Taipower Losses Scrape Bottom

Taipower Losses Scrape Bottom
United Daily News editorial (Taipei, Taiwan, Republic of China)
A Translation
August 29, 2013

Summary: Taiwan electricity rates are too low. People realize this. They would be willing to pay a reasonable price to achieve industrial growth and environmental balance. Unfortunately the government and Taipower electricity rates are black box operations. This ensures that electricity rate hikes remain opaque, and low value-added industries cannot be replaced. Taipower has gone from "honorable loser" to a "necessary evil." Will these endless losses ever hit bottom?

Full text below:

The Ministry of Economic Affairs has announced an October electricty rate hike. The magnitude of the hike is less than announced previously. For families and small shops the threshold will not be raised. But over ten million users will feel the price increases. The new program defers to consumer sentiment. It raises the excessively low rates for industrial electricity, making them more reasonable. Overall Taipower rates remain among Asia's lowest, but alas are no help to business competitiveness. Taipower remains on the brink of collapse -- a money pit.

Taipower finds itself trapped and immobilized. The Number Four Nuclear Power Plant remains a hot potato. The liberalization of the energy industry and the promotion of green energy have fiascoes, like the proverbial blind men struggling to discern the shape of an elephant. Taiwan's political and business environment is deformed. Well-intentioned policies invariably attract unscrupulous politicians. State-owned enterprises have long transformed benefits into exclusive slush funds. As a result Taipower losses have skyrocketed. Realistic constraints are vital. The cure must fit the disease. Rate hikes are better than nothing, but that is about all they are.

Should electricity rates be hiked? The public already knows the answer. The principle is "user pays." What should be paid, will be paid. If international fuel prices increase, users will have to pay no matter how much it hurts. The problem lies with the Ministry of Economic Affairs, which determines rate hikes. Taipower must tell the public whether our electricity is expensive or cheap, and how that is determined. Has Taipower done its utmost to run an efficient and responsible business?

Anti-nuclear sentiment is on the rise. One issue urgently in need of discussion, is the impact of different fuels on electricity prices. Politicians have played fast and loose with this issue, and misled the public. They talk only of safety. They ignore the reality of rising international fuel prices. They single out nuclear power as dangerous. They ignore the fact that natural gas prices are several times higher. They ignore the impact dependence on natural gas would have on electricity rates. When the opposition was in power, it rushed to complete the Number Four Nuclear Power Plant. It now conveniently blanks out this fact. It now blames Number Four Nuclear Power Plant problems on the incompetence of the ruling party.  It now politicizes the issue and incites public discontent over rate hikes.

Energy prices have long failed to reflect true market rates. State-owned enterprises have long been indifferent to losses because they are passed on to others. These are the reasons Taipower losses have become a black hole that can never be filled. Those in charge will retire at age 65. Losses are listed in the ledger, then passed on to others. They are not factored into the individual official's job performance. Under such conditions, how can anyone know how well they performed? How can anyone know how much was lost?

The current rate hikes mean that in one year Taipower will receive 50 billion NT in revenue. But even this cannot save Taipower from bankruptcy. On Father's Day this year the temperature reached a high of 39.3 degrees Centigrade. Taipower's reserve capacity is inadequate, and could lead to power outages at any moment. The public must understand this crisis. Residential electricity users may be dissatisfied with the rate hikes. But they must also appreciate the plight of lower echelon Taipower staff on the firing line, how hard they work making emergency repairs. They must be reminded of the fact that the electricity on that day was produced by high-priced gas-fired electrical power generation. Green Energy contribution to the power supply in the form of wind power was less than one percent. This is the reality. The public must not listen only to the bleatings of anti-nuclear Green Energy charlatans.

The deterioration of the power grid is Taipower's most intractable problem. Given Taiwan's power supply environment, nuclear power, coal, fire and other forms of "coolie labor" base load generating capacity must reach 65%. Only then can it achieve stability and economy. But current base load generating capacity is barely 40%. Summer peak load generating capacity requires the use of expensive gas turbines and fossil fuel. Therefore a closer look this electrical pricing scheme shows that Taipower's operational loss situation remains unchanged.

Times have changed. Policies must also change. For example, industrial electricity rate concessions for high value-added industry do not work. Industries long dependent on low rates lack the motivation to conserve. A capital cost of over 3 NT, brings a return of less than 1 NT in off-peak electricity prices. The result is that cast iron foundries, fabric dyeing, and other low value-added industries refuse to shut down or restructure. How can this be justifed?

The current price hikes are too conservative. As a result, the government forces taxpayers to subsidize Taipower's losses. On top of which the deficit is increased. Government subsidies unjustly force the public as a whole to subsidize major energy users. The government prices energy far below international standards. This reduces business awareness of the need to enhance their competitiveness.

Taiwan electricity rates are too low. People realize this. They would be willing to pay a reasonable price to achieve industrial growth and environmental balance. Unfortunately the government and Taipower electricity rates are black box operations. This ensures that electricity rate hikes remain opaque, and low value-added industries cannot be replaced. Taipower has gone from "honorable loser" to a "necessary evil." Will these endless losses ever hit bottom?

台電無代價的虧損伊於胡底
【聯合報╱社論】
2013.08.29 05:05 am

經濟部宣布十月電價調漲，漲幅低於稍早宣布的幅度，並針對家庭及小商店拉高了不調漲的度數門檻，使一千多萬民生用戶免受漲價之苦。新方案充分照顧了民生用戶的感受，而調整偏低的工業用電，也多少有合理化的用心。但從大局看，台灣電價維持「亞鄰最低價」卻無助競爭力，台電瀕臨倒閉的危機依舊存在，電力結構還是「賣一度虧一度」。

台電之所以陷入今天動彈不得的處境，除了核四的燙手山芋外，主要是電業自由化及綠色能源風潮在推動上的瞎子摸象。在台灣扭曲的政商環境下，任何立意良好的政策都引來無恥政客的鯨吞蠶食；長期扮演利益轉換「大水庫」角色的國營事業則被當成禁臠，導致台電的虧損劇增。若不實事求是，直接針對病灶下手，調漲電價只是聊勝於無。

其實，電價該不該調，民眾心中自有一把尺。基於「使用者付費」原則，該繳的費用不會不繳；而若是國際燃料價格上漲，每個用戶再痛也得付。問題是，主導費率調整的經濟部、台電公司必須誠實告訴社會大眾：我們的電價是貴或便宜，究竟是怎麼算的？台電團隊確實盡到了有效而負責的經營嗎？

正當反核聲浪高漲，最該討論的，就是使用不同燃料所產生的電力，對電價有何影響？偏偏這部份的討論，卻遭到政客的操弄和誤導。他們一味空泛地談安全，撇開國際燃料價格上漲的事實不談；一味指責核能危險，卻不說天然氣的價格高出幾倍，乃至對電價影響如何。在野黨毫不在乎自己執政時如何撥款核四要求趕工，卻把核四一舉推給執政黨的無能，也導致民眾對電價調升的政治化與情緒化反應。

能源價格長期未能合理化，加上國營事業長期不在乎「虧損遞移」，是造成台電虧損到「黑洞」般難以填補的原因。反正主事者滿六十五歲退休，虧損列入帳面移交，又不計入個人經營績效；在這種情況下，績效好又如何？虧損累累又如何？

這次漲價，一年可為台電挹注五百億元收入；但即使如此，台電仍無法解脫瀕臨破產的命運。以今年父親節當天高溫達三十九點三度的供電環境看，台電備轉容量隨時可能不足而導致斷電，這是民眾必須了解的危機。因此，用電戶再不滿意電價，也該了解在火線上冒險搶修線路的基層台電員工有多辛苦。必須提醒的是，當天的電力，是靠著高價的燃氣發電撐場面，綠色能源風電的比率根本不到百分之一。面對這樣的事實，國人不能偏聽那些口頭反核者隨意吹噓綠能神效的氣球。

基載電力結構惡化，是台電最難解的問題。以台灣的供電環境，核電、燃煤、火力等所謂「做苦工」的基載電力，必須要達到六成五，才可能達成供電的穩定與低廉。但現在的情況是，基載電力僅勉強達到四成，夏天超載的用電都必須仰賴高價的氣渦輪、燃油供應。因此，細看這次電價方案，台電「虧本經營」的景況，其實沒有任何改變。

再者，一些時空環境已經變化的政策，也必須要大修。例如，工業用電的低價優惠，高附加價值產業並不買帳，而依賴低電價的產業，卻因此長期缺乏節能更新動機。成本達三塊多、卻只售不到一元的離峰電價，造成鑄鐵、染整等低附加價值產業不肯撤走或轉型，這說得過去嗎？

這次漲價調得小心翼翼，其結果，必然是政府要以納稅的人錢來補貼台電的虧損。這除使政府赤字益形惡化，更將產生全民補貼能源使用大戶的不公不義問題；而台灣電價遠低於國際水準，也將不斷降低企業提升競爭力的警覺。

台灣電價偏低，其實民眾都瞭解，也願意負擔合理的電價來達成產業成長與環境保護的平衡。遺憾的是，政府和台電對電價諱莫如深，造成電力價格始終不透明、低附加價值產業無法汰換。而台電從「光榮慘業」淪為「必要之惡」，這種無代價的虧損，伊於胡底？