas and fuels as well as the amount of wastes, and encouraging all members of the family to cooperate in the reduction of wastes.

Tohoku EPCo Environmental Action Report 2006

Tohoku EPCo’s Group consists of a variety of lines of business such as construction, manufacturing, information processing, electricity industry, etc. For environmental efforts, Tohoku EPCo formed an “affiliated company environment liaison committee” in FY2001, and discussed the measures for cooperation of the Company Group and information exchange. To further promote the environmentalconscious management, an “Tohoku EPCo’s Group Environmental Committee” was formed as a senior organ in FY2004 to establish the Company Group’s environmental management system and environmental activities have been continuously improved.

Tour to Facilities Related to Environment The affiliated company environment liaison committee held tours to facilities related to the environment. In November 2005, the committee observed the advanced efforts at the Sendai Plant of Kirin Brewery Co., Ltd. It also visited Tohoku Ryokka Kankyohozen Co., Ltd. to see the measurement and analysis of asbestos, etc.

Company Group’s Environmental Action Plan The Company Group Environmental Committee develops environmental policies and environmental action plans. The “Company Group’s Environmental Policy” is defined as a policy having the precedence over the environment policies of respective companies, and the “Company Group’s Environmental Action Plan” was formulated as a three-year plan to materialize the Company Group’s environmental policy. The companies of the Company Group will reflect the environmental indicators and measures mentioned in this Environmental Action Plan in their respective action plans to the greatest extent possible, and try to reduce their environmental impact by evaluating and reviewing their plans every year.

◎Results of Efforts in FY2005 As for CO2 emissions, the companies of the Company Group expanded the scope of grasping of data since a year ago, and consequently the scope of surveys also expanded and the amount of fuel consumption was increased. As a result, CO2 emissions per employee in the office sector increased by 0.3 tons from the previous fiscal year to 3.2 tons. On the other hand, CO2 emissions per unit in the production process sector decreased by 37 tons from the previLatest Trends in FY2006

Holding of Company Group Environmental Committee The Company Group Environmental Committee held a meeting in June 2006. Based on the Company Group’s environment action plan and in consideration of the results of efforts made in the previous fiscal year, the committee worked out a plan for FY2006.

ous fiscal year to 285 tons for 10 million yen in sales. As for industrial wastes, their effective use was promoted by all of the companies of the Company Group, and the target value of FY2006 could be achieved earlier than planned. As for the creation of Environmental Management System (EMS), Tohoku EPCo considered development of an EMS guideline to help the companies of the Company Group further promote their efforts to conform EMS.

◎Development of Environmental Action Plan for FY2006 As for the Environmental Action Plan for FY2005, Tohoku EPCo has decided to effectively promote more specific efforts through the cooperation among the Group Companies, while succeeding to the five priority policies, as it is required to take on-target measures in anticipation of diversifying environmental issues such as growing interest in CSR (corporate social responsibility), the reinforcement of regulations on the reduction in CO2 emissions and waste management, etc. Major points of review of the plan are as follows: ●Review based on the actual results of efforts made in FY2005   [Energy and resources conservation efforts in offices]   [Energy and resources conservation efforts in production processes] ●Higher levels of targets to be achieved in FY2006  [Reduction in wastes]  [Promotion of Green Procurement]

Acquisition of ISO 14001 Certification Of the companies of the Company Group, ten companies have acquired the ISO 14001 certification, and are promoting efforts to reduce their environmental impact.

◎Acquisition of ISO 14001 Certification (Company Group) March

1998 Measurement and Analysis Department ofTohoku Ryokka Kankyohozen Co. Ltd.

November 1998 Tohoku Electric Manufacturing Co., Ltd. October

1999 Nihonkai LNG Co., Ltd.

March

2000 Head Office, Factories, and Miyagi Branch Office ofTsuken Electric Ind Co., Ltd.

September2000 Technology Development Research Center ofTohoku Electric Power Engineering & Construction Co., Inc. January

2001 Sakata Kyodo Power Co., Ltd.

December 2001 Head Office of Yurtec Corporation August

2002 Kitanihon Electric Cable Co., Ltd.

October

2004 Tohoku Information Systems Co., Inc.

December 2004 Tohoku Instruments Co., Ltd.

Environmental Activities in Close Cooperation with Local Communities As part of the environmental communications as a priority policy of the Company Group’s Environmental Action Plan, Tohoku EPCo is promoting environmental activities in close cooperation with local communities. For such activities, the companies of the Company Group are trying to develop trust-based relationships with local communities through the promotion of daily regional collaborative activities.

◎Cooperation with NPOs in Concerted Cleaning of the Hirose River Tohoku Ryokka Kankyohozen Co., Ltd. participated and cooperated in the “Concerted River Cleaning of 10,000 People Committee for Hirose River” hosted by Water Environment Net Tohoku. Many employees participated in the cleaning activities at the site together with local residents.

Tohoku EPCo Environmental Action Report 2006

Major Measures and Environmental Indicators The environmental indicators were collected from the companies that constitute the Tohoku EPCo Company Group Environmental Committee and evaluated.

