State-run Taiwan Power Co (Taipower, 台電) is expected to report a loss of NT$72.2 billion this year after the new policy on electricity prices is implemented, Minister of Economic Affairs Shih Yen-shiang (施顏祥) said yesterday.
Originally, Taipower estimated that losses would reach NT$15.2 billion this year if prices were to be increased in the middle of this month.
On Tuesday, President Ma Ying-jeou (馬英九) announced a three-phase plan to raise prices, with the first and second price increases taking effect on June 10 and Dec. 10, reflecting 80 percent of the original price increase.
“We decided to adjust the plan considering the latest weaker-than-expected economic conditions and the public backlash,” Shih told reporters after a question-and-answer session at the legislature.
The first and second phases of the new plan will raise overall residential electricity prices by no more than 9 percent, the ministry said in a statement yesterday.
Industrial users would see their electricity bill go up by up to 27 percent, according to the ministry.
Shih said no timetable had been set for the third-stage price increase — the remaining 20 percent — but that sooner or later, Taiwanese have to face the reality that it is inevitable they will have to pay more for high quality, clean energy.
Taipower will suffer another loss of NT$26.9 billion next year because of the new scheme, initial estimates showed.
The company may need a reform plan to save NT$20 billion to NT$30 billion in costs a year for the third phase not to be required, Shih said.
With losses of NT$117.9 billion as of last year, the company’s accumulated loss is expected to total NT$217 billion by next year, accounting for more than 60 percent of the company’s capital, statistics showed.
However, the government’s new plan still did not satisfy lawmakers on the legislature’s Economics Committee.
Democratic Progressive Party (DPP) Legislator Huang Wei-che (黃偉哲) said even if the new plan does not affect households and small businesses with electricity usage under 330 kilowatt-hours per month, it was still impossible for them to escape rising prices of consumer goods.
Shih said the revised plan would have less of an impact on both the consumer price index and GDP.
The Directorate-General of Budget, Accounting and Statistics has said fuel and electricity price increases will reduce the nation’s GDP by 0.34 percentage points this year and raise inflation to 1.94 percent.