COST OF LIVING/Ministry to decide on electricity pricing amid speculation over rate hike

Taipei, June 22 (CNA) The Ministry of Economic Affairs (MOEA) will review the country's electricity pricing policy on June 27, amid speculation that the current rate, which has remained unchanged for four years, could be raised by 8 percent for heavy users.

According to Chinese-language newspaper Liberty Times on Wednesday, the current average rate of NT$2.6253 (US$0.093) per kilowatt-hour will be increased by 8 percent for business and households that use more than 1,000 kWh a month.

The semiannual review of electricity rates, which was postponed from March 29 due to volatile global fuel prices caused by Russia's invasion of Ukraine, and fears over inflation, is unlikely to impact regular households, which generally do not consume more than 500 kWh a month, the newspaper said.

The 8 percent spike will break the 3 percent cap generally allowed for rate increases, but is considered necessary because state-run Taiwan Power Co. (Taipower) and its natural gas provider CPC Corporation are both expected to make losses in excess of NT$100 billion this year, Liberty Times said, citing a source.

In response to the report, the MOEA said it will listen to the advice of experts participating in the review before making a decision.

The ministry's reviews of electricity pricing, held in March and September, have not raised rates since a 3 percent hike was introduced in April 2018, amid rising global energy prices.

On March 29 this year, the ministry announced that pricing increases would be delayed because incorporating high fuel prices into the government's formula for the pricing of electricity would lead to a hike in energy prices, causing already rising consumer prices in Taiwan to spike further.

Responding to Wednesday's development, Lin Por-fong (林伯豐), chairman of Taiwan's Chinese National Association of Industry and Commerce, said any price hike targeting heavy users would be unfair.

Unlike a universal rate hike, which would be a reflection of cost, a pricing adjustment that only targets heavy users is simply punishing local industries, Lin said.

Such discrimination will absolutely lead to the relocation of Taiwanese manufacturers overseas, he added.

On the other hand, environmental groups on Wednesday issued a joint statement supporting a "reasonable increase" in the electricity rate as it will help Taiwan achieve its target of zero carbon emissions by 2050.

However, the hike should target industrial sectors and heavy users because they are the main users of electricity, according to environmental groups such as the Green Citizens' Action Alliance and Citizen of the Earth, Taiwan.

The groups also urged the government to introduce more effective policies to promote energy saving by industry and help disadvantaged groups upgrade their home appliances to reduce unnecessary energy use.