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Tohoku EPCo Environmental Action Report 2006

Biomass Power Generation Business Biomass energy (bioresource) was defined as new energy in January 2002, and is expected to come into wide use in the future with the aid of the central government as an effective means of coping with both the prevention of global warming and recycling of resources. Tohoku Electric Power Engineering & Construction Co., Ltd. has made investment in “Biomass Power Shizukuishi Co., Ltd.,” an SPC (special-purpose company) established in April 2004 for the “North Tohoku Biomass Project.” This project is designed to generate electricity by using the methane produced by applying the methane fermentation treatment to “food residues” of public institutions such as elementary and junior high schools as well as of food processing plants together with “excrement of livestock” produced from Koiwai Farm where construction of a biomass power plant is now under way.

Power Station is Japan’s first commercial geothermal power station that came into operation in 1966. Its unique shaped cooling tower is the symbol of the station.

Recycling Business of Plant Working Fluid Tohoku Ryokka Kankyohozen Co., Ltd. started the “Mobile Reconditioning Service (MRS)” that uses a dedicated truck and visits plants to treat and recycle on-site working fluids from various machines such as oil solutions, quenchants, detergents, etc., which are used in volume by the manufacturing industry. The company offers the service to help customers contribute to environmental protection and reduce costs, including reduction in CO2 through reduction in wastes produced at plants, etc.

Development and Sale of “FA-MICS” Water Treatment Agent Made of Coal Ash as Principal Materials Wind Power Generation Business Tohoku Natural Energy Development Co., Ltd. constructed Noshiro Wind Power Station capable of generating 14,400 kW with 24 600kW wind turbines in the Asanai area of Noshiro city, Akita prefecture. The wind power station started commercial operation in November 2001. This wind power station has participated in the “Green Power Certification System” now operated by Japan Natural Energy Co., Ltd.

Hydroelectric Power Generation Business

Tousei Kougyo Co., Inc. has been entirely engaged in the development, operation and maintenance of small- and medium-scale hydroelectric power stations. In March 2005, the company took over four hydroelectric power stations from the Fukushima prefectural government. Including these four stations, the company now has a total of 14 hydroelectric power stations, and is expanding its business scale as a company specializing in hydroelectric power generation.

Geothermal Power Generation Business Tohoku Hydropower & Geothermal Energy Co., Inc. supplies geothermal steam for power generation and electricity generated by geothermal and hydroelectric power, capitalizing on abundant natural energy in the Tohoku region. Matsukawa Geothermal

Tohoku Electric Power Engineering & Construction Co., Inc. has developed and now sells the “FA-MICS” water treatment agent by effectively utilizing coal ash. The FA-MICS is made of inorganic materials, and it has the characteristic of adsorbing polluted constituents with the physical and chemical properties of porous particles. Moreover, the company sells and leases the FA-MICS-based water purification system (capable of purifying up to 20 cubic meters per hour) that can be applied to a wide range of fields such as rivers, lakes and marshes, waste water from mines, non-industrial waste water, etc.

Tohoku EPCo Environmental Action Report 2006

Construction of Facilities for New Energy and Distributed Power Sources Power generation by new energies such as photovoltaic power and wind power as well as distributed power sources such as cogeneration cannot yield adequate effects, unless they fully exploit a variety of technologies and their specifications are optimized for respective sites. Yurtec Corp. proposes optimum systems by integrating its technologies in the fields of indoor wiring, environment, power distribution and transmission, power generation and transformation, information communications, civil engineering, construction, etc., and making full use of its whole engineering functions.

Latest Trends in FY2006

Effective Use of Coal Ash Sakata Kyodo Power Co., Ltd. is now engaged in an attempt in cooperation with the Yamagata prefectural government to blend fly ash produced at coal-fired power plants into dredged soil and use it as low strength concrete. In 2006, the company completed a road for river bank management and walk for test purposes.

Plant Engineering Preparatory research and analysis

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Maintenance

Production and Sale of Wood Pellets Made from Rubbish in Rivers Agri-Power Co., Ltd., which was established in January 2002 as an internal venture company, processes rubbish collected from rivers into compost, sawdust, wood pellets, etc. The compost and sawdust are sold to local farmers, and wood pellets are sold as fuels for use in stoves, etc. The company contributes to the invigoration of local industries and creation of environment-friendly recycling society through the promotion of wide use of wood pellets as renewable forest resources.

Development and Sale of Eco-Charcoal Recycled from Wooden Cable Drums

The Eco Center of Kitanihon Electric Cable Co., Ltd. sells “Eco-Charcoal” recycled from wooden cable drums (cores of coiled electric wires and cables) that used to be eventually disposed of after several times of reuse. As pine and cedar trees as the materials of wooden cable drums have many stomata as the characteristic of conifers, “Eco-Charcoal” can be a very good-quality “humidity control coal under the floor,” which can control humidity and absorb smells. “Eco-Charcoal” can also improve air permeability, water permeability and water retention of soil as a soil conditioner and create the environment where crops grow well.