The legislature’s Economics Committee yesterday failed to reach consensus on the profit margin range for a new electricity pricing formula and agreed to send the proposal to cross-caucus negotiations.
Legislative Speaker Wang Jin-pyng (王金平) will convene a cross-caucus meeting to discuss a “reasonable” profit margin range for Taiwan Power Co (Taipower, 台電) and how often the government has to make adjustments to power rates to cope with market changes, the committee said.
“From the Ministry of Economic Affairs’ perspective, a reasonable profit margin should be between 3.5 percent and 5.5 percent, but lawmakers have different opinions about the range of the figure,” Minister of Economic Affairs John Deng (鄧振中) told reporters on the sidelines of the meeting.
Photo: Lin Cheng-kung, Taipei Times
A “reasonable” profit margin should help cover Taipower’s accumulated debt and allow the state-run utility to buy new equipment, Deng said, adding that it does not include employee profit-sharing.
Chinese Nationalist Party (KMT) Legislator Huang Chao-shun (黃昭順) said the profit margin should be between 3 percent and 6 percent.
Taipower chairman Hwang Jung-chiou (黃重球) said he was agreeable to setting a cap of 6 percent because any figure higher would push up power rates.
Deng said the ministry usually adjusts power rates every six months to make it easier for Taipower to calculate and bill clients.
Huang agreed, saying: “Since the utility still needs to adjust power rates during summer, it will be difficult for the company if the rates are adjusted every three months.”
The lawmakers passed a resolution stating that once the formula is approved, an electricity price review commission should be formed with no more than a third of the members appointed by the government.
The lawmakers added that academics who had worked on research projects with the state-run firm over the past three years cannot join the commission.
“The two aforementioned resolutions are to avoid conflicts of interest between [commission] members and Taipower,” Democratic Progressive Party (DPP) Legislator Huang Wei-cher (黃偉哲) said.
The committee also asked Taipower to report to the legislature every six months to ensure that the company is striving to improve its operating efficiency.
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