Taiwan Power to sue 4 IPPs after negotiations fail

Taiwan Power Co will sue four independent power producers due to disputes in the terms of contracts for electricty sales.

The four IPPs — Kuo Kuang Power Co, Star Energy Corp, Sun Ba Power Corp and Hsing-yuan Power Corp — still disagreed on revising the conditions for selling their electricity to Taipower after months of negotiations.

Taipower chairman Hwang Jung-chiou said that the company would renegotiate the terms of contracts in a bid to reverse the public’s negative sentiment toward the company. 

The public has been complaining about Taipower's overly generous purchasing contracts with the four firms.

Taipower’s statement said that during the negotiations, it asked IPPs to distribute 60 percent of the profits they generate to the people of Taiwan and keep the remaining 40 percent, if their return-on-assets-ratio exceeds 3 percent.

The company said it also offered other options to sweeten the deal, but the IPPs maintained their objections to Taipower’s proposal, saying that changes in the terms of contracts would need to be approved by their boards and shareholders.

“The negotiations formally broke down today,” Taipower said in the statement. “We have decided to take legal action to solve the disputes.”

Taipower is likely to file lawsuits against the four IPPs in two weeks at the earliest. 

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