Fri, Dec 19, 2014 - Page 13 News List

Electricity refund plan due this month

GAS PRICES:CPC president Paul Chen said that the firm plans to cut the wholesale price of household gas cylinders next month due to the drop in international oil prices

By Lauly Li  /  Staff reporter

Minister of Economic Affairs John Deng, right, holds a placard detailing the new power rate formula as Taiwan Power Co chairman Hwang Jung-chiou looks on at a meeting of the Economics Committee at the Legislative Yuan in Taipei yesterday.

Photo: CNA

The Ministry of Economic Affairs yesterday said it would announce an electricity rate refund plan before the end of this month to share Taiwan Power Co’s (Taipower, 台電) NT$9 billion (US$287 million) profit with the public in the first electricity bills next year.

“The profits saved from the decline in global oil prices will be returned to about 12 million households, including small shops, across the nation,” Minister of Economic Affairs John Deng (鄧振中) said on the sidelines of a meeting of the Economics Committee at the legislature in Taipei.

Deng said every household would receive a refund of between NT$750 and NT$800 in the first bills, regardless of its electricity usage.

Industrial users are not included in the refund scheme, he said.

Deng previously insisted that the refund scheme would only be carried out once a new power rate formula has been approved by the legislature.

However, his stance changed after Premier Mao Chi-kuo (毛治國) last week said the two issues could be handled separately.

The Economics Committee yesterday made a non-binding resolution to hold a public hearing over the pricing formula on Thursday next week, with Deng saying he agrees with a proposal by lawmakers to invite domestic experts to discuss the formula.

Deng also said he would follow a suggestion by lawmakers to remove the “reconstruction cost” from the formula.

Given that Taipower has an accumulated debt of NT$208.4 billion, when the utility proposed the new pricing formula last year, it added reconstruction costs into the formula in an attempt to repay the debt.

Lawmakers, including Chinese Nationalist Party (KMT) legislators Ting Shou-chung (丁守中) and Huang Chao-shun (黃昭順), said that it was unreasonable for the state-owned utility to include reconstruction cost in the formula, because the formula already contains a “reasonable profit” that Taipower estimates it can earn for the year.

“Taipower should not ‘double-charge’ the public,” Huang said, adding that the utility can slowly make up its accumulated losses through improved management and other operational adjustments.

Deng responded by saying: “I think the lawmakers’ opinions are accurate. The ministry will remove the reconstruction cost item from the formula.”

Taipower chairman Hwang Jung-chiou (黃重球), who also attended the meeting, said the utility would repay its debt by earmarking a certain amount of its annual earnings in accordance with the Company Act (公司法).

The ministry intends to adjust electricity rates once every six months to reflect power generation costs after the formula is approved by the legislature, Deng said.

Separately, CPC Corp, Taiwan (CPC, 台灣中油) president Paul Chen (陳綠蔚) said CPC plans to cut NT$60 from its wholesale price for a 20kg household gas cylinder next month because of the decline in international oil prices.

However, retail prices will be subject to gas distributors’ pricing decisions, he said.

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