Tue, Sep 04, 2012 - Page 3 News List

Lawmakers say electricity hikes should be frozen

POWER TO THE PEOPLE:If implemented, the second stage of electricity price hikes would likely raise the national ‘misery index,’ DPP Legislator Chen Ou-po said

By Chris Wang  /  Staff reporter

From left to right, Democratic Progressive Party legislators Huang Wei-cher and Chen Ou-po, and Taiwan Solidarity Union Legislator Hsu Chun-hsin, propose a freeze in fuel and electricity prices during a press conference in Taipei yesterday.

Photo: CNA

President Ma Ying-jeou (馬英九) should suspend an electricity price hike planned for December to ease the public’s financial burden and carry out plans to improve state-run power companies as he had promised, lawmakers of the pan-green camp said yesterday.

Citing the huge losses of Taiwan Power Corp (Taipower), the Ma administration heeded the public’s complaints and revised the original one-off price increase plan in May to a three-stage increase, with a 40 percent rate hikes for the first stage beginning on June 10 and another 40 percent increase on Dec. 10.

The first electricity price increase, coupled with the rising price of fuel, triggered a general rise in the prices of commodities and made people’s lives harder, Democratic Progressive Party (DPP) Legislator Chen Ou-po (陳歐珀) told a press conference.

The “misery index,” the sum of the unemployment rate and the inflation rate, is now at 6.77 and would likely rise when the second-stage increase takes effect, said Chen, who initiated the proposal to call for the hike to be suspended.

Taiwan Solidarity Union (TSU) caucus whip Hsu Chung-hsin (許忠信) said the implementation of the second increase would be unwise because average monthly real wages are now on the same level as 17 years ago and 3.6 million Taiwanese young people earn less than NT$30,000 (US$1,004) per month.

The reason Taipower gave for raising electricity rates — that it was suffering huge losses due to perennially low fuel prices — “is now illegitimate,” DPP Legislator Chen Ting-fei (陳亭妃) said in a separate press conference organized by the DPP legislative caucus.

It was illegitimate “because it [Taipower] had allocated a large amount of bonuses in its budget plan for next year and it was unable to cut the price that it paid for electricity it purchases from independent power producers [IPPs] as it had promised,” Chen said.

The company allocated NT$164 million for bonuses and NT$3.2 billion in welfare funds in its budget statement for next year, while its personnel expenses were just NT$34.8 billion, DPP Legislator Huang Wei-cher (黃偉哲) told the press conference.

This was not consistent with Taipower’s pledge in an initial report conducted by a task force organized by the Ministry of Economic Affairs (MOEA) to improve its management, in which the company said it would be able to save between NT$2.1 billion and NT$2.6 billion in costs by purchasing electricity from IPPs at cheaper rates, Huang said.

“Judging from the budget statement, it seems to me that the company lacks the willingness to implement reforms,” Huang said.

Huang said the proposal to suspend the second stage of the hike plan has been met with consensus across party lines, despite the Chinese Nationalist Party (KMT) caucus being pressured by Ma to stick to the plan.

Taipower’s budget for this year is stalled in the legislature, he said, adding that its budget for next year is not likely to be approved either.

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