The authorities have expressed a preference for electricity rates to be adjusted once a year rather than once every three months, to prevent fluctuations in the commodity price index, Taiwan Power Co (Taipower, 台電) chairman Hwang Jung-chiou (黃重球) said yesterday.
The annual adjustment proposal is likely to be adopted, Hwang said.
Moreover, the adjustment scale for household electricity prices and that of prices for industry-use electricity will be discussed separately, he said.
An electricity rate adjustment formula has been drafted, under which electricity rates will be adjusted based on changes in fuel costs, non-fuel costs and “reasonable profits,” Hwang said.
While fuel costs are the key factor affecting electricity prices, a ceiling will likely be set to cap any price adjustments, Hwang added.
The planned formula is being reviewed by officials at the Bureau of Energy of the Ministry of Economic Affairs (MOEA), he said, adding that the final package, including the implementation date, will have to obtain the consent of the ministry and the Cabinet before it can be put into full effect.
The new policy will most likely come into force on Oct. 1 this year at the earliest, following the July to September period, when higher summer electricity rates are in effect, he said.
Separately, CPC Corp, Taiwan (CPC, 台灣中油) said yesterday that it would still adjust domestic fuel prices during the Lunar New Year holiday, based on the company’s floating pricing mechanism.
This announcement marked a drastic change from the state-run refiner’s past practice, when it tended not to raise prices during this holiday to assist the government in keeping consumer prices stable.
CPC said in a statement it would announce its weekly price adjustments on Sunday (Feb. 10) for next week.
Additional reporting by Kevin Chen