Industrial, electricity rates to be hiked by 10%

This article was published by the Taiwan Headlines on April 27, 2006. It reports that the Ministry of Economic Affairs is planning to publicize a program for electricity-rate hikes in mid-May 2006. According to the program, household-electricity rates will remain unchanged or rise modestly, but rates for industrial or commercial electricity will increase over 10 percent.

The program aims to reflect changes in the costs of fuel oil. If necessary, the government will also lower the legal earnings target of the state-run Taiwan Power Co. Ltd. (Taipower), in order to alleviate the pressure on the company for electricity-rate hikes.

Meanwhile, the government has decided to raise electricity rates and will publicize the scales of electricity-rate hikes soon. In general, the government will abide by three principles for electricity-hikes - care for common citizens and small businesses, provision of sufficient adjustment time for enterprises, and enhancement of performance of Taipower.

Due to consideration of energy conservation and industrial upgrading, differences between industrial or commercial electricity rates at different utilization times will be expanded. Rates at peak hours will rise considerably, while rates at off hours will only increase modestly. The average scale of hikes will be about 10 percent.

Currently, household electricity rates average NT$2.4 per kilowatt/hour, while industrial and commercial electricity rates average NT$1.7. Household electricity consumption now accounts for 30 percent of the total in Taiwan, compared with 70 percent for industrial and commercial electricity.

After the program is announced in May, it will take effect from June 2006, allowing a two-week grace period for local businesses.