In order to cooperate with the government's price stabilization policy, Taipower and China National Petroleum Corporation continued to freeze and increase energy prices, which seriously affected the company's operations. The Kuomintang legislator proposed to set up a "loss reduction clause" for the "Energy Research and Development Special Fund". As long as Taipower makes an annual loss, it will not need to allocate the fund that year. However, the General Accounting Office pointed out that 98% of the energy fund's self-raised financial resources are paid by Taipower. If additional exemptions and exemptions are added, it may affect the promotion of the fund's business. DPP legislator and convening committee member Chung Jia-bin also questioned, if Taipower does not raise funds, who can? It is recommended to continue to maintain the practice of preparing additional budgets to supplement Taipower and CNPC.
The Economic Committee of the Legislative Yuan held a public hearing today on "Responses to the Losses of PetroChina and Taipower—Amendment of Articles 5 and 5-1 of the Energy Management Act." According to current provisions, Taipower and CNPC must allocate a certain percentage of their business income to the "Energy Research and Development Special Fund." However, considering that international energy costs are gradually increasing due to the sudden increase in geopolitical risks, Kuomintang legislator Chen Yongkang and others proposed to add a "loss reduction clause" to the allocation. As long as the annual settlement is determined to be a loss, the fund that should be allocated in that year will be exempted.
In response to the "loss reduction and exemption clause" proposal, a report from the Accounting and Accounting Office of the Executive Yuan pointed out that the energy fund's budget for this year includes a fund source of 4.574 billion yuan (including a treasury subsidy of 1 billion yuan and self-raised income of 3.574 billion yuan) and a fund purpose of 4.389 billion yuan. Among them, the revenue collected in accordance with Article 5-1 of the Energy Management Act is 3.492 billion yuan, accounting for 98% of the fund's self-raised financial resources, all of which are paid by Taipower. If a "loss reduction clause" is added, it will significantly weaken the self-financing ability of the "Energy Research and Development Special Fund" and may affect the fund's business promotion. As for companies that explore, extract or import oil, such as China National Petroleum Corporation, they must pay the oil fund in accordance with Article 34 of the Petroleum Management Law and are no longer required to make further allocations to the energy fund. They are not affected by this draft of additional provisions.
Regarding the losses of Taipower and China National Petroleum Corporation, Lai Jianxin, deputy secretary of the Ministry of Economic Affairs, said that the pre-tax losses of China National Petroleum Corporation and Taipower Corporation for this year are estimated to be 56.3 billion yuan and 73.275 billion yuan respectively, which will have an impact on the company's operations. Since the preparation of annual budgets is slow and urgent, an additional budget is proposed in accordance with Article 79, Paragraph 3 of the Budget Law, "The expenses of the undertakings exceed the statutory budget due to major accidents."
Lai Jianxin explained that the Ministry of Economic Affairs has supervised CNPC and Taipower to improve their capital structure through financial means such as accounting policies, real estate revaluation and appreciation, increasing foreign trade benefits, activating land assets, and cost savings. However, the losses are serious and cannot be dealt with through financial means. The second electricity price review meeting this year decided to support the priority of seeking to allocate 71.1 billion yuan in the budget, and the electricity price adjustment will be discussed in December this year.
Regarding Taipower, Lai Jianxin also pointed out that Taipower's electricity and fuel costs accounted for more than 50% of total expenditures. When geopolitical tensions caused fuel prices to soar, Taipower cooperated with the government's price stabilization policy. The huge fuel costs it absorbed caused huge financial loss pressure, which could not be offset by its own efforts alone. It still required financial support from the government through capital increases, project financing, and subsidies.
Dr. Hsu Ka-Sheng of the Institute of Energy, China Academy of Economics, believes that Taipower has accumulated losses of more than 370 billion so far. It should first clarify how much of Taipower's losses are due to the implementation of government policy tasks and how much money it has spent to stabilize the CPI (Consumer Price Index), and then provide conditional subsidies to Taipower.
Liu Shouren, secretary-general of the National Chamber of Commerce, said that energy prices have risen due to the war, and losses are a non-war crime for Taipower and PetroChina. The minimum wage has just been announced to be raised by 4.75% starting next year. If electricity prices increase in December, it will be even worse for the industry. The Federation of Commerce supports Taipower to make up for it first to solve the urgent need.
Regarding the issue of subsidies, DPP legislator and convening committee member Chung Jia-bin said that although oil and electricity are not public assets, they have very strong externalities and public characteristics, and shoulder social policy responsibilities. It is unlikely to adopt pure energy taxation or user fees. Therefore, Taipower and China National Petroleum Corporation adopted a multi-pronged approach such as differential electricity prices and not increasing the price of barreled gas, and compiled additional budgets to allocate subsidies.
Zhong Jiabin believes that the electronics industry is not only the industry that can best afford the cost of electricity, but also uses the most electricity and takes the most advantage from Taipower. TSMC pays nearly 300 billion yuan in taxes around the world a year, 90% of which is paid to the Taiwan government. Why not use the hundreds of billions of taxes contributed by the AI industry to the national treasury to subsidize PetroChina and Taipower?
