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Power rates set to
rise by up to 37%
PAY TO PLAY: Households that use between 500
kilowatt hours and 620 kilowatt hours per month will see their bills increase by
as much as 19%
By Crystal Hsu / Staff Reporter
The Ministry of Economic Affairs (MOEA) yesterday announced plans to raise
electricity rates on all sectors by between 8 and 37 percent to reflect soaring
energy costs and curb losses at state-run Taiwan Power Co (Taipower, ¥x¹q).
Starting on May 15, electricity prices will rise by an average of 17 percent for
households, 30 percent for commercial establishments and 35 percent for
industrial users, the ministry said in a report.
¡§No government in the world can maintain low electricity rates through subsidies
for long,¡¨ Minister of Economic Affairs Shih Yen-shiang (¬IÃC²») told a press
conference, one day after the ministry¡¦s advisory committee on electricity
prices failed to reach a conclusion on the issue.
Taipower would incur NT$10 billion (US$338.83 million) in losses a month if the
price adjustments were delayed, Shih said.
The state-owned firm has kept electricity prices unchanged since 2008 and
accumulated NT$132.2 billion in net losses as of the end of February, he said.
Currently, electricity costs an average of NT$2.82 per kilowatt hour, while
Taipower supplies it at NT$2.6 per kilowatt hour, he said.
Fuel and procurement outlays make up 70 percent of the company¡¦s expenditure,
while personnel costs account for 14 percent, Shih said, adding that he was
aware of criticism of overgenerous compensation packages for Taipower executives
and employees.
¡§The ministry has set up a task force to review the firm¡¦s salary and
procurement policies and all government offices are required to reduce
electricity consumption,¡¨ Shih said.
Continuing electricity subsidies is both unfair for light users and detrimental
to the development of energy conservation, he said.
The new rates are more fair, meaning heavier users incur the highest price
hikes, Energy Bureau Director-General Jerry Ou (¼Ú¹Å·ç) said.
Under the new rate scheme, electricity prices will stay flat for about 3.65
million households that consume 120 kilowatt hours or less a month, while rates
will rise 7.8 percent for 5.66 million households that consume between 120
kilowatt hours and 235 kilowatt hours, the report indicated. For households that
consume between 500 kilowatt hours and 620 kilowatt hours per month will see
their electricity bills increase by between 16 and 19 percent, the report said.
Electricity rates for households that consume 1,000 kilowatt hours or more a
month will rise by 24 percent or more. The progressive rates also apply to
commercial establishments, which will see their electricity bills increase by
between 16 percent and 33 percent a month depending on the energy they consume,
Ou said.
The manufacturing industry will bear the brunt with price rises ranging between
29 and 37 percent, because they are relatively heavy users, the energy official
said.
The price hikes are expected to raise overall production costs by 0.48 percent,
with electricity bills accounting for about 2.19 percent of the industrial
sector¡¦s spending, the report said.
New electicity prices will rise to 6.07 percent of production costs for mineral
product makers, from current 4.93 percent, while growing from 1.93 percent to
2.38 percent for electronics makers, the report said.
Electricity outlays will rise to 2.37 percent of production costs for flat-panel
makers, from the current 1.92 percent and up from 1.42 percent to 1.75 percent
for solar-energy suppliers, the report said.
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