Tokyo Electric Power Company (TEPCO) today signed an emission reductions 
purchase agreement with Xinjiang Tianfu Thermoelectric Co., Ltd.[Note 1], 
a Chinese power and heat supply company, to purchase all of the carbon 
credits (CERs) that will be generated during the period between May 2007 
and the end of 2012 by the hydroelectric power generation CDM[Note 2] 
project to be implemented in Xinjiang Uygur Autonomous Region.

Under this project, Xinjiang Tianfu Thermoelectric Co. will construct a 
run-of-river hydroelectric power plant with a total capacity of 50,000 kW 
(9,000 kW x 2 units, and 16,000 kW x 2 units) in the northern part of 
Xinjiang Uygur Autonomous Region, and supply the electricity generated 
by the hydroelectric power plant to the Shihezi Electric Power Grid, a 
local power grid. [Note 3]

A part of electric power in this network is supplied by Xinjiang 
Uygur Autonomous Region Electric Power Grid[Note 4], a wide-area power 
grid. With this project, part of the electricity now supplied to the 
Shihezi Power Grid will be replaced by hydroelectric power generation, 
and consumption of fossil fuels in both Shihezi and Xinjiang Electric 
Power Grids will be reduced.  Consequently, CO2 emissions are expected 
to be reduced by about 1,370,000 tons during the period through the end 
of 2012. TEPCO plans to purchase in its entirety as CERs.

The details are as shown in the Reference.

TEPCO´s management has addressed measures to control global warming as 
one of its top priority tasks.  TEPCO will continue to launch committed 
efforts to cope with global warming at home and abroad by implementing 
various measures to improve efficiency in supplying and using electricity 
in Japan and acquiring carbon credits through active cooperation in 
overseas projects.

[Note 1] Xinjiang Tianfu Thermoelectric Co., Ltd.
    Company Name    : Xinjiang Tianfu Thermoelectric Co., Ltd.
    Company Location: Shihezi, Xinjiang Uygur Autonomous Region, 
                      People´s Republic of China
    President       : Mr. Cheng Feng
    Established     : 1999
    Capital         : Approx. 253.63 million RMB (Approx. US$32million)
    Business Lines  : Supply of power and heat, etc.


[Note 2] Clean Development Mechanism (CDM)
    A system under which developed nations and economies in transition 
    take part in projects in developing countries to reduce greenhouse 
    gas emissions (or increase carbon sequestration), and acquire carbon
    credits (CERs) for emissions reduction amounts.  Along with Joint 
    Implementation (JI) and Emissions Trading (ET), this is one of the 
    initiatives of the Kyoto Mechanism.
    The Kyoto Mechanism is an economic mechanism which allows for more 
    flexibility in greenhouse gas reductions as set forth in the Kyoto 
    Protocol in 1997.

[Note 3] Shihezi Electric Power Grid
    One of the local power grid in Xinjiang Uygur Autonomous Region. 
    In addition to using power supply from seven connected thermal power 
    plants and other power generating facilities within the power grid, 
    it receives power supply from other power grid in order to make up 
    for power shortage.

[Note 4] Xinjiang Uygur Autonomous Region Electric Power Grid
    A wide-area power grid that consists of about 20 local power grids. 
    Currently, the power grid does not interconnect with other power 
    grid in China. Xinjiang Electric Power Company completely 
    operates from power generation and transmission to supply.


Appendix
An Overview of the Hydroelectric Power Generation CDM Project in China