Currently Formosa has two 60-megawatt cogeneration units at its Mailiao complex as well as three 60-megawatt units classified as being provided by an independent power producer, according to Taipower.
While Taipower purchases all the power from the three IPP-classified units at a negotiated rate of NT$0.9 per kilowatt hour, the excess 40 megawatts from the two cogenerators are purchased at the set rate of NT$1.62, both well above the NT$0.5 production cost of the coal-fired plant.
By targeting all cogenerators for blame Taipower is being "misleading," said Ho, who said that its losses have resulted mainly from the excess purchase of the Mailiao plant.
Production costs of many cogenerators are extremely high due to the choice of natural gas as a fuel, Ho said. The cost of production is about the same as the government-set purchase price, he added. "We use natural gas as a fuel and we lose money."
One foreign business executive, who declined to be named, agreed, saying the government should have limited the amount of power it purchased from large cogenerators like Formosa, which claims it sells 53 percent of its total output to Taipower.
"That's a lotta juice ... they're making a lot of money," said the executive. "They should have limited it so that the total percentage of electricity a cogenerator can sell cannot exceed 30 to 40 percent unless specifically approved by the government," he added.
Taipei officials declined to name a specific cogenerator or independent power producer when stating its case for halting approvals of new suppliers, saying only that current conditions were unreasonable.
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