Independent power firms found guilty of unlawful collusion

Taiwan's Supreme Administrative Court overruled previous rulings on Monday as it found nine local independent power producers (IPPs) to be guilty of engaging in concerted practices in a drawn-out fair trade case.

Monday's final verdict came after the Fair Trade Commission (FTC) appealed to the Supreme Administrative Court, siding with the commission and stating that the joint action of the IPPs -- which account for 76 percent of the state-owned Taiwan Power Co.'s (Taipower) outsourced electricity -- had prohibited normal market competition, causing disruptions to the supply and demand of electricity.

The nine IPPs, which have provided electricity to Taipower since 1995 to help ensure a stable power supply for the country, were jointly fined NT$6.32 billion (US$216 million) by the FTC in 2013 for engaging in collusion regarding pricing.

After the IPPs petitioned the FTC in 2014, the fine was reduced to around NT$6 billion.

While the IPPs agreed with Taipower in 2007 to negotiate pricing on a rolling basis depending on fuel costs, the IPPs colluded between 2008-2012 to reject talks with Taipower over pricing adjustments, according to the FTC.

Their private collusion constituted concerted practice and resulted in a negative impact on the market's functioning, the FTC argued.

The IPPs then brought the case to the Taipei High Administrative Court, with further trials and retrials all resulting in rulings in their favor because the evidence provided failed to prove concerted practice, the court said.

According to the FTC, the case, which was mired in years of litigation, resulted in the highest fine it has ever issued.

The nine IPPs are Mai-Liao Power Co., Ho-Ping Power Co., Ever Power Co,, Chia-Hui Power Corp., Hsin Tao Power Corp., Star Energy, SUN BA Power Corp., Kuo Kuang Power Co., and Star Buck Power.

The IPPs were introduced during the 1990s, when Taiwan struggled with insufficient electricity due to increasing environmental awareness, according to Taipower.

During those years, the reserve margin of power supply in summer was only 5 percent, resulting in 14 instances of energy rationing in 1991 and 16 instances of energy rationing in 1994.

After the introduction of IPPs, the nation's reserve margin was raised from 4.7 percent in 1995 to 15-20 percent in 2004, which ended the problems of energy rationing and power outages, it said.

Source: Focus Taiwan News Channel