Economy

MOEA looks to revamp private power contracts

• Publication Date：05/31/2012
• Source： Taiwan Today
• By  Kwangyin Liu

The Ministry of Economic Affairs is seeking to renegotiate contracts between state-owned Taiwan Power Co. and private power plants, in a move to cut costs, MOEA Minister Shih Yen-shiang said May 30.

Shih made the remarks at a Taipei City news conference about planned increases in electricity rates in June and December, in response to questions concerning the unreasonably high prices Taipower has been paying to buy electricity from independent power plants.

“The ministry will talk with the power plants in hopes of amending the contracts, so as to curb Taipower’s losses and provide further justification for the electricity pricing scheme,” he said.

If negotiations are not effective, the MOEA might have to resort to legal arbitration or lawsuits, he noted.

Based on 25-year contracts signed in 1995, Taipower has been spending NT$140 billion (US$4.68 billion) a year purchasing power from nine private power plants. The firm buys electricity from private operators at NT$2.81 to NT$3.28 per kilowatt, but sells it to end users at an average price of NT$2.82, sources said.

As of May, Taipower had accumulated losses of NT$176.6 billion, almost half of the company’s paid-in capital, according to the MOEA.

The MOEA has initiated talks with several independent power plants, and expects to obtain results by the end of June, sources said. (THN)

Write to Kwangyin Liu at kyliu01@mofa.gov.tw