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Business group suggests electricity rates should be hiked in stages

2012/04/25 19:31:12

Taipei, April 25 (CNA) A business leader suggested Wednesday that electricity rates should be raised in stages to lessen the burden on the public and allow businesses time to adapt.

Kenneth Lo Chin-ming, chairman of the Chinese National Association of Industry and Commerce, made the suggestion while meeting with Premier Sean Chen over a working breakfast in Taipei.

"At a time when the economic outlook is not yet clear, electricity rates should be adjusted upward in stages to allow the public time to acclimatize," Lo said.

The Ministry of Economic Affairs (MOEA) announced recently that household electricity rates will increase by an average of 16.9 percent with effect from May 15.

Commercial electricity rates will rise 30 perent, while industrial rates will increase by 35 percent, the ministry said.

Lo noted that Taiwan, which is in a state of transformation, has to face a string of challenges ahead , including financial uncertainty due to the European debt crisis, the sluggish economy, and an investment environment that needs to be improved.

He also used the occasion to express hope that the Executive Yuan will continue to solicit views from all sides on a proposed stockgains tax, which he said has had a widespread effect and has resulted in panic in the stock market.

At a post-meeting news conference, Yiin Chii-ming, chairman of the Council for Economic Planning and Development, elaborated on Chen's remarks.

Yiin cited the premier as saying that the time for reasonable electricity rates has come and that it is impossible to go back to the cheap rates of the past.

He also cited Chen as saying that electricity rates for Taiwanese households are the second-lowest in the world, while the rates for industry are fourth-lowest. After the adjustment, the rates in Taiwan will be higher than those of South Korea.

Chen has therefore instructed the MOEA to provide counseling to sectors that are competing with their South Korean counterparts.

The MOEA will also raise a fund of NT$100 billion (US$3.39 billion)to provide loans to industry, allowing companies to buy equipment thatconserves energy and cuts carbon emissions.

Yiin also cited Douglas Hsu, chairman of Far Eastern Group, as suggesting that electricity rates for off-peak periods be lowered and that non-profit institutions such as schools and medical institutions could have rate concessions.

The premier has asked the MOEA to carefully consider Hsu's suggestions, according to Yiin.

In a related development that same day, opposition legislators demandedthat CPC Corp. Taiwan and Taiwan Power Company (Taipower) put on hold any further hike in fuel prices and electricity rates or they will boycott the proposed budgets for the two state-run companies.

Legislator Hsu Chung-hsin of Taiwan Solidarity Union (TSU) said the hikes have resulted in price increases in domestic raw materials and many daily necessities and have triggered widespread complaints.

Hsu said that if the two companies do not put a hold on the hikes, the TSU will join hands with the main opposition Democratic Progressive Party to propose freezing the budgets of the two companies and demand that they submit a report on improving their internal operations.

Hsu Yao-chang, a caucus whip of the ruling Kuomintang, urged the opposition parties to monitor the government in a rational way and to refrain from imposing any ill-intentioned boycotts.

(By Eva Feng, Yang Chia-ning, Ho Meng-kuei and Lilian Wu)