Taipower's losses this year are estimated to exceed NT$70 billion. (Photo by reporter Lin Jinghua)
[Reporter Lin Jinghua/Report from Taipei] Taipower's finances are in crisis again. Independent director Liao Huizhu bluntly said that Taipower's accumulated losses may once again exceed 400 billion yuan. The 71.1 billion yuan subsidy is currently an option that is more in line with the overall interests of the country. If the Legislative Yuan is unwilling to allocate the subsidy, December News The chances of price increases will increase greatly. She also emphasized that in the past, blocking budget allocations was due to energy policies, but if Taipower refuses to evaluate nuclear energy, outsiders may criticize it. Now Taipower has also evaluated the possibility of restarting nuclear power, and called on Blue and White legislators to stop insisting on their opinions.
As an independent director of Taipower, Liao Huizhu felt pressured by the huge losses. Outsiders will question whether the directors have fulfilled their supervisory responsibilities, and the three independent directors, in particular, have to supervise the company on behalf of shareholders. She said frankly that Taipower's finances are once again in danger. Although last year it made more than 70 billion yuan, its losses dropped to more than 350 billion yuan. However, the war in the Middle East turned the situation upside down. If no compensation is provided, Taipower's accumulated losses will return to more than 400 billion yuan.
Please read on...
Liao Huizhu said that in the past, PetroChina's finances could still barely support it, but now the buffering capabilities of the two state-owned oil and electricity enterprises are very weak, and the "wave absorbing block" is about to lose its function, which will increase the risk to the economy. She pointed out that during the Russo-Ukrainian war, prices in many countries rose very high, but the increase in Taiwan was relatively limited. The main reason was that China National Petroleum Corporation and Taipower were driving down prices. Now that the world is talking about AI competitiveness, it is actually benefiting from Taipower's low electricity prices.
Liao Huizhu believes that the 71.1 billion yuan subsidy is currently an option that is more in line with the overall national interest. If the Legislative Yuan is still unwilling to allocate the subsidy, the chance of raising electricity prices at the electricity price review meeting in December this year will greatly increase. Now that Taiwan’s AI supply chain is highly competitive, subsidy can better support power supply investment and the overall economy than price increases.
Capital increase is not an alternative for Taipower either. She pointed out that after Taipower increased its capital twice, its capital has reached 580 billion yuan. If it increases capital again, it will face many doubts. The difference between appropriation and price increase lies in the use of funds and the economic effect. If the government allocates 71.1 billion yuan in subsidies, Taipower can quickly invest in the construction of power plants to supplement the power supply needed for AI expansion. If it instead responds by increasing electricity prices, the company's costs will rise, its competitiveness will decline, and its profits and investment speed will also be affected.
Liao Huizhu pointed out that Taiwan is currently the main global AI supply chain, but no one is sure whether Taiwan can always maintain a high degree of competitiveness in the AI field. It should seize the current competitive advantage, through financial stability and expansion of power supply, so that the industry can reap benefits and share the results with the people. She emphasized that she does not have a political party position and hopes that Blue and White legislators will not only focus on party groups or individual interests, but will regard the best interests of the country as the best interests. She also lamented, "If Taipower refuses to engage in nuclear energy, it can really be scolded." However, it is now seriously evaluating the restart of nuclear power. Liao Huizhu appealed to the Blue and White Committee members to stop insisting on their opinions. Doesn't it mean that on the issue of restarting nuclear power, Taipower controls nuclear safety and does not need to spend money to ask the original factory for assistance and purchase equipment?
She said that although Taipower has assets of more than 3 trillion yuan and liabilities of more than 2 trillion yuan, Taipower's net worth is only about 200 billion yuan. Taipower may not be able to afford the construction of two natural gas power plants alone. Looking at it from afar, if this is a private enterprise, this kind of financial situation will have already received strict financial improvement requirements from the Financial Supervisory Commission. Currently, Taipower has to constantly borrow money, and the amount of borrowing is very high, putting heavy pressure on the management and directors. With the assistance of the government, Taipower and China National Petroleum Corporation have both received 300 billion yuan in project financing from public equity banks. Taipower has already used 200 billion yuan of the quota, and there are not many silver bullets left.
Grasp the economic pulse with one hand. Click here to subscribe to Free Finance Youtube Channel
