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Government mulling postponement of electricity hike (update)

2012/09/17 12:41:20

Taipei, Sept. 17 (CNA) Economics Minister Shih Yen-shiang said Monday that the government is considering postponing a second-stage electricity rate increase, scheduled for December, because of worse-than-expected global economic conditions.

Due to the lingering European debt crisis and the United States Federal Reserve's launch of a third round of quantitative easing, the government is inclined to postpone the electricity rate hike to minimize the impact on the Taiwan people, he said.

However, the government needs more time to assess various opinions on the issue and will make an official announcement later, Shih said at a press briefing.

"The overall economic conditions are not very good. Under these circumstances, the government should be sensitive to people's pain rather than focusing only on the stability of the country's power supply," Shih said.

The government's intention to increase power rates remains unchanged and it is also planning ways of improving the financial structure of the state-owned Taiwan Power Co. (Taipower), he said.

Taipower had said it was anticipating losses into next year, after the government in early May introduced a three-stage electricity rate hike instead of a one-step increase.

Taipower estimated that it would lose NT$72.2 billion (US$2.47 billion) this year, which would push its accumulated losses to NT$190.1 billion by the end of 2012.

Under the government's electricity cost hike plan, rates for household, commercial and industrial power users were to have gone up by an average of 16.9 percent, 30 percent and 35 percent, respectively, on May 15.

But amid criticism, it was changed to a three-stage hike, with the first 40 percent of the increase to be implemented June 10, the next 40 percent Dec. 10, and the remaining 20 percent to be decided after the company streamlines its operations to the government's satisfaction.

(By Jeffrey Wu)