Thu, Mar 14, 2013 - Page 13 News List

Power operators penalized for collusion: FTC

By Camaron Kao  /  Staff reporter

The Fair Trade Commission (FTC) yesterday fined nine independent power producers (IPP) a total of NT$6.32 billion (US$213.08 million) for collusion after they refused Taiwan Power Co’s (Taipower, 台電) request to renegotiate electricity prices.

“The total fine is the highest in the commission’s history because we wanted to inflict a high cost on companies that commit such wrongdoing,” FTC Chairman Wu Shiow-ming (吳秀明) said.

Wu said the nine companies have to pay the fine within 15 days. They can apply to pay in installments.

From 1999 to 2006, the IPPs signed individual contracts to sell the power they produced to Taipower.

From 2007 and 2008, the companies renegotiated prices with Taipower to reflect rising procurement costs, which the commission said boosted their gains from that period to 2011 by NT$19.4 billion.

However, Taipower’s request during talks from 2007 to last year for price adjustments to reflect lower interest rates, which have pushed down the IPP’s lending costs, was rejected. This caused Taipower to spend NT$5.9 billion more on electricity purchases from 2007 to 2011, the commission said.

The commission, which started the investigation in October last year, said the IPPs held at least 20 meetings between August 2008 and October 2010 to discuss electricity prices and colluded to sabotage the negotiation process.

Based on the minutes of the meetings, the nine companies agreed that they would not adjust prices, but that they would inform Taipower separately, it said.

The commission said the IPP’s action had an adverse impact on the nation’s power supply.

Among the nine companies, four are subsidiaries of Taipower, and six companies agreed to start price negotiations with Taipower after the commission started the investigation, the commission said.

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