State-owned Taiwan Power Co (Taipower, 台電) said yesterday that price increases would take effect on July 1 at the earliest, if its proposal is approved by the Ministry of Economics Affairs next week.
The nation's only electricity retailer sent the proposal to the ministry last Friday, and the ministry will convene a special committee to discuss the tariff adjustments next Monday, Taipower chairman Edward Chen (陳貴明) told reporters at a press conference.
The nation's power tariffs have not been raised for the past 23 years, but have been lowered 11 times during the same period, with an average rate of decline of 26.1 percent, according to Taipower.
The last price increase occurred in 1981.
"Escalating fuel and coal prices have been a problem since the second half of 2003. We had no choice but to raise power tariffs to reflect rising costs," Chen said.
The electricity price increases follow moves by state-run Chinese Petroleum Corp (
If Taipower's proposal is approved, the average power rate will increase by around 6 percent across all categories, and would most likely take effect on July 1 at the earliest, or as late as Oct. 1 or Oct. 16 -- after summer is over.
Summer is the peak season for electricity consumption, with usage generally increasing by between 13 percent and 27 percent.
Taipower said that there are two separate rate plans each for both households and industrial users.
Households will be required to pay an average of 3.12 percent more after consuming over 330 kilowatt-hours per month, or 2.52 percent after using more than 400 kilowatt-hours per month.
Meanwhile, industrial users will have to shoulder an extra cost of 4.99 percent, or 4.93 percent on average, after using over 330 kilowatt-hours or over 400 kilowatt-hours per month respectively, according to Taipower.
The power retailer has been giving factories preferential rates to aid the nation's economic development. Industrial users pay an average NT$1.7 a kilowatt-hour, compared with NT$2.4 for households.
Industries and businesses consume 65 percent of the nation's total electricity. About half of households use less than 330 kilowatt-hours of electricity per month, the company said.
Regardless of whether or not the rate increases are approved, Taipower will still post losses.
Taipower will incur losses of between NT$9.2 billion (US$287 million) to NT$17.8 billion this year, while next year's losses will range between NT$12.5 billion and NT$17.5 billion, according to Chen.
In the absence of rate increases, Taipower's losses will exceed NT$23 billion this year, he added.
Higher fuel costs caused Taipower's pre-tax earnings to plummet to NT$900 million last year, compared to NT$31.8 billion in 2003.
INVESTOR RESILIENCE? An analyst said that despite near-term pressures, foreign investors tend to view NT dollar strength as a positive signal for valuation multiples Morgan Stanley has flagged a potential 10 percent revenue decline for Taiwan’s tech hardware sector this year, as a sharp appreciation of the New Taiwan dollar begins to dent the earnings power of major exporters. In what appears to be the first such warning from a major foreign brokerage, the US investment bank said the currency’s strength — fueled by foreign capital inflows and expectations of US interest rate cuts — is compressing profit margins for manufacturers with heavy exposure to US dollar-denominated revenues. The local currency has surged about 10 percent against the greenback over the past quarter and yesterday breached
MARKET FACTORS: Navitas Semiconductor Inc said that Powerchip is to take over from TSMC as its supplier of high-voltage gallium nitride chips Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday in a statement said that it would phase out its compound semiconductor gallium nitride (GaN) business over the next two years, citing market dynamics. The decision would not affect its financial targets announced previously, the world’s biggest contract chipmaker said. “We are working closely with our customers to ensure a smooth transition and remain committed to meeting their needs during this period,” it said. “Our focus continues to be on delivering sustained value to our partners and the market.” TSMC’s latest move came unexpectedly, as the chipmaker had said in its annual report that it has
Rick Cassidy, the chairman of Taiwan Semiconductor Manufacturing Co's (TSMC, 台積電) US subsidiary, TSMC Arizona Corp, plans to retire, but the company has yet to name a successor. After Cassidy made his intention to retire known, TSMC Arizona held a special general meeting and approved a resolution that Cassidy would not continue as chairman and would not remain as a director, TSMC said in a statement filed with the Taiwan Stock Exchange last night. The meeting also approved a plan to appoint TSMC Arizona president Rose Castanares as a director, the company said, adding that Cassidy has been named as an advisor
SECURITY WARNING: The company possesses key 3-nanometer technology, and Taiwan should prevent it from being transferred to China, a lawmaker said The Ministry of Economic Affairs yesterday said it would conduct a “strict review” of any proposed acquisition of Taiwanese tech company Source Photonics Co (索爾思光電), following media reports that a Chinese firm was planning to buy the company in the Hsinchu Science Park (新竹科學園區). Local media reported that Suzhou Dongshan Precision Manufacturing Co (東山精密), China’s largest printed circuit board manufacturer, had announced plans to acquire Source Photonics for 5.9 billion yuan (US$823.1 million). The ministry said it has not received an application from Source Photonics and has formally notified the company that any buyout would constitute a change in its ownership structure. The
RSS