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United Daily News: Structural change must follow price hikes

2012/04/15 18:24:49

Following a 10-percent hike in fuel prices, the country will face higher electricity rates beginning next month. Taiwan's super-low water price is another area where the government may raise the price of an essential commodity in people's lives.

People may accept, reluctantly, that their utility bills must go up. But they will also demand to know if the price surges will cure the past ills of unreasonably low prices and unfairness.

Taiwan is an energy-importing country that must adapt to an international petroleum market in which the government is forced to yield its autonomy over pricing.

Soaring crude oil prices should be forcing the government, for example, to levy an "automobile fuel surcharge" based on the actual consumption of individual car users in place of the current fuel tax assessed per car.

It is totally incomprehensible why the government could have delayed for so long a common sense policy based on the simple "user pays" principle and impossible for the government to ignore that principle indefinitely even if it wants to be "considerate" of public transportation operators.

Another example of how the government can improve on its energy policy is to put through exemptions or reductions of excise taxes on energy-saving vehicles -- a policy that has been in effect in Europe for many years with obvious positive effects.

We cannot comprehend why the government has not been able to make any breakthrough in this area.

Taiwan Power Co. (Taipower), Taiwan's sole supplier of electricity, needs to pursue some structural reforms of its "single power supply grid" which covers the generation, transportation, distribution and sale of electricity.

How will Taipower modernize its power transmission system covering long distances between southern and northern Taiwan? How can it keep ignoring the unreasonable law that requires it to purchase alternative energy at higher-than-cost prices for resale at low prices, leaving ordinary power users to share the financial burden of covering the losses?

It may not be easy to immediately push ahead some of the structural reforms. But one thing it can immediately push ahead on -- and see good returns -- is to encourage power-saving practices.

Germany has been doing this for 10 years after legislating an energy saving law that gives incentives and subsidies to household and industrial users, resulting in a 30 percent reduction in total energy consumption.

So Taiwan cannot simply keep talking about energy-saving measures without taking any action.

We support a rationalization of public utility charges that take into account people's livelihoods and industrial competitiveness. But rationalizing utility bills will not be accomplished simply by raising rates.

What is even more important is to face up to previous mistakes and take resolute actions to "honestly reform" the structural problems in our public utilities system.

Raising fuel, power and water bills will force the people to adjust their ways of life. The government should in the meantime take up the responsibility of reform. (Editorial abstract -- April 15, 2012)

(By S.C. Chang)
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