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Taipower rebuts accusations of reckless spending

2012/04/24 22:29:08

Taipei, April 24 (CNA) Taiwan's state-run Taiwan Power Co. (Taipower) said Tuesday that its planned additional spending of NT$230 billion (US$7.79 billion) this year is designed to accommodate future power demands, rebutting accusations of reckless spending by opposition lawmakers.

Taipower has not shown discretion in planning its spending, evident in its move to raise electricity prices while pumping an additional NT$180 billion into investment, plus extra funding for construction of the No. 4 Nuclear Power Plant, which will bring the total investment to NT$230 billion, Democratic Progressive Party (DPP) caucus whip Pan Men-an said at a press conference in Taipei.

The state-run utility firm's spending is flawed, DPP Legislator Lin Chia-lung said. The company's purchase process for coal used for power generation is not transparent and it has been purchasing electricity at inflated rates from other private power plants in which it has stakes, he said.

This defective system is aggravated by the fact that the calculation formula for additional spending has not been made public, while the company's personnel spending is unjustifiably high. He added that the DPP caucus might attempt to trim the proposed budget when Taipower sends it for legislative review.

In response, Taipower spokesman Roger Lee said the utility company has been making its investment plans well in advance to ensure stable electricity supplies.

Taipower projects Taiwan's future electricity needs based on a formula that factors in 75 percent of the government's forecast industrial growth rate and calculates how much backup electricity it plans to generate for each year, before drawing up its investment budget, Lee said.

The backup electricity rate for this year is 16.9 percent, which will decline to 11.5 percent in 2013 and drop further to 7.6 percent in 2015.

Lee said that if Taipower does not plan ahead and ensure that there is enough backup electricity, the country could face power rationing that would adversely impact economic development.

He added that as part of the expansion plans, proposals for building new power plants in Talin, Linkou, Tungshiau and Shenao have also been approved.

(By Tseng ying-yu, Lin Meng-ju and Scully Hsiao)