Kansai Electric Power Group Overview

SpecialFeature

1

Value Creation Story

Medium-term Management Plan

Business Overview

Foundation to Support Value Creation

Financial and Corporate Information

Overview of business improvement plan and apology for inappropriate handling of
the customer information of power producers and suppliers

Message
An apology for the improper handling of the customer information of power producers and suppliers
and measures to prevent any recurrences

We will do everything to reform ourselves into a corporate groupthat is truly committed to compliance.
To our valued stakeholders
Since the incident of receipt of cash and gifts, we have worked on various measures including governance reforms under a new
business management system that incorporates objective and external perspectives. However, a series of incidents have occurred
recently within the Group, including the inappropriate handling of power producer and supplier customer information andviolations of the Anti-Monopoly Act, causing great concern to our customers and society at large, for which we again offer oursincerest apologies.
To ensure that this kind of incident will never happen again, we have formulated a business improvement plan and we aredetermined to carry it through. We will fundamentally strengthen internal controls for the entire Group through establishing aframework and rules for compliance with laws and regulations, boosting training and education, and setting up a new Compliance
Promotion Headquarters that will be responsible for ensuring compliance, risk management, and other functions. In addition, we
have established a new Organizational Climate Reform Committee, which I chair. This committee will create an organizational
climate that encourages everyone in the Group to openly discuss their own thoughts and observations so that we can all put
compliance into practice.
Our business is based on the trust that customers and society have placed in us. We will do everything possible to reform
ourselves into a genuinely compliance-oriented corporate group, so that we can earn back your trust. We ask for your continued
understanding and cooperation going forward.

Nozomu Mori
Director, Representative Executive Officer, President

Kansai Electric Power Group Integrated Report 2023

4

Kansai Electric Power Group Overview

SpecialFeature

1Value Creation Story

Medium-term Management PlanBusiness Overview

Foundation to Support Value Creation

Financial and Corporate Information

Overview of the Business Improvement Plan

Background and causes of violation of the Electricity Business Act, etc., due to improper handling of information on customers ofpower producers and suppliers

In December 2022, it became clear that some of our employees hadbrowsed and used information on customers of power producers
and suppliers other than us (hereinafter, “information on PPScustomers”) managed by Kansai Transmission and Distribution, Inc.
● Our questionnaire surveys and interviews found that for the 13screens and two forms for special-high voltage and high voltage,which were browsable, information on PPS customers was notviewed for the purpose of making proposals to customers. On theother hand, regarding the four low-voltage screens, information on●announced a business improvement plan on May 12, 2023.

PPS customers turned out to have been viewed for the purpose ofmaking proposals to customers.

Background

It was also found that information on PPS customers was included invarious data used for preparing electric power transaction reports
and sending direct mails regarding the abolishment of posting
meter reading slips to the mail boxes of each customer.
Subsequently, measures were taken to prevent access to the data,
and the information leakage problem was resolved.
● In response to the incident, we received a business improvement
order from the Minister of Economy, Trade and Industry pursuant to
the Electricity Business Act on April 17, 2023, and formulated and●Causes
Inadequate development and operation of the information systemand overestimating its reliability● Inability to adapt to the changing business environment (lack ofawareness for achieving fair competition)● Issues with the organizational culture, etc. (as for practice ofcompliance, it was not thoroughly implemented in specificoperations, customers in our immediate vicinity were prioritized, etc.)●Background and causes of violation of the Anti-Monopoly Act in special-high voltage and high voltage electric power transactions
Background●

The Company was acknowledged as follows by the Fair Trade
Commission on March 30, 2023 of being engaged in acts against
Article 3 of the Anti-Monopoly Act, which prohibits unreasonable
restraint of trade (hereinafter, “the Acts”).
▶ T he Company, Chubu Electric Power Co., Inc., and Chubu ElectricPower Miraiz Co., Inc. mutually agreed to limit sales activities toacquire large-scale users located in the other party’s supply areasfrom November 2, 2018 to October 28, 2020, at the latest.
▶

