The Consumers' Foundation (
"Since the risk of summer power shortages has been resolved, its unnecessary for Taipower to charge higher utility prices in summer anymore," said Cheng Jen-hung (程仁宏), secretary-general of the foundation.
Since the summer of 1989, Taipower began hiking rates by 10 percent and 27 percent -- depending on how much a user consumes each month.
The rate hike starts June 1 and ends Sept. 30.
Based on the current price scale, a household that uses a total of 430 kilowatt-hours per month in summer would see a NT$380 jump or a 35 percent electricity bill increase to NT$1,166 per month.
Consumers that consume below 110 kilowatt-hours per month would see prices jump by 10 percent to NT$2.2 per kilowatt hour.
Those using between 110 kilowatt-hours and 330 kilowatt-hours per month would see a 17 percent price hike to NT$2.7 per kilowatt hour. Any usage higher than 330 kilowatt-hours per month will be subject to the 27 percent price hike or NT$3.3 per kilowatt-hour.
One executive at the power company said the practice is imposed in line with the spike in demand for power during the hot summer months.
"In a bid to encourage the public to conserve energy and to cover the cost of expanding the nation's power supply system, we decided to raise prices in summer," said Fang Chun-Te (方俊德), a Taipower director.
According to company statistics, demand for electricity grew significantly between 1991 and 2000, paralleling the nation's strong economic growth and rising an average 6.6 percent per year. Growth in demand then slowed to 3.5 percent in 2001. Ever since that time the risk of power shortages during the hot summer season was eliminated, Fang said.
The foundation suggested Taipower cut prices during summer off-peak hours, or between 9:30pm and 7:30am.
"For most households, electricity use is steady during the night, and therefore the price cut would lower the financial burden on consumers," Cheng said.
Taipower agreed to discuss the possibility of charging lower rates for households at off-peak hours.
"We hope to conduct a study within one month and then make a proposal to the authorities," Fang said.
Any rate changes have to be sent to the Commission of National Corporations first and then approved by the Legislative Yuan.
According to Fang, Taipower sets prices based on the company's estimated sales.
Meanwhile, the practice of jacking up summer power prices irks one academic, who says state-run companies shouldn't set prices based only on profits.
"Taipower should take consumers' affordability as the first priority when setting prices," said Lu Yun (
Taipower's financial profile is weakening, according to Taiwan Ratings' latest review in April, mainly due to its lack of flexibility in increasing rates and capital expenditure, compounded by slowing revenue growth and rising operating costs.
Last year, the company's revenue grew 4 percent to some NT$322 billion.
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