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Taipower Suffers Great Losses, but Don't Cry for It

icon2019/07/29
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 Taipower Suffers Great Losses, but Don't Cry for It

 

Source: UDN

July 25, 2019

According to a release by the Economics Ministry, among the four state-run enterprises, for the first half of the year, three corporations made profits, and only Taipower suffered a loss of NT$29.7 billion. Taipower says, besides the hikes in international fuel prices, the increase in LNG in the proportion of power generation has led to an increase in overall power generation costs. This explanation debunked a beautiful lie: the Tsai government claimed that the “nuclear-free homeland” would not bring along increases in electricity prices; this balloon would soon be popped. This also foretells a cruel fact: the artificially suppressed electricity prices at the present would very soon spiral out of control, and the people had no escape.

Logically speaking, when international fuel prices increase, the first to be directly impacted should be CPC Taiwan, with Taipower being the second. However, for sales of oil products in the first half of the year CPC made a profit of NT$28.3 billion, while Taipower, using oil and LNG, nevertheless, incurred losses totaling NT$29.7 billion. Developments of such stark contrasts bespeak that Taipower’s losses came principally from "political interference" and "improper policies."

The reason is very simple: CPC has long established an open pricing formula for calculating adjustment of the prices of its oil products, and reviews it regularly every week; this allows CPC to cope with market changes, and the public has become accustomed to the fluctuations of oil prices. In contrast, although Taipower also has a formula for calculating electricity rate adjustments, the "Electricity Rate Review Committee," under the Economics Ministry, undertakes reviews every six months, and frequently decides not to adjust rates on the basis of "stabilizing commodity prices" and other reasons, creating a disconnect between costs and rates. Coupled with the forthcoming general elections next January, the Cabinet, in order to avoid that a rate increase would impact electoral prospects, deliberately manipulates the freezing of adjustments.

Taipower’s huge losses in the first half of the year are only the beginning; following the acceleration of a nuclear-free homeland, coal-reduction, wind power generation and solar power expansion, power generation costs would inevitably soar. At that time, Tsai Ing-wen's pledge that energy source transformation would not impact the price of electricity would be debunked; by then, no matter how much more "Electricity Rates Stabilization Reserve Fund” would not be enough. The public don't have to cry for Taipower’s losses, because in the end no matter where you find the money to fill the black hole, all losses will eventually be shifted to the ordinary people.

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