Lawmakers urge halt to Oct. 1 power rate hike
The China Post news staffTAIPEI, Taiwan -- Members of the Economics and Energy Committee of the Legislative Yuan yesterday called for the government to halt the Oct. 1 electricity rate hike plan, so as not to worsen the already sluggish domestic economy.
August 25, 2013, 12:03 am TWN
The Ministry of Economic Affairs (MOEA) is implementing a three-phase electricity rate hike plan, with the first stage that took effect in June 2012 accounting for 40 percent of the total planned increase. The second phase, set to take effect on Oct. 1, will involve raising average electricity prices by 9.64 percent, industrial electricity prices by 11.49 percent, commercial usage rates by 10.04 percent and household prices by 4.57 percent, according to the MOEA.
Under the plan, it was estimated that about two-thirds of households and one-third of small businesses that use less than 330 kwh of electricity per month would not be affected by the price hike.
In response, lawmaker Huang Chao-shun of the ruling Kuomintang (KMT), convener of the Economics and Energy Committee, said that given the nation's poor economic performance, the government shouldn't implement the second-phase electricity rate hike plan on Oct. 1 as scheduled, as the majority of citizens won't accept it.
Huang said her legislative committee resolved earlier to temporarily suspend the Oct. 1 power rate hike plan, but the executive sector is still determined to enforce the plan regardless of the resolution.
Huang continued that she would reiterate her opposition to the plan at a coordination meeting to be organized by the KMT's Central Policy Committee on Aug. 28-29, when Vice Premier Mao Chih-kuo, Economic Minister Chang Jia-chu, Chairman Hwang Jung-chiou of Taiwan Power Company and lawmakers of the ruling party will exchange views on the rationalization of electricity rates.
Meanwhile, lawmaker Huang Wei-che of the opposition Democratic Progressive Party (DPP), who is also a member of the Economics and Energy Committee, said that the government decided last year to carry out the second-phase power rate hike in October this year mainly based on the assumption that Taiwan's economy would improve this year.
But the reality is, Huang continued, the Directorate-General of Budget, Accounting and Statistics has reduced its forecast for the nation's economic growth to only 2.31 percent from an initial projection of well over 4 percent. Accordingly, if the power rates are hiked as planned on Oct. 1, then it's virtually “adding hail to snow,” according to Huang.
In addition, lawmaker Lawrence Kao, the DPP's legislative whip, also stressed that the legislative caucus of the party will maintain its established stance that domestic power rates shouldn't be raised in the next five to 10 years.
If the second-phase power rate hike plan is tabled, the state-run Taiwan Power Company (Taipower) will see its operating losses surge further.
Taipower statistics showed that as of the end of 2012, its accumulated operating losses already amounted to NT$193.1 billion, and the figure would surge further to NT$228.4 billion after taking into account the deficit of NT$35.3 billion recorded in the first seven months of this year.
If the second-phase hike is suspended, then Taipower would see an additional operating loss of NT$15.7 billion in the remaining months of the year, and an annual loss of NT$60 billion is likely to occur in 2014.
Accordingly, it's no wonder that Premier Jiang Yi-huah said in a recent interview on UDN TV that a reasonable increase in electricity rates should be implemented since the state-run Taipower has so far kept rates at a relatively low level that does not reflect its costs.
Scholars also worried that if the power rates fail to be raised to reflect costs, domestic commodity price stability would eventually be undermined.