Taipei, May 5 (CNA) Increasing global fuel prices over the past few years is the main reason why state-run Taiwan Power Co. (Taipower) has incurred mounting losses, Minister of Economic Affairs Shih Yen-shiangsaid Saturday.
Acknowledging that the company's poor operating performance and inefficiency have also played a part, Shih said the high global energy prices and Taiwan's low electricity rates are to blame for the losses.
Coal and liquefied natural gas account for 40 percent and 30 percent, respectively, of the country's total power production. Since 2003, prices have risen by 176 percent and 63 percent, respectively, while electricity rates have only increased 26 percent during the same period, he pointed out.
In addition, the price of coal is expected to soar as Japan was set to shut down its last operating nuclear plant that day for regularinspections, which means it will have to rely more heavily on coal forits power generation.
Even though the government has decided to raise electricity rates next month, Taipower is still expected to lose over NT$80 billion (US$2.73 billion) this year, which will push its accumulated losses to nearly NT$200 billion by the end of 2012, Shih said.
This will exceed half of the company's capital of NT$330 billion, he went on.
According to a three-stage plan, the first- and second-stageprice hikes will take effect June 10 and Dec. 10, respectively,while the date for the third stage will only be determinedafter the government reviews how well the state-run power company has carried out reforms.
According to the plan, electricity rates in the first two stages will rise by 9 percent, 21 percent and 27 percent on average for household, commercial and industrial users,respectively.
(By James Lee)