In retrospect for the past year, under the impact of the rampant global financial crisis and soaring international fuel prices, despite the fact that Taipower's employees made an all-out effort to upgrade the company's management performance, escalating fuel costs were far from being contained by the company's cost reduction measures. Calculating the international fuel price hikes from 2006 up to July 1, 2008, if an adjustment of tariff schedules was to completely reflect fuel costs, it should reach 50.4%. However, in order to alleviate the impact on the economy and people's livelihood, the government approved a moderate adjustment in two phases. In each phase, the tariff schedules were adjusted upward 12.6 %, 1/4 of the necessary adjustment. Phase 1 was effective on July 1 and Phase 2 on Oct.1. The combined adjustment of the two phases was 25.2%. This was unable to totally reflect the escalating fuel costs for power generation. The deficit before income tax (pretax income) was held at NT$101.4 billion, with Taipower posting the largest loss in 62 years since its establishment.  

      Confronted with the ever-severe challenges and pressures incurred by fuel price hikes and drastic financial losses, Taipower's employees dedicated whole- heartedly their efforts to promote measures of broadening sources of income and reducing expenditures and upgrading management efficiency. Our management performance indicators all kept improving.

      In 2008, the outstanding achievements included the following:

1. The production of the 6 units of the three nuclear power plants reached 39.26 billion KWh, the highest in Taipower's history.

2. The line loss was 4.58% and the frequency quality 98.722%. Both are the best achievements in Taipower's history.

3. The Taichung Thermal Power Plant Unit 3 has been in operation for 703 consecutive days and Units 7&8 for 600 consecutive days. This demonstrated that the maintenance and operation quality of these units were remarkable.

4. The System Average Interruption Duration Index (SAIDI) was 20.18 min./customer.year. This indicates that power supply reliability has been continuously improving.

      Presently, although the international energy prices have declined, the global economy, impacted by the financial storm, has been in great recession. All the business activities also encountered difficult management environments. In the future, there will still be hardships that we have to face. As a national public utility company, we should work together with the country to jointly overcome these difficulties and challenges.

      The following are the important points and directions of our efforts for the future:

Reinforcing Management Strength and Upgrading Productivity

     In response to the expectation from society of raising national enterprise management performance, Taipower will proactively continue its various measures of“broadening sources of income and reducing expenditures”and implementing“productivity upgrade projects” which includes short- and long-term projects of upgrading generation units efficiency, reinforcing power supply capability, improving power supply efficiency, reducing operation costs, adjusting energy sources structure, promoting power demand response, implementing customer energy conservation, and enhancing customer satisfaction. Furthermore, Taipower will review the simplification of organization and manpower to reinforce the company's management strength and upgrade the company's management performance.

Improving Energy Sources Structure and Stabilizing Power Supply

    To supply sufficient power and balance regional power supply and demand, the company will continue engaging in the construction projects of Tatan, Linkou, Shenao, Changgong, Talin, and Tunghsiao Thermal Power Plants and the Fourth Nuclear Power Plant. It is expected that the base, mid, and peak load power generation structure can be improved and maintained at a reasonable reserve margin. After the completion of the Fifth Distribution Project and the Sixth Transmission and Substation Project, the company will proceed with the Sixth Distribution Project and the Seventh Transmission and Substation Project, to establish a sound power grid to upgrade power supply stability and reliability.

Promoting Energy Conservation and Carbon Reduction and Enhancing Energy Efficiency

The Executive Yuan unveiled the“Guidelines for Sustainable Energy Policy”in June 2008. In addition to specifying the country's carbon reduction targets, the rate of low- carbon energy generation will increase from 40% to over 55% in 2025. In the adjustment and efficiency enhancement of energy sources structure, the following measures have been formulated:

1. Developing non-carbon renewable energy- effectively developing the renewable energy potential, which will account for 8% of the power generation system in 2025.

2. Increasing the use of low-carbon LNG, which will account for 25% of the power generation system in 2025.

3. Promoting energy sources diversification, listing nuclear power generation as an option for non-carbon energy development.

4. Accelerating the renewal process of generation units, the heat rate of new coal-fired units will be targeted at over 42%.

5. Introducing clean-coal technology and CO2 capture/storage.

      Complying with the guidelines, Taipower will actively draw up relevant corresponding measures for implementation.

Fulfilling Corporate Social Responsibility and Soliciting Support from Society

      The company understands profoundly the concept of“co-existence and mutual prosperity”with society, and also realizes that the development of an enterprise needs customers' trust and the support from society.

      While pursuing its sustainable future, the company will also fulfill its social responsibility. In the future, Taipower will commit itself to being a good“corporate citizen”, promote the participation of the interested parties, strengthen its image as a good neighbor, promote local mutual prosperity, help underprivileged groups, sponsor public charitable activities, enhance environmental protection, emphasize ecology conservation, and solicit trust and support from society.

Strengthening Manpower Utilization and Maintaining Discipline

      The average age of this company's employees, 48 years old, is rather high. To solve manpower gap problems and to ensure the experience of core technologies to be passed on, in addition to actively promoting knowledge management and establishing standard operation procedure, the company is recruiting new talents for core technologies. It is an attempt to maintain high-quality management performance and strengthen management competitiveness. Furthermore, Taipower will strengthen its organization and system. It will reinforce work discipline and corporate ethics. The company will expect its employees to undertake their work with pragmatic and serious attitudes to enhance the company's solidarity and harmony.

      Presently, the global power industry is in a highly uncertain era. The management of the power industry is encountering unprecedented challenges and tests. Taipower is a public utility strongly committed to its mission. Facing the current management environment, Taipower will uphold the spirit of“facing crisis, pursuing stability, and getting stronger”to exert itself to confront challenges and create opportunities in order to fulfill the company's vision“ To become a prestigious and world-class power utility group.”