According to The Electricity Act article 60, electricity prices shall be set at a level commensurate with the necessary cost plus a reasonable profit. And said reasonable profit shall be calculated on the basis of the present value of the replacement cost for the fixed assets in effective use and the amount of working capital, and shall take into account the local practices of margin setting. Also according to the formula that announced by The Ministry of Economic Affairs on December 10, 2015:
Wholesale purchase rate
= (The beginning costs of set-up * Capital reduction factor
+ Annual operation and maintenance costs) / Annual electricity sales
Capital reduction factor = (average cost of capital * (1 + average cost of capital)] ^ wholesale purchase period) / (((1+ average cost of capital rate) ^ wholesale purchase period) -1)
Annual operating and maintenance costs = The beginning costs of set-up * Annual operating and maintenance costs / The beginning costs of set-up
The Ministry of Economic Affairs set the Wholesale Purchase Rates for land application wind power turbines plants that are under 20kws at 8.5098 NTDs per kWh in 2016.