Electricity, water rates slated to rise

Battered by soaring fuel costs, state-run Taiwan Power Co (Taipower, 台電) plans to raise electricity rates as early as next year, a company official said yesterday. Rates have been fixed for the past 20 years.

Taipower president Edward Chen (陳貴明) told reporters yesterday that the company will submit a rate-hike proposal soon, as surging costs have weighed heavily on the company.

For the first time in history, the nation is expected to see red ink in its financial report this year. For the first seven months of the year, Taipower posted a pre-tax loss of NT$2.06 billion.

A Chinese-language newspaper yesterday speculated that the rate hikes could range between 10 percent and 15 percent. Chen refused to comment on that speculation, or reveal the specific date the new rates may take effect.

The prices of imported coal have surged from US$25 per tonne last year to US$60 per tonne in recent days, said Lee Chuan-lai (李傳來), a Taipower public relations official.

Lee said the company estimated in June that with adjustment in electricity fees, the company will report a loss of NT$9 billion next year. Therefore the price hike is necessary to maintain the keep the company in business.

Besides electricity bill hikes, consumers are also likely to pay more on their water bills. The water fees have been kept almost at the same level for 10 years. Joses Wu (吳約西), secretary general of the Water Resources Agency under the Ministry of Economic Affairs, said the Taiwan Water Supply Corp (台灣自來水) is drafting a rate hike proposal and may soon submit it to a reviewing committee under the ministry.

Huang Ching-szu (黃慶四), vice president of Taiwan Water, refused to unveil details of the proposal. But the company must raise rates to reflect cost increases over the past 10 years, Wu said.

The company could use part of the fee increase to improve water quality and repair old and damaged pipelines that leak 20 percent to 25 percent of water supply, he added.

The water company saw losses of NT$286 million last month because of a rise in raw materials costs. The company reported NT$60 million in net losses in the January-July period.

Overall, Taiwan Water incurred debts of NT$50 billion to NT$60 billion, Wu said.

While the hikes in oil prices and commodity prices have touched off fears of stagflation, Cabinet Spokesman Chen Chi-mei (陳其邁), citing recent economic statistics, said yesterday that the nation's economy is stable and will keep growing.