The Ministry of Economic Affairs has ordered the Bureau of Energy to settle a dispute between Taiwan Power Co (Taipower, 台電) and Mailiao Power Co (麥寮汽電) by early next week, possibly saving the latter “billions of New Taiwan dollars” in fines for not supplying power to Taipower.
“Taipower cannot blame Mailiao Power, because it is a force majeure that is preventing Mailiao Power from burning coal to supply electricity in the coming months. It should not be fined by Taipower,” a high-ranking official at the ministry told the Taipei Times by telephone.
The dispute between the state-run utility and the independent power producer, which is a coal-fired power subsidiary of Formosa Plastics Group (台塑集團), comes as Mailiao Power is nearing its permitted annual quota for burning coal for its power generators, as mandated by the Yunlin County Government.
SUSPENSION
Mailiao Power will have to suspend the operation of two of its three power generators from November to comply with the local regulations, company chairman Chen Bao-lang (陳寶郎), who is also chairman of Formosa Petrochemical Corp (台塑石化), said in an interview on Wednesday with the Chinese-language Economic Daily News.
The report said that Mailiao Power has been running at full capacity to cope with various issues that disrupted the supply of electricity during the summer, resulting in the company using up its coal quota early.
Nonetheless, Taipower has insisted that Mailiao Power comply with their contract, which states that it cannot stop producing and selling electricity to Taipower unless its plants are closed for annual maintenance.
Mailiao Power could faces fines of between NT$2 billion and NT$3 billion (US$65.78 million and US$98.67 million) from the state-run utility, according to the contract, Chen told reporters in June.
An unnamed Formosa Petrochemical director told local media that two power generators might be shut down on Oct. 28, which could affect the nation’s power operating reserves by up to 3.6 percent.
WINTER DEMAND
The source at the ministry said that the bureau has been helping in negotiations with the two parties for months, but has yet to resolve the problem, because a power suspension from Mailiao Power would make it even more difficult for Taipower to maintain stable power supply during winter.
Minister of Economic Affairs Shen Jong-chin (沈榮津) on Monday asked the bureau to make a greater effort to persuade Taipower not to fine Mailiao Power, the source said.
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