T he Company and Chugoku Electric Power Co., Inc. (hereinafter,“Chugoku Electric Power”) mutually agreed to restrict sales
activities to acquire special-high voltage and high voltage users
located in the other party’s supply areas, as well as government
offices located in the Chugoku Electric Power’s supply areas,

Kansai Electric Power Group Integrated Report 2023

from November 8, 2018 to October 28, 2020, at the latest. TheCompany also restricted itself to bid participation and low-priced
bidding in Chugoku Electric Power’s supply areas.
▶ T he Company and Kyushu Electric Power Co., Inc. (hereinafter,“Kyushu Electric Power”) mutually agreed to restrict low-priced
bidding in the other party’s supply areas from October 12, 2018
to October 28, 2020, at the latest. Kyuden Mirai Energy Co., Inc.
was informed of the aforementioned matter by Kyushu ElectricPower by October 31, 2018 at the latest, and took part in theaforementioned restriction.
● The Company stopped the violative acts prior to the on-site
inspection and filed an application for the Leniency Program with
the Japan Fair Trade Commission, which was approved. Accordingly,
the Company has not received either a surcharge payment order ora cease-and-desist order.

●In response to the incidents, the Company received an business
improvement order from the Minister of Economy, Trade andIndustry pursuant to the Electricity Business Act on July 14, 2023,
and formulated and announced a business improvement plan on
August 10, 2023.

CausesLack of awareness of business rules after policy shift to liberalizationof electricity market● Insubstantial awareness of legal compliance● Lack of knowledge and understanding of Anti-Monopoly Act● Lack and malfunction of checking functions to acts of seniormanagement●5Kansai Electric Power Group Overview

SpecialFeature

1

Value Creation Story

Medium-term Management Plan

Foundation to Support Value Creation

Financial and Corporate Information

Overview of the Business Improvement Plan

Business Improvement Plan for violation of the Electricity Business Act, etc., due toimproper handling of information on PPS customers (submitted on May 12, 2023)

Individual preventive measures
based on the causes of incidents

Business Overview● Measures to be taken promptly (Customer Solution Division)

Overhaul of business operation and information systems

Business Improvement Plan for violation of the Anti-Monopoly Act in transactions ofspecial-high voltage and high voltage electric power (submitted on August 10, 2023)● Measures to be taken promptly (violation of the Anti-Monopoly Act)

Development of internal rules, etc., to encourage compliance with the Anti-Monopoly Act

Development of compliance training and a system for ongoing training
Strengthen dialogues with employees to gather their opinions

Improvement of internal education, training, etc., to promote understanding of theAnti-Monopoly Act and to re-instill compliance awarenessStrengthen the checking system to ensure the appropriateness of operations
Dealing with subcontractors● Physical separation of information systems relating to wheeling information, etc.

Strengthening of the support system to prevent violations of the Anti-Monopoly Act
Strengthening of auditing functions

Common recurrence prevention measures
based on underlying causes● Commitment to fair competition by upper level management(The management will ensure an increase in awareness of the paradigm shift in competition policies and declare a clear-cut commitment to breaking away from violations of code of conduct
stipulated in the Anti-Monopoly Act and the Electricity Business Act.)● Strengthening internal controls

Strengthening carried out through the newly established Compliance Promotion Headquarters (strict observance of laws and regulations, improvement in the effectiveness of internal controls,
training enhancement, improvement and enhancement of whistleblowing systems)
Strengthening of internal audits (expansion of the scope of workplace communication, implementation of site audits, strengthening of monitoring, improvement and reinforcement of thestructure of the Office of Internal Auditing, and improvement of audit quality by making use of outside knowledge)● Reforms of organizational climate(Establishment of the Organizational Climate Reform Committee chaired by the President to build an organizational culture where all executives and employees can candidly talk about theirfeelings and awareness across positions and sections, while also overseeing and promoting a series of reforms.)● Verification of the implementation status and effectiveness of initiatives utilizing external human resources(A series of reforms has been verified by the Board of Directors, Audit Committee, and Compliance Committee; the majority of whose members are from outside the Company.)

Kansai Electric Power Group Integrated Report 20236