It has been 60 years since the establishment of the Taiwan Power company (Taipower) in May 1946. For supporting national economic growth, Taipower has made continuous and tremendous efforts in expanding the power system infrastructure. Over the past 60 years, the company has kept growing bigger and stronger. The installed capacity increased from 280 MW in 1946 to 37,370 MW. The current 330,000-km long transmission lines reach every corner of Taiwan. Energy sales increased from 0.3 billion KWh to 181.6 billion KWh. The number of customers increased from 0.4 million to 11.7 million. In order to meet economic development and upgrade people's living standards, Taipower provides services 24 hours a day as well as sufficient power supply all year round.

    However, in power supply, besides a small amount which comes from nuclear, hydro and wind power generation, the remaining 80% of power generation depends on imported fossil fuel. Owing to the soaring fossil fuel prices in the international fuel market in recent years, the company adopted many measures to streamline its operation, such as, strengthening power system's economic dispatch, promoting energy conservation, reducing line loss, cutting down fuel procurement costs and expenses in power purchased, broadening sources of income and reducing expenditure within the company, etc. Despite these efforts and even after the government's approval to make slight adjustments of electricity rates, effective on July 1, the company still faced a loss of NT$2.9 billion in its balance sheet before income tax, a record first time in its 60 years of operation. This loss was not caused by the company's inadequate management, but by the insufficient adjustments of electricity rates which didn't reflect the scale of international fuel price hikes. In the future, while continuing the above measures, Taipower will propose in an appropriate time frame a reasonable electricity rate adjustment mechanism to the government to reflect our real performance in management.

In 2006, major management performances were:

• 1. Continued growth in energy sales and the number of customers.

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• 2. In power supply reliability, the SAIDI (System Average Interruption Duration Index) was reduced from previous year's 30.19 to 29.27 min/customer.year and SAIFI (System Average Interruption Frequency Index) was slightly increased from previous year's 0.37 to 0.39 times/customer.year—the second best in Taipower history.

• 3. The record breaking peak load 32,060 MW, a 3.6% increase over the previous year.

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• 4. Employees' productivity increased from the previous year's NT$17 million to NT$18 million, an increase of 6.9%.

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• 5. The line loss has been below 5% for 3 consecutive years -near the top of the international power industry.

    The company also continued making efforts in the improvement of its management, including reinforcing its core capability, recruiting high-quality employees, promoting knowledge-based management, substantiating nvironmental protection and industrial safety, and engaging in the re- engineering of organization and manpower. Besides looking for discipline and efficiency of personnel, emphasis was also made in employee devotion, vitality and creativity. The First Nuclear Power Plant was awarded in“The 7th Standardization Fellowship Award”by the Ministry of Economic Affairs（MOEA）. This demonstrated the government's recognition of Taipower's efforts in this regard.

    While striving for its management performance, Taipower reciprocated what it had got from the society in order to co-exist and co-prosper with neighboring communities. To fulfill its social responsibility, Taipower actively participated in the activities of appreciation and showed its caring for the society, such as helping the underprivileged in impoverished areas through cooperation with the Hualian Mennoite Hospital and the Taitung Christian Hospital to launch the“2006 Seeds of Hope”plan and recruitment of students from aboriginal families to undergo a training for community and tribal services. This would not only enable them to earn tuition fees but also offer them more opportunities to serve and understand the needs of their hometowns. It was expected that remote aboriginal tribes would not only be the places for the old people and children in the future but also become places of hope for the young and the middle-aged as well.

    Meanwhile, there were significant accomplishments in major construction projects, including:

• 1. Completed the installation of the Unit 2 Reactor Pressure Vessel of the Fourth Nuclear Power Plant. This marks another milestone in nuclear construction (Unit 1 was installed in 2005). After these 2 units, 1,350 MW each, start commercial operation, the imbalance of the power supply between the North and the South will be resolved and the power supply stability will be therefore greatly upgraded.

• 2. Promoted“10-Year Wind Power Development Plan.”In 2006, four wind power stations, namely, Kuangyuan, Hsianshan, Taichung, and Changgong, joined the power system. The organizational level of the Wind Power Engineering Office was upgraded to be in charge of wind power construction projects and promoting the development and utilization of clean, renewable energy.

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• 3. The items and the scale of capital expenditure of Taipower ranked first among the state-run enterprises. The execution rate of capital expenditure reached 95.32% in 2006. All major construction projects were efficiently implemented because of active promotion and strict control. This also contributed greatly to national economic growth.

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• 4. "The Wufeng Substation 1st Stage D/S Electric Facilities Turkey Project" and“The Chenbei-Chungtao 161 KV Cable Turkey Project”were awarded in“the Public Construction Golden Award,” the highest honor in the construction sector.“The New Wuchien Tunnel and New Lishi Creek Diversion Project”received the“Award on Outstanding Public Construction Project”by the Chinese Institute of Engineers. This demonstrates that, in addition to construction progress, Taipower also emphasizes the excellence of project engineering and quality.

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• 5. In 2006, 16 power plants from Taipower, accounting for about half of the total participants, took part in the“Energy Industry Greenhouse Gas Inventory Plan”hosted by the Bureau of Energy, the MOEA. The Mingtan Hydro and Taichung Thermal Power Plants passed international certification. In addition, the Taichung, Hsinta and Tunghsiao Thermal Power Plants, who joined voluntarily the greenhouse gas reduction plan, were awarded by the Bureau of Energy, the MOEA.

      For the coming year, as the company still faces severe challenges, we will continue our efforts in the following important issues to overcome the difficulties: further promoting the energy conservation plan, improving management measures, proposing in an appropriate time frame a reasonable electricity rate adjustment mechanism to the government, controlling construction schedule of the Fourth Nuclear Power Plant, conducting environmental assessments of the thermal power plant replacement projects, eliminating the problems faced while constructing major substations and transmission lines, conducting a referendum for low-level radioactive waste (LLW) final disposal site, licensing/planning the mid-term spent fuel storage facility for the First and Second Nuclear Power Plants, etc. All these will require the concerted effort of Taipower employees to fulfill the company's mission as a public utility and to make known to the public Taipower's consistent sincerity and striving in providing quality service.

      Electricity is a necessity for everyone's livelihood and needs to be developed sustainably. In the past 60 years, adhering to the spirit of sacrifice and contribution, numerous Taipower employees gave whole-hearted devotion. This enabled Taipower to reach today's scale and achievement. In the future, Taipower will further dedicate itself to fulfill the belief that“In the cerebration of  Taipower's 60th anniversary, Taipower will strive to continue its effort for sustainable development.”Taipower will accelerate the improvement of its management as an enterprise, upgrade management performance, and create an even higher corporate value.