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September 25, 2017

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Taiwan Thinktank pans Taipower's 'reforms'

The China Post--Taiwan Thinktank (台灣智庫) yesterday panned the ongoing reforms of the Taiwan Power Company (Taipower, 台灣電力公司) as unrealistic and missing the point. The think tank's chairman, Democratic Progressive Party (DPP) Legislator Lin Chia-lung (林佳龍), along with other legislators in the Economics Committee, threatened to send back Taipower's budget plan for 2012 and 2013.

DPP Legislator Gao Jyh-peng (高志鵬) added that the second increase of the power rates scheduled in December should be canceled.

Lin stated that the electricity supply provided by Taipower's equipment is enough to satisfy the demand in Taiwan, but the company still purchases electricity from private power plants. Along with the increase in electricity prices, Taipower claims the average increase in productivity of the company's employees is around 134 percent per year over the past 10 years. This has resulted in the company giving out average bonuses of NT$30,000 to each employee every year.

Lin stated that Taipower not only lacks the resolve to truly reform, but also aims to expand its power in the name of progress.

According to Lin, the floating power rates proposed by Taipower will give the company the authority to adjust electricity prices according to its own will.

Moreover, Lin accused the company of initiating a draft to obtain the authority to decide its own procurement, personnel changes, budget, investment targets and reinvestment policies.

Former Taipower Chairman Wang To-far (王塗發) echoed the opinion of Lin and criticized that Taipower's report of its reform is inconsequential. He said the real reason for the losses of the company is its overspending on investment and ensuing malpractices of construction and procurement.

Wang went on to say that Taipower started suffering losses in 2006. The total losses reached NT$117.9 billion at the end of 2011. He criticized the company for not reviewing its losses and only increasing the power rates.

National Taiwan University Professor Hsu Kuang-jung (徐光蓉) stated that in terms of thermal power generation, Taipower is less efficient than private power companies. In 2011, Taipower's coal-fired power plants used 11.3 percent more fuel to generate power than those used by private companies, while Taipower's gas-fired power plants used 9.77 percent more fuel than private plants. Hsu estimated that if Taipower's power plants are as efficient as private power plants, the company can save NT$24.3 billion annually.

Bonuses Have Been Reduced: Taipower

According to Taipower, the company has adopted the suggestions of the Ministry of Economic Affairs' reform committee and excluded revenues resulting from rising electricity prices as a reason to give its employees bonuses.

The company further clarified that it has reduced its bonuses from 0.11 percent of its revenue except income resulting from rising electricity prices to 0.1 percent.

The company stated that in 2013 its employees are expected to receive a bonus of NT$25,000, instead of NT$30,000, on average.

As for purchasing power from private power companies, Taipower said that it has to satisfy the power reserve. Besides this, purchasing power from private companies can reduce the use of power stations that are more costly, Taipower said.

As for the floating electricity prices, the company claims that milder and more frequent price adjustments can reduce the impact of power hikes on the economy.

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