Taiwan’s electricity pricing model is to be reviewed and appropriate rate adjustments made with a view to increasing carbon reductions and ensuring the public well-being, according to the Ministry of Economic Affairs April 9.
Plans submitted by state-owned Taiwan Power call for 67 per cent of the island’s households to experience a maximum increase of 10 per cent, or NT$87 (US$3) on average. Those consuming more than 700 kilowatt hours per month will have to pay at least 21 per cent more.
The adjustments are necessary as international prices for coal, natural gas and crude oil have surged 31.6 per cent, 88 per cent and 54 per cent, respectively, over the past three years.
The latest statistics released by the US Department of Energy reveal that Taiwan’s electricity rates for households and industrial users are the second and fourth lowest in the world.
“These rates run counter to ROC government policy goals of promoting energy saving and developing energy-efficient industries,” an official from the MOEA Bureau of Energy said.
“Cheap electricity is also responsible for Taipower suffering losses exceeding NT$118 billion last year. If no action is taken, the utility’s pre-tax losses will hit NT$100 billion in 2012.”
Taipower’s proposed rate increase is to be reviewed at an advisory committee meeting April 11 chaired by deputy economic minister Hwang Jung-chiou. Comprising business leaders, consumer group representatives, energy experts and government officials, the 21-member committee will go over the company’s plans with a fine-tooth comb.
The meeting is part of a previously initiated program aimed at reviewing operations of Taipower and state-owned oil refiner CPC Corp.
“The two utilities’ key performance indexes will be put under the microscope,” the official said. “Cost controls, personnel expenses and procurement practices are to be looked at with the goal of boosting operational efficiency.”
