State-run Taiwan Power Co (Taipower, 台電) yesterday said it had adjusted the terms of its contracts with nine independent power producers (IPPs) in a bid to trim its huge losses.
The move is also part of the company’s efforts, including planned electricity rate hikes in October, to fix its financial health, the utility said in a statement.
A total of eight IPPs had agreed to modify the contracts they signed with Taipower, while negotiations were still ongoing with the remaining company, Taipower said.
With the terms of contracts revised, Taipower said it could save up to NT$1.54 billion (US$51.44 million) in expenditure a year on electricity purchased from IPPs.
The Bureau of Energy last year adjusted the rates at which Taipower purchases electricity from IPPs, enabling it to save another NT$2.5 billion every year, Taipower added.
As of July this year, Taipower’s accumulated losses had piled up to NT$227.1 billion.
Though the cost-reduction plan can help relieve Taipower’s financial burden, the utility said it still needs to raise electricity rates in October in order to sustain its business and slow down its financial deterioration.