Thu, Sep 20, 2012 - Page 3 News List

President defends suspension of electricity rate hike

By Mo Yan-chih  /  Staff reporter

President Ma Ying-jeou (馬英九) yesterday defended the government’s plan to suspend electricity rate increases and said a new electricity flow rate was aimed at resolving the problem of power costs.

“We hope to solve disputes over the rates charged for electricity with the flow-rate mechanism and let the market determine the fee. We do not want the rate to be manipulated by any political influences,” he said at the Chinese Nationalist Party’s (KMT) Central Standing Committee (CSC).

The Cabinet announced on Monday that it would delay planned electricity price hikes, scheduled for Dec. 10, until Oct. 1 next year and added that the decision was based on the current economic situation as well as general living costs.

Ma, who also serves as KMT chairman, said postponing the rate hike was the consensus of government officials and the KMT after some CSC members raised the issue last week and urged the government to consider delaying the price increase.

While the delay of electricity price hikes attracted much discussion, the president said the implementation of the flow-rate mechanism was crucial for power costs to reflect prices seen on the global market.

“The flow-rate mechanism will solve the problem in the long run, otherwise the issue will constantly spark disputes,” he said.

He also reiterated the government’s determination to continue the reform of state-run Taiwan Power Co (Taipower), saying that the government would gradually reduce the subsidies provided to the firm.

The government did not offer a definite timeline as to when the remaining 20 percent of the rate hike — which was to be put in place once Taipower had streamlined its operations to a level that satisfied the government — were to be implemented.

The initial planned increases involved hiking household electricity prices by 16.9 percent, commercial rates by 30 percent and industrial usage rates by 35 percent. The first stage, accounting for 40 percent of the total planned increase, took effect on June 10.

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