Fair Trade Commission fines IPPs NT$6 billion
Taiwan News, Staff Writer
2014-07-10 02:03 PM
On Wednesday the Fair Trade Commission (FTC) levied a fine of NT$6.007 billion against nine independent power providers (IPPs) for price-fixing and refusing to lower the rates they charge for providing electricity to the power grid in Taiwan. This is the third time the FTC has imposed a fine on the recalcitrant IPPs and is nearly NT$500 million lower than the NT$6.5 billion penalty it handed out near the end of last year. That fine was overturned by the Executive Yuan after the IPPs filed an appeal.

A spokesperson for the nine IPPs, which include thermal power plants such as Starpower Electric, invested by Taiwan Cogeneration Corporation, and FPG’s Mailiao power plant, said the power providers are not quite sure why the FTC decided to levy another fine. He said the IPPs will have a lawyer examine the commission’s ruling before deciding on whether to file another appeal. In addition, the IPPs are awaiting a ruling from the Supreme Court on whether privately-owned power companies should be included in the punishments meted out by the FTC.

Two years ago an FTC survey found that the Mailiao plant and eight other private power providers had all raised their prices for electricity fed into Taipower’s power grid between August 2008 and October 2011. The FTC ordered the IPPs to lower their rates but the group declined to do so, and the FTC ruled them in violation of Section 14 of the Fair Trade Law. At that time it issued an initial fine of NT$6.32 billion against the group.

The initial fine was issued nearly a year and a half ago but the nine IPPs filed an appeal with the Executive Yuan, which reversed the sanctions last September. The FTC came back with the revised fine in November, only to have it reversed once more by the Executive Yuan, and now the commission is levying a fine for the third time.

FTC spokesman Wu Cheng-wu said Wednesday that after the Executive Yuan overturned its punishment of the IPPs for a second time it re-allotted the fines among the nine plants based on each operator’s profitability, how long it had been demanding excessive payments and other considerations.

The FTC says that regulations call for a fine of no more than 10% of a company’s annual income for price-fixing. The fines imposed on the IPPs amounted to about 6% of their income for last year.

In May the Legislative Yuan passed on first reading amendments to the Fair Trade Law that include, among other things, an end to the right to appeal to the Executive Yuan to overturn a fine. Wu Cheng-wu notes that as the bill has not completely cleared the Legislative Yuan, the IPPs can still appeal the latest fine. He said the FTC is hopeful that the Executive Yuan will not revoke the fine currently outstanding against the IPPs.

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