Press Release

Recently, there have been inquiries about the execution of the "Good Neighbor Compensation Plan" included in our company's "Fong Der Gas-fired Power Plant Construction Plan Environmental Impact Statement" (hereinafter referred to as the "Environmental Impact Statement"). In response, we would like to clarify the allocation and utilization of the compensation funds for the first phase of Fong Der Gas-fired Power Plant as follows:

I. Our "Environmental Impact Statement" was approved on September 2, 1999. According to Chapter 5, Section 5.5 of the Statement, our company agreed to allocate funds to the Development Power Resources Fund, contributing to local development. During the construction phase, the compensation amount was about NT$100 million; during the operational phase, ten thousandths of the electricity sales revenue, with an annual compensation amount estimated to be between NT$30 to 50 million. Regarding this, approximately NT$100 million has already been allocated during the construction phase. As for the operational phase, the spirit of the compensation is that the company will give back only when there are profits. Therefore, the company indeed bases the estimation on ten thousandths of the net business profit, roughly estimating the annual compensation amount to be between NT$30 to 50 million. (If the calculation is based solely on electricity sales revenue without deducting fees and costs, it is impossible to estimate between only NT$30 to 50 million.) In 1999, when the domestic electricity shortage was becoming severe, the government encouraged private sector participation in power plant construction with favorable policies. Hence, the net business profit was optimistically estimated, and the compensation was preliminarily set at about NT$30 to 50 million. However, the actual net profit after commercial operation was far less than expected. Nevertheless, the actual amount should still be based on the actual net profit of our company. Therefore, based on the ambiguity in the Good Neighbor Compensation Plan regarding whether operational costs and expenses should be deducted from electricity sales revenue, our company, "to define clearly and confirm the basis for calculating the compensation allocation," followed the intent of the letter from the central competent authority dated July 5, 2000. In accordance with the opinions of the former Tainan County Government before the reorganization, an explanatory meeting was held in the area of the power plant to clarify to the local residents. Our company held a public explanatory meeting on April 24, 2001, inviting representatives from the Tainan County Government and local township and city offices to attend. During the meeting, we detailed the method of providing feedback to the townships and villages, mentioning that the allocation of compensation during the operational period would be based on “post-commercial transfer electricity sales revenue minus relevant expenses.” We promised in the meeting record to communicate earnestly with local communities to ensure effective neighborly relations and feedback implementation, and subsequently submitted the meeting record to the Environmental Protection Administration of the Executive Yuan for reference.

II. The method, form, and calculation of neighborly compensation, as well as its distribution, are closely related to the local governments and residents of the counties, townships, and towns. Therefore, not only did our company clarify the basis for the calculation of compensation during the operational phase at the aforementioned public meeting, but we also continued to communicate the various feedback methods through letters to the local township offices in Tainan County in 2003. Specifically, regarding the calculation of compensation during the operational period, we emphasized again that it is based on “one percent of the net profit after deducting relevant expenses from electricity sales revenue.” Moreover, our company has provided various feedback measures. After several rounds of coordination and summarizing the opinions of the local township offices, our company proposed the final Good Neighbor Compensation Plan on March 7, 2003, and replied to the Tainan County Government, Shanshang Township Office, Xinshi Township Office, Xinhua Town Office, Zuozhen Township Office, and the representatives of each township and town. Our company further established the "Local Fund Donation Guidelines" as the basis for allocating compensation funds. Various townships and towns have applied for funds from our company before and after commercial operation, based on the aforementioned plan and the "Local Fund Donation Guidelines." The Good Neighbor Compensation Plan has been implemented for many years, gaining recognition from township offices and local residents. In addition to allocating compensation funds, our company also provides other neighborly measures, such as sponsoring talent cultivation programs in schools, community development association activities, temple prayer and cultural festivals, adopting air quality purification zones, sponsoring public restrooms, tree planting projects, providing caring meals to the elderly, sponsoring energy-saving and carbon reduction advocacy activities, community volunteer empowerment activities, civil defense observation activities, assisting local fruit farmers and marketing agricultural products, and sponsoring festive gatherings like the Mid-Autumn Festival and Lunar New Year, hoping to create local employment opportunities and promote local prosperity while the power plant commences operation. Over the years, our company has consistently fulfilled our promises to the local residents, never slackening, and thus gaining recognition from local governments and the public.

III. In addition to continuing to fulfill our commitment to feedback for local residents, for the construction of the second phase of the SUN BA Power Plant, we will also follow the regulations of the Electricity Act and the "Electricity Development Assistance Fund Use and Supervision Management Measures." Our company will establish a supervision and management team to appropriately allocate and use the “Electricity Development Fund”, aiming to enhance residents' physical and mental health, promote cultural activities and social welfare, implement grassroots infrastructure, and foster local development and employment, in line with our company's original intention of achieving good neighborly feedback.This year (2023), our company also received the Excellent Award for Safety and Health Performance from the Tainan City Government. These achievements not only represent the company's emphasis on operational safety but are also a testament to our continuous pursuit of excellence and our active contribution to the overall national economic development. These accomplishments clearly demonstrate our company's commitment to implementing various good neighbor measures, and we hope for recognition from all sectors.