About 1,000 Taiwan Power Co (Taipower, 台電) employees yesterday marched to the Executive Yuan in Taipei to protest a planned amendment to the Electricity Act (電業法) aimed at power market liberalization, which they said would split the state-owned company and allow private businesses to monopolize power rates.
The protest, which was launched solely by Taipower employees without the company’s union, started on Sept. 5 at the Ma-anshan Nuclear Power Plant in Pingtung County and concluded with yesterday’s rally, with some protesters traveling from Pingtung to Taipei on foot.
Although the Executive Yuan has yet to finalize a draft of the amendment to be submitted to the Legislative Yuan for review, protesters said the government was planning to force through the amendment in a short time.
The draft amendment aims to open the power market and separate the energy industry into three categories: power generation, power distribution and energy brokerage, with the power distribution industry to remain state-owned.
Protesters said the proposed liberalization would only benefit large businesses and cause electricity prices to rise, while Taipower might be split into different companies to make way for competitors.
Tseng Yueh-hui (曾玥惠), spokeswoman for the demonstrators, said Taipower has been asked to shoulder government policy costs, such as an electricity subsidy for schools, a “renewable energy” subsidy and reserve capacity maintenance, but those costs are not factored into Taipower’s pricing mechanism.
Power rates will increase if the amendment is approved and the power industry is deregulated, as those costs will be transferred to consumers, Tseng said, adding that it is estimated the price of electricity will go up at least 142 percent.
Hsiao Hsin-yi (蕭信義), director of the demonstration, said Taipower is allowed a fixed profit margin of 3 percent, while surplus profit is invested in developing sources of renewable energy, but independent power producers are not required to divert funds to renewable energy development unless they have a profit margin of more than 25 percent.
“What is lining the pockets of businesses if this is not?” Hsiao asked.
Nations and regions that have liberalized their power markets — such as the UK, Germany, Spain, California in the US, Ontario in Canada and the Philippines — have suffered from skyrocketing electricity prices, while Japan and South Korea aborted liberalization plans.
Liberalization does not necessarily lead to decreased commodity prices, Hsiao said, citing as an example Formosa Plastics Group (台塑集團), which promised prices one-third of those of state-owned oil refiner CPC Corp, Taiwan (台灣中油) that never happened after the oil industry was deregulated.
The liberalization of the energy market will also be detrimental to the development of “green” energy, as the government’s procurement policy on renewable energy has forced Taipower to sell “green” energy at prices much lower than procurement costs to support the burgeoning industry, said Hsiao Hsuan-chung (蕭鉉鐘), deputy director of the demonstration.
“Once the power market is liberalized, independent power producers will no longer invest in renewable energy and will instead opt for the cheapest coal-fired power generation,” Hsiao Hsuan-chung said.
Independent power producers will also be able to capitalize on Taipower’s infrastructure without paying for construction and maintenance costs, creating an unfair environment for competition, he said.
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