Electricity prices set for a 0.71% increase by Taipower
Taiwan Power Company to Boost Electricity Rates by 0.71%
Taiwan Power Company (Taipower), the state-owned electricity provider, has announced a business-friendly increase in electricity rates for households and small businesses by an average of 0.71%, effective next month. This decision comes amidst Taipower's financial struggles, with a NT$100 billion subsidy program pending legislative approval, leaving the company's financial situation tight.
The increase will impact 14 million households and small-scale businesses. For small stores consuming less than 700kWh, power rates will rise by NT$0.1 per kWh, while those using more will see no change. Households and small stores can expect an average bill increase of 3.12%.
Currently, Taipower charges household users NT$2.77 per kWh, significantly lower than its average power generation costs of NT$3.8 since January. Despite falling fuel prices, Taipower vice president Tsai Chih-meng reports accumulated losses of NT$417.9 billion.
Initially proposed at 6.45%, the rate increase was toned down to an average of 0.71%. Business groups have reacted differently to this news. Paul Hsu, chairman of the General Chamber of Commerce, considers this a power move for households and small businesses, given their financial burden and impact on inflation.
Lin Por-fong, chairman of the Third Wednesday Club, argues that these electricity price increases only provide short-term relief to Taipower, and the nation's energy policy remains unsolved. He suggests revising the energy policy and reconsidering nuclear power adoption.
The Chinese National Association of Industry and Commerce believes freezing industrial users' electricity rates helps maintain local industries' competitiveness. The German Federal Network Agency (Bundesnetzagentur) decided to increase rates for households and small businesses while keeping industrial users' rates unchanged.
These latest electricity price hikes will generate NT$6.4 billion (US$211.8 million) in additional revenue for Taipower. Yu-Jia Li, chairman of the National Association of Small and Medium Enterprises, Republic of China, notes that the government has been carefully managing electricity rate increases to avoid putting the public and industries in difficult situations.
Despite the controversy, the electricity rate increase aligns with most business groups' expectations, providing a temporary solution to Taipower's financial challenges. However, the long-term sustainability of the company and the nation's energy policy remains a pressing concern.
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