National electricity rates are likely to decline due to the falling cost of international crude oil which has lowered Taiwan Power Co’s (Taipower, 台電) power generation costs, the Ministry of Economic Affairs said yesterday.
“The average oil price — about US$51 per barrel in October last year — has dropped to US$40, hence there is room for Taipower to cut electricity rates,” Bureau of Energy Director-General Lin Chuan-neng (林全能) told a news conference.
Lin said the scale of the rate cuts would be decided by an electricity pricing review committee on March 15, with the new rates taking effect on April 1 and running through October.
The current average rate is NT$2.8852 per kilowatt-hour (kWh), Taipower data showed.
Due to declining fuel costs, Taipower’s net profit reached NT$61.8 billion (US$1.86 billion) last year, exceeding the electricity pricing formula’s “reasonable profit” by NT$34 billion, Lin said.
The electricity rates review committee has been discussing how Taipower should utilize the NT$34 billion, Lin said.
The committee might request the state-run utility share the NT$34 billion with the public by refunding households, Lin said.
However, some members propose setting up a special account which would allow Taipower to absorb future rises in power generation costs without resorting to raising electricity rates, Lin said.
Other members argue that Taipower should invest the money in improving the quality of its power supply, he said.
A final decision regarding the issue is to be made by March 15, he added.
Meanwhile, the ministry plans to propose a revised electricity pricing formula to the legislature in the second half of this year, Lin said.
“The ministry still plans to adjust electricity rates every six months, but hopes to add more factors into the pricing scheme to better reflect Taipower’s cost structure,” he said.
That is because the current pricing scheme excludes Taipower’s non-operational costs from its cost structure, which Lin said is not fair to the company.
As Taipower’s price increase is capped at 3 percent every six months, or 6 percent on an annual basis, Lin said it is also not reasonable that there is no limit to rate drops under the current scheme.
Hong Kong authorities ramped up sales of the local dollar as the greenback’s slide threatened the foreign-exchange peg. The Hong Kong Monetary Authority (HKMA) sold a record HK$60.5 billion (US$7.8 billion) of the city’s currency, according to an alert sent on its Bloomberg page yesterday in Asia, after it tested the upper end of its trading band. That added to the HK$56.1 billion of sales versus the greenback since Friday. The rapid intervention signals efforts from the city’s authorities to limit the local currency’s moves within its HK$7.75 to HK$7.85 per US dollar trading band. Heavy sales of the local dollar by
Taiwan Semiconductor Manufacturing Co’s (TSMC, 台積電) revenue jumped 48 percent last month, underscoring how electronics firms scrambled to acquire essential components before global tariffs took effect. The main chipmaker for Apple Inc and Nvidia Corp reported monthly sales of NT$349.6 billion (US$11.6 billion). That compares with the average analysts’ estimate for a 38 percent rise in second-quarter revenue. US President Donald Trump’s trade war is prompting economists to retool GDP forecasts worldwide, casting doubt over the outlook for everything from iPhone demand to computing and datacenter construction. However, TSMC — a barometer for global tech spending given its central role in the
The Financial Supervisory Commission (FSC) yesterday met with some of the nation’s largest insurance companies as a skyrocketing New Taiwan dollar piles pressure on their hundreds of billions of dollars in US bond investments. The commission has asked some life insurance firms, among the biggest Asian holders of US debt, to discuss how the rapidly strengthening NT dollar has impacted their operations, people familiar with the matter said. The meeting took place as the NT dollar jumped as much as 5 percent yesterday, its biggest intraday gain in more than three decades. The local currency surged as exporters rushed to
PRESSURE EXPECTED: The appreciation of the NT dollar reflected expectations that Washington would press Taiwan to boost its currency against the US dollar, dealers said Taiwan’s export-oriented semiconductor and auto part manufacturers are expecting their margins to be affected by large foreign exchange losses as the New Taiwan dollar continued to appreciate sharply against the US dollar yesterday. Among major semiconductor manufacturers, ASE Technology Holding Co (日月光), the world’s largest integrated circuit (IC) packaging and testing services provider, said that whenever the NT dollar rises NT$1 against the greenback, its gross margin is cut by about 1.5 percent. The NT dollar traded as strong as NT$29.59 per US dollar before trimming gains to close NT$0.919, or 2.96 percent, higher at NT$30.145 yesterday in Taipei trading
RSS