Basic Policy of Procurement

We carry out our procurement activities in accordance with consistent guidelines.

Our mission is to provide a reliable supply of good-quality and inexpensive electric power to our customers. To this end, we must aim for greater cost reductions each year in procuring materials. We are thus procuring materials with favorable quality and price from a broad spectrum of business partners in Japan and overseas.

In procuring these goods, we have sought to reduce procurement costs while ensuring reliable supply and quality, but we also regard as imperative our fulfillment of the social responsibilities demanded of companies in terms other than quality and price.

To discharge these social responsibilities, we have decided to review our basic guidelines for procurement to produce new "Basic Procurement Guidelines" that incorporate additional factors such as safety, human rights, the environment, and proper information management, and that will be implemented in collaboration with our business partners.

We have established the following eight guidelines for our material procurement activities.

1.Openness

In addition to maintaining relationships with suppliers with proven track records, the Company is always working to procure from new suppliers. The Company keeps an open door to companies within and beyond Japan and provides business opportunities open to all.

2.Fairness

The Company will select suppliers for procurement by considering overall quality, pricing, delivery time, supply stability, after-sales service, technical compatibility with existing equipment, transaction records, corporate stance, and other aspects, as determined based on a fair and impartial evaluation.

3.Compliance with laws, regulations, and social norms

The Company will do business in compliance with all applicable laws and regulations and respect for the spirit behind them in the regions in which we do business, both in Japan and worldwide. We will act resolutely to exclude antisocial forces that threaten social order and safety, and ask that our business partners do the same.

4.Respect for human rights, occupational health and safety

The Company respects human rights based on the Tohoku Electric Power Group Human Rights Policy. We will strive to avoid indirectly fostering or participating in human rights violations, through means including encouraging appropriate measures to respect human rights, and avoid violating them if a business partner has a negative effect on human rights. In addition, we will strive to prevent occupational injuries and secure safe working environments by complying with applicable occupational health and safety laws and regulations under the Tohoku Electric Power Group Safety and Security Policy.

5.Consideration for the environment

In line with the Tohoku Electric Power Group Environmental Policy and Green Procurement Guidelines, the Company will contribute to carbon neutrality by prioritizing the procurement of eco-friendly products and materials, and contribute to a circular society by controlling waste generation and putting resources to effective use.

6.Appropriate procurement procedures

The Company has established the Procurement Procedure that call for ordering based on agreement on prices and other conditions, through competitive bidding by multiple business partners. We will also respect the principles of the Act against Delay in Payment of Subcontract Proceeds, etc. to Subcontractors and conduct appropriate procurement procedures based on negotiations with business partners. In addition, we will respond appropriately through negotiations and other means in the event of a need for review of contractual prices and other conditions due to sudden volatility in economic conditions.

7.Appropriate information management

The Company will properly manage and protect trade secrets, personal information, and other information learned in the process of procurement, based on the Tohoku Electric Power Group Information Security Fundamental Policies.

8.Development of risk management structurers

The Company will identify risks related to procurement, review risk assessment periodically, and develop risk responses. We will also strive to ensure stable procurement by developing structures ready for emergencies such as natural disasters.

9.Mutual Trust

The Company will seek to build favorable relationships of mutual trust with suppliers through fair procurement procedures.

10.Contributing to local communities

Through its procurement activities, the Company will contribute to local communities together with business partners.