Taipower hoping for price hike after Ma assumes office

Taiwan Power Co (Taipower, 台電) may win government backing to raise prices this year to counter widening losses caused by higher fuel costs.

The utility plans to seek approval for the second tariff increase in 25 years after president-elect Ma Ying-jeou (馬英九) takes office May 20, company spokeswoman Tu Yueh-yuan (杜悅元) said yesterday.

INFLATION

The government has stopped the utility from raising prices since 2006 because of accelerating inflation, which the central bank has attempted to tame with 15 interest rate increases.

Taipower may post a loss of NT$130 billion (US$4.3 billion) this year if fuel costs and electricity prices stay at current levels, Tu said.

"We expect prices to rise," Tu said by telephone in Taipei. "Without price increases, we'll be in a dreadful financial condition."

LOSSES

Taipower lost NT$31.2 billion last year.

The company raised prices by an average 5.8 percent in July 2006, its first increase in 23 years.

The government has since prevented the utility from boosting tariffs on concern they may help stoke inflation that accelerated to the fastest in 13 years in October.

Widening losses are forcing Taipower to borrow more, Tu said.

BONDS

The company plans to sell up to NT$80 billion in bonds this year, 60 percent more than initially proposed, the company said in February.

The cost of importing power-station coal soared 58 percent from a year earlier to US$93.98 a tonne in January, including cost, insurance and freight, the Bureau of Energy said last month.

Coal-fired generators accounted for 46 percent of electricity output in January, compared with 23 percent for nuclear reactors and 17 percent for gas-fired stations, data on Taipower's Web site shows.