Greetings

Our feelings for the environment and local communities, which form our Company's management philosophy, have remained unchanged since our Company's foundation.

Whenever we talk about our Company's efforts toward environmental issues, we need to look back to the time immediately following our Company's foundation nearly a half century ago.

In 1958, we started the operation of Hachinohe Thermal Power Station, which was our Company's first thermal power station. At the time when the term "pollution" was not a household name yet, we decided to minimize soot emissions from the power station by installing the then most advanced electrostatic precipitators in the facilities.

While this management decision apparently was very progressive in light of environmental preservation measures of those days, it is clear that it was nothing but a natural choice for us if our environmental policy is viewed in the context of "No growth on the part of our Company without prosperity of Tohoku region," the idea we have held since our Company was founded.

Our idea is also evident in the fact that we set up an "Environmental Pollution Control Office," the forerunner of the Environmental Affairs Department, in 1971, the first of the kind in the nation. The idea has been passed on in our management philosophy: "Prospering together with the local community."

The Tohoku region remains and will remain the indispensable foundation of our business operations, and our management policy of contributing to the development of the local community will stay unchanged.

Environmental management is the foundations for attaining mutual prosperity with the local community.

We have long held a basic understanding that "environmental issues are a warning to mankind from the Earth."

In other words, human existence itself has been inflicting a tremendous load on the Earth's environment, and everything around us, in the last analysis, could be traced back to environmental issues.

The fact that human activities have become superfluous, exceeding the capacity of the natural environment as a result, has made environmental issues actualized.

The same logic can be applied to energy issues. Therefore, we are striving to establish a system of environmental management that makes environmental preservation and economical efficiency compatible with each other while actively implementing environment-conscious measures throughout our business operations.

Our fundamental efforts toward environmental issues is condensed into our "environmental policy": "The Tohoku EPCo Group shall collaborate with local communities for the creation of a social and economic system well harmonized with the environment."

Through our environmental policy, we have declared both to inside and outside of our Company that the Company Group as a whole is determined to achieve a high-efficiency energy supply system in concert with local communities while securing stable power supply.

We place top priority on maintaining a state of coexistence and coprosperity with local communities, and our stance toward environmental issues forms the foundations of our relation to local communities.

We are committed to exerting all possible efforts in addressing environmental issues, responding to changes in the business environment at the same time.

The business environment of the electricity industry has increasingly become intense as the number of newcomers entering the electricity industry is on the rise due to the progress in the liberalization of the electricity market and the industry's competition with other energies intensifies in terms of price and service.

Moreover, customers' awareness of environmental issues has recently grown further, and, as a result, more and more customers attach importance to CO2 emissions and a power-supplier's efforts toward environmental issues when selecting the type of energy.

We will make efforts to promote our services by assisting customers in choosing an environment-conscious, effective use of electricity through such means as providing rate options most suitable to a customer's needs and offering consultations on energy saving.

We will continue to exert all possible efforts in addressing various environmental issues, including global warming, wastes, and preservation of the regional environment, as well as actively implementing environmental communications activities in harmony with local communities.

We will intensify our efforts in CSR with a view to winning further confidence of local communities.

We have actively implemented community relations activities and addressed global environmental issues as well as observed corporate ethics, and relevant laws and regulations. Starting this year, we have decided to intensify our efforts in "corporate social responsibility (CSR)."

CSR concerns every aspect of business operations. Under the leadership of the "Council to Promote CSR," which I serve as chairman, we will obligate all employees to thoroughly observe "corporate ethics, and relevant laws and regulations," and "translate into action their environmental awareness." At the same time, we will make further efforts in "close cooperation with local communities and support for their revitalizing efforts." We will achieve all of these goals by incorporating into our decisions for all business operations diverse opinions of all those concerned, including customers, shareholders, and employees.

In preparing this Environmental Action Report, we reviewed environmental measures and targets specified in the Mid-Term Environmental Action Plan from various angles.

Overall, we have concluded that we made substantial achievements in many aspects while there were some aspects in which we were a step short of achieving the target.

We now fully realize that what we have strived to achieve by overcoming diverse obstacles every year since global environmental issues were actualized has steadfastly come to fruition. We will continue to make improvements without interruption by firmly reflecting opinions of local communities in our business activities.

We are determined to advance in addressing environmental issues in a steadfast, step-by-step manner.

Following the effectuation of the Kyoto Protocol in February this year, we have launched the "Team Minus 6%" project, a national campaign to control global warming.

As we endorse the purport of this national campaign, we have taken part in this campaign.

We have made it a rule to address all environmental issues, including global warming, as a "team" by consolidating all resources of the entire Tohoku EPCo Group as a single body.

For this Environmental Action Report, we designed a mascot-snail under the name of "eco tsumuri" - to symbolize our stance toward environmental issues. Drawn as a humorous, approachable image, the mascot is intended to represent our attitude of "thinking thoroughly, steadfastly and positively."

"Good travels at a snail's pace."

This is a remark made by Mahatma Gandhi. Gandhi is said to have said it during the famous "Salt March to the Sea," which has been handed down from generation to generation as a symbol of India's Independence Movement.

We prepared this report with a determination to translate "good" into action for the betterment of the environment in a steadfast, step-by-step manner.

We hope that the reader can gain an understanding of our environmental activities through this report and would sincerely appreciate any candid opinions.

Hiroaki Takahashi
President
Tohoku Electric Power Co., Inc.


August 2005