Two Taiwan Power Producers to Contest Record $213 Million Fine

Two of Taiwan’s independent power producers said they plan to appeal a record fine by the competition regulator against nine companies for violating antitrust laws during negotiations with Taiwan Power Co.

Mai-Liao Power Corp., part of the Formosa Plastics Group, and Ho Ping Power Co., a unit of Taiwan Cement Corp (1101), said they didn’t coordinate their actions with other power companies during pricing negotiations that started in 2007, according to separate statements filed to the island’s stock exchange today.

The Fair Trade Commission announced yesterday it would fine nine power producers, including Mai-liao and Ho Ping, a record NT$6.32 billion ($213 million) for coordinating a refusal to negotiate with Taiwan Power and affecting the supply of electricity in the market. The state-owned utility has relied on independent producers to meet demand since 2000 and posted a NT$43.3 billion loss in the preceding year, according to its 2011 annual report.

“The commission duly punished a coordinated action against market and economic order,” the Ministry of Economic Affairs said in a statement yesterday. “It should prevent companies from attaining an unfair advantage through mutual agreement.”

Six of the nine companies have agreed to new pricing for Taiwan Power, which the economy ministry said would yield NT$18.4 billion in savings.

Pricing Talks

Besides Mai-Liao and Ho Ping, Chahui Power Corp., part of the Far Eastern Group, is the other holdout on price negotiations, according to Sun Lih-Chyun, a spokesman for the commission. Mai-Liao and Ho Ping were fined NT$1.85 billion and NT$1.35 billion respectively, which they must pay within 15 days of receiving formal notification.

Taiwan Power will continue its talks with the three companies, Roger Lee, a spokesman for the utility, said by phone today.

The commission ruling comes as Taiwan Power faces renewed public criticism over the construction of the island’s fourth nuclear power plant, after missing a deadline to begin commercial operations at the end of last year.

More than 68,000 people demonstrated against nuclear power and Taiwan Power’s $8.9 billion plant before the second anniversary of the March 11 nuclear meltdown at Japan’s Fukushima Dai-Ichi power plant.

President Ma Ying-jeou has said he supports a referendum to decide whether to complete the nuclear plant. Premier Jiang Yi- huah said the state utility faces bankruptcy if the plant isn’t completed, the Taipei-based China Times reported on March 9.

To contact the reporter on this story: Cindy Wang in Taipei at hwang61@bloomberg.net

To contact the editor responsible for this story: Debra Mao at dmao5@bloomberg.net

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