Taiwan Seeks NT$414.8 Billion Energy Support Package as CPC and Taipower Losses Mount

Energy bills held steady, company finances under pressure

Taiwan's government is seeking about NT$414.8 billion in budget support and new capital as rising energy costs strain CPC Corporation and Taipower, with officials warning that CPC's own funds can no longer cover planned construction needed for a stable natural gas supply.

The package combines NT$180.935 billion in supplementary spending for the two state energy companies and bottled gas support with a separate NT$233.834 billion capital increase for CPC. The Executive Yuan has asked lawmakers to complete their review and give final approval by the end of November 2026.

At an October 19 hearing of the Legislative Yuan's Economic Committee, Deputy Economic Affairs Minister Lai Chien-hsin said years of freezing or delaying fuel price increases had weakened the companies' ability to keep absorbing higher international costs. The continuing US-Iran war has added pressure to finances already affected by the COVID-19 pandemic and the Russia-Ukraine war.

CPC had absorbed NT$674 billion in oil and gas costs from 2020 through September 2026, according to the Ministry of Economic Affairs. Its accumulated losses reached NT$91 billion, more than half its capital, while its debt ratio exceeded 94 percent.

Taipower recorded a loss of NT$20.3 billion during the first eight months of 2026, taking accumulated losses to NT$371.2 billion. The immediate policy choice is how much of the energy price shock to cover through the public budget while keeping household and business bills from rising sharply. CPC also needs money for construction, making this a dispute about both today's prices and future gas supplies.

Where the proposed money would go

The Cabinet's detailed supplementary budget divides NT$180.935 billion among electricity, oil and natural gas, and bottled liquefied petroleum gas, or LPG. The proposed allocations are:

• NT$71.104 billion for Taipower to help cover costs absorbed while electricity prices were held steady.
• NT$101.431 billion for CPC to compensate for petrol, diesel and natural gas price increases that were not fully passed on after the US-Iran conflict.
• NT$8.4 billion for LPG support, comprising NT$8.38 billion for household price differences and NT$20 million for storage tanks.

The government's broader presentation groups roughly NT$109.8 billion under CPC related support. The detailed breakdown separates CPC's NT$101.431 billion allocation from the NT$8.4 billion for LPG. Together, those two amounts equal NT$109.831 billion.

CPC's proposed NT$233.834 billion capital increase sits outside that supplementary spending total. Adding the two measures produces a combined request of NT$414.769 billion, or about NT$414.8 billion.

The distinction matters for how the money would be used. The supplementary allocation compensates for costs already absorbed to restrain prices. The capital increase would strengthen CPC's financial position and help it pay for domestic natural gas infrastructure.

Why CPC says its own funds are insufficient

CPC has held back or delayed increases in oil and gas prices to support government efforts to contain living costs. Lai traced that policy burden to 2020, across several disruptions that pushed international energy prices higher.

The NT$674 billion in absorbed costs measures the cumulative price burden CPC says it carried over that period. Its NT$91 billion accumulated loss is the balance left on its accounts after revenues, expenses and other financial results are included. The two figures describe different parts of the company's financial position.

A debt ratio above 94 percent means liabilities account for more than 94 percent of CPC's assets, leaving only a small share financed by equity. The ministry projected that the ratio could reach 98 percent by the end of 2026.

CPC's shortage of internal funds now affects its ability to pay for natural gas supply projects, the ministry said. That connects the company's financial losses directly to construction spending: money used to absorb higher fuel costs is money unavailable for investment or other operating needs.

Taipower faces a sharp increase in gas costs

Taipower's natural gas fuel costs through August were more than NT$70 billion higher than before the US-Iran war, according to the ministry. Gas prices charged to electricity generation users had risen by more than 70 percent cumulatively since April.

The government held household gas prices steady while allowing increases for gas used in electricity generation. Taipower therefore faced higher costs for an essential fuel while its own electricity prices remained constrained.

Electricity rates were frozen in April and October, with the ministry saying the company absorbed more than NT$70 billion in costs across those decisions. At the second electricity tariff review of 2026, the calculation pointed to a 12.83 percent increase. The review instead supported seeking the proposed NT$71.104 billion subsidy first and deferred a pricing decision until December.

The 12.83 percent figure is therefore a calculated adjustment, with the actual tariff decision still pending. For households and businesses, December is the next stated point at which electricity pricing will be reconsidered.

Forecasts put Taipower's loss before tax for the full year at NT$73.275 billion and CPC's at NT$56.3 billion. Together, that is NT$129.575 billion. Those annual forecasts describe losses during 2026, while the much larger accumulated loss figures include results carried forward from earlier years.

Domestic gas projects are central to the capital request

CPC says the NT$233.834 billion capital increase would support domestic natural gas supply projects that have already passed environmental review. Named projects include the third phase of its Taichung plant and the Intercontinental LNG receiving terminal.

LNG means liquefied natural gas: gas cooled into liquid form so it can be transported by ship. Receiving facilities allow that fuel to be brought ashore and prepared for use. Funding those facilities supports the physical network needed to supply gas to customers.

Kuomintang legislator Lai Shih-bao challenged whether the capital increase was intended for investment in Alaska. Deputy Minister Lai responded that the domestic capital request and the Alaska proposal were separate matters. CPC also said its requested capital increase was unrelated to the Alaska LNG plan.

The deputy minister said any Alaska investment would follow commercial rules and include an ownership stake. The spending request before lawmakers is presented as funding for domestic projects that have completed environmental assessment, rather than financing for that overseas proposal.

Why the Cabinet wants an extra budget now

The Executive Yuan is using Article 79, Paragraph 3 of the Budget Act to seek the additional spending. That provision permits a supplementary budget when a major incident pushes the costs of government undertakings beyond the legally approved budget.

The ministry said international oil and gas prices were far above the assumptions used when the 2026 budget was prepared in August 2025. Waiting for the normal annual budget process would be too slow to address the companies' immediate financial pressure, it argued.

Legislative approval is still required before the proposed funds can be spent. The Cabinet's request for passage by the end of November is its preferred deadline; lawmakers must review the measures and complete three readings.

The main dates show how fuel price increases, company losses and budget decisions have converged:

• 2020 onward: CPC began absorbing costs across the pandemic and subsequent wars as it restrained oil and gas price increases.
• August 2025: The government prepared its original 2026 budget using energy price assumptions that officials say were later overtaken by events.
• April 2026 onward: Gas prices for electricity generation users rose cumulatively by more than 70 percent.
• August 2026: Taipower's loss for the first eight months reached NT$20.3 billion.
• September 2026: CPC's cumulative absorbed oil and gas costs reached NT$674 billion.
• October 19, 2026: The Economic Committee held its hearing on energy company losses and proposed Energy Administration Act amendments.
• End of November 2026: The Cabinet wants legislative approval completed.
• December 2026: Electricity pricing is scheduled for further consideration.

A proposed levy exemption offers smaller relief

Opposition lawmakers are also pursuing changes to the Energy Administration Act. Legislator Chen Yung-kang and others proposed adding a loss exemption provision to Article 5-1, allowing qualifying energy businesses to seek relief from contributions to the Energy Research and Development Fund.

Under the existing law, covered businesses, including integrated electricity utilities and petroleum refiners, contribute up to 0.5 percent of annual energy business revenue. The proposed exemption would require losses verified by an audit authority and approval from the Executive Yuan.

A levy based on revenue can remain payable even when a company loses money, because revenue measures sales before costs are deducted. Supporters of the amendment want to reduce that cash pressure during periods of large losses.

The ministry did not explicitly endorse the amendment at the hearing. Its stated priority was budget compensation and new capital to improve the companies' finances.

Research funding creates a competing concern

Chen Chung-shun, an associate researcher at the Chung-Hua Institution for Economic Research's Green Economy Research Center, warned that removing contributions could affect energy research. The fund receives about NT$4.6 billion a year, supporting work that research institutions depend on.

Chen questioned how much relief an exemption could provide against the scale of Taipower's losses. He cited an accumulated loss figure of about NT$377 billion, compared with the ministry's NT$371.2 billion through August, and said the annual fund was too small to close such a gap.

Using the ministry's NT$371.2 billion figure, the entire NT$4.6 billion annual fund amounts to about 1.2 percent of Taipower's accumulated losses. That comparison shows the difference in scale between the proposed levy relief and the financial support being sought through the budget.

The legislative debate therefore involves two different uses of money: retaining cash inside struggling energy companies and maintaining a fund for energy research. The proposed exemption would shift resources between those purposes, while the much larger supplementary budget would bring in public funding.

Businesses support relief but question who bears the cost

Business representatives backed budget compensation and CPC's capital increase at the hearing, according to CPC. They included Liu Shou-ren, secretary general of the General Chamber of Commerce; Lü Zheng-hua, secretary general of the Chinese National Federation of Industries; industrial district business representative Wei Ya-an; and tour bus industry representative Lu Hsiao-ya.

Wei said businesses were approaching their limit in absorbing the difference created when energy prices rose for companies while household prices were restrained. Her comments put the distribution of costs alongside the debate over the size of the support package.

Households benefit directly when gas and electricity bills are held steady. Companies also need predictable energy costs, but increases charged to industrial users can squeeze operating budgets. Public compensation moves part of that burden to the government budget.

CPC said it would continue efforts to increase income, reduce spending and improve operations. Lai warned that continued financial deterioration could leave the companies unable to keep cushioning customers from international price shocks. The proposed funding would give them more room to carry that role while CPC continues domestic construction, subject to legislative approval.

Key Points

• Taiwan is seeking NT$180.935 billion in supplementary energy support and NT$233.834 billion in new capital for CPC, a combined NT$414.769 billion.
• The spending package allocates NT$101.431 billion to CPC, NT$71.104 billion to Taipower and NT$8.4 billion to bottled gas support.
• CPC's accumulated losses reached NT$91 billion through September; Taipower's reached NT$371.2 billion through August.
• CPC says the capital increase would fund domestic gas infrastructure that has passed environmental review, separate from the Alaska LNG proposal.
• Lawmakers are considering a research fund levy exemption, while researchers warn about lost funding.
• The Cabinet wants budget approval by the end of November. Electricity pricing is due for reconsideration in December.