Because of the nation’s wobbling economic growth and stagnant personal income, Taiwan Power Co (Taipower) yesterday succumbed to widespread public anger and reduced the impact of its latest round of electricity rate hikes.
The company’s compromise may help placate the public while still allowing it to take a breather from mounting financial pressure, as the new rates will help boost Taipower’s revenue by NT$50 billion (US$1.7 billion) this year.
Based on the company’s latest statement, most consumers — about 85 percent of residential households — will not be affected by the increases from the utility’s second-phase rate increase in October. The first-phase, 10.41 percent rate hike was implemented in June last year.
Taipower last year proposed a drastic plan to save the company from insolvency. As of the end of last month, the state-run company had accumulated NT$220 billion in losses. It blamed the government’s subsidy program and the rising prices of raw materials like crude oil, natural gas and coal.
Power generated from coal and natural gas accounted for most — 70 percent — of the power consumed in Taiwan last quarter, according to Taipower’s statistics.
In the newly unveiled price scheme, residential households with monthly consumption of less than 500 units will not be affected, although Taipower originally planned a ceiling of 330 units. Small-scale businesses with monthly power usage of less than 1,500 units will likewise be unaffected, Taipower said.
It is good that Taipower has compromised on its price policy to help stabilize the nation’s economic growth, as its original plan for a 9.64 percent price rise would have eroded 0.02 percent of Taiwan’s GDP. This may seem inconsequential, but the nation’s economy is expanding at a much slower rate this year than what the government expected.
The Directorate-General