Electricity rates to stay steady: Ho

There will be no hike in electricity fees during the peak summer season, and any rate adjustment will need to be passed by the Cabinet Minister of Economic Affairs Ho Mei-yueh (何美玥) said yesterday.

Ho made the remarks on the sidelines of a two-day National Energy Conference, which ended yesterday.

During the meeting, various officials and energy experts suggested the government increase electricity fees to reflect rising energy costs and curb power consumption.

"We will consider the issue thoroughly and take the public's ability to afford the hike into account," Ho said. "We will not implement any increase and burden consumers in the summer, when they are already paying higher electricity bills."

Ho had been considering raising fees for electricity and water after the Lunar New Year, but the plan was put on hold after Premier Frank Hsieh (謝長廷) took office in February.

At the time, Hsieh said that utility fees would be fixed at current rates to avoid increasing the inflation rate.

The consumer price index (CPI) last month rose 2.30 percent year-on-year and 0.21 percent month-on-month, seasonally adjusted, after gains of 1.61 percent and 0.15 percent in April, according to Directorate General of Budget, Accounting and Statistics. The agency on May 19 reiterated its forecast of 1.7 percent inflation for the year.

Over the longer term, however, electricity rates may rise significantly, doubling by 2025, because of higher fuel costs, the Ministry of Economic Affairs said in a statement yesterday.

The ministry said electricity fees may rise by as much as 99 percent over the next 20 years, and the increase could be even greater because of plans to expand the use of renewable energy sources, according to the statement.

The development and promotion of renewable energy are viewed as being much costlier than coal, the ministry said.

According to a proposal by the state-run Taiwan Power Co (台電), the nation's sole electricity distributor, electricity fees should be lifted by 10 percent to 15 percent per kilowatt-hour, with another increase of 1 percent to 3 percent should fuel prices rise further.

With crude oil prices edging US$60 per barrel, Ho said that as long as the price remains under that benchmark, state-run Chinese Petroleum Corp (CPC, 中油) would maintain wholesale gasoline prices at the current rates, as it had promised previously.

Kuo Chin-tsai (郭進財), chairman of the CPC, who also attended the conference yesterday, acknowledged that the price surge has raised costs for the company, but said it will stick to its promise to refrain from any hike unless crude oil prices push past US$60 per barrel.

Currently, CPC imports about 123 million barrels of crude oil every year, meaning that for every US$1 increase in the price of oil, the company needs to spend US$200 million more, Kuo said.

Even if the price reaches US$60 a barrel, CPC will judge the length of time it stays at that level before deciding whether or not to hike wholesale gasoline prices, he said.