Most homes spared in electricity hike plan

By John Liu ,The China Post

TAIPEI, Taiwan — The Ministry of Economic Affairs (MOEA) announced yesterday that on Oct. 1 electricity prices will increase by 7-10 percent for households using 1,001 kWh or more per month and by 0-8 percent for businesses using 1,501 kWh or more. In the MOEA’s revised pricing plan, there will be no rise for households using 500 kWh or less per month. Consequently, 85.7 percent of households will not be affected by the price changes.

With the new plan, households that use between 501 kWh and 700 kWh will have to pay an extra NT$47 to NT$94 per month, while households that use between 701 kWh and 1,000 kWh will pay extra NT$147 to NT$253, and households that use 1,001 kWh or more will pay an extra NT$253 or more. Price Scheme for Businesses

There will be no price hike for small businesses using 1,500 kWh or less. For businesses using 1,501 kWh or higher, there will be a hike of 0-8 percent, or about NT$358 more every month. The MOEA originally planned to raise the rates for these businesses by 7-11 percent. Only around 20 percent of small businesses are expected to be affected. For medium- and large-sized businesses, rates will rise by 10.4-12.2 percent, which is less than the originally planned 11.6-13.6 percent. Government’s Three-phase Price Hike The Cabinet announced last year that electricity rates would be increased in three phases.

Prices were increased by 40 percent on June 10, 2012 as the first phase. The second phase of another 40-percent increase was scheduled to be implemented on Dec. 10, 2012 but was postponed to Oct. 1 this year. The timing of the third phase — a 20-percent hike — will be determined based on the performance of Taiwan Power Co. The government is raising the rates to help the state-run Taipower cope with losses caused by unrealistically low rates that do not reflect operating costs, officials said. Taipower suffered NT$35.2 billion in losses in the first seven months of this year, bringing its cumulative losses to NT$228.8 billion. Reasons for the Revision The second phase of the price hike was modified in an effort to encourage energy conservation, to adhere to the principle of “payment based on usage,” to reduce the public’s burden and to take care of the disadvantaged, said MOEA Deputy Minister Tu Tzu-chun (杜紫軍).

He added that there is no plan to change the makeup of the third phase. President Ma Ying-jeou said yesterday that while the aim of the new scheme is to rationalize utility prices, the government should make sure that the disadvantaged are also taken care of. He also said that tax revenue should never be utilized to reimburse big businesses. The new plan should respect the principle that users pay only for the electricity that they use, Ma said, adding that Taipower must also produce improved results in order to win support from the public.