Official ponders raising domestic electricity rates

The nation's top budget planner said it is considering raising electricity prices next year to make up for an expected government budget deficit, but economic affairs officials appeared to be reserved on such an idea.

Vice Minister of Economic Affairs Yin Chi-ming (尹啟明) said, "Changes to electricity pricing policy involves a lot of sectors, and it may need to be further examined as to its possible impact on industry, commodity prices and the government's financial status," a Chinese-language newspaper quoted Yin as saying yesterday.

Director General of Budget, Accounting & Statistics Lin Chuan (林全) said on Wednesday that the government is considering whether to ask Taiwan Power Co (Taipower, 台電) to raise the electricity rate by 5 percent next year to help cover the central government's budget deficit -- an estimated shortfall of "tens of billions of" New Taiwan dollars in its 2002 budget, while the central government still must allot an additional NT$16 billion for an annual allowance to senior citizens, the paper said.

But Yin denied rumors the government had already decided on raising electricity prices, saying that his ministry has not received any official instruction from the Executive Yuan nor has it been called on by the state-run Taipower to adjust the country's electricity pricing policy, the paper said.

Taipower hasn't raised electricity prices in 17 years due largely to the company's strong financial performance and staunch opposition to such a move in the legislature, which sets the company's profit and revenue targets for the year.

According to Taipower, as of May the company has recorded pretax losses of NT$850 million. In fact, Taipower reported pretax losses of NT$1.612 billion in April -- the first monthly pretax loss so far this year -- due to high fuel costs, increased factory closures and cooler temperatures.

"Based on the profit figures thus far, if we are not permitted to raise prices sometime before the year's end, we will not likely meet our pretax profit target of NT$26 billion for the year set by the legislature," the paper quoted a Taipower official as saying, without naming the official.

Yin, however, said that such a price-hike move won't come any time soon, as it will have to be discussed within the ministry and later by the Cabinet before being sent to the legislature for further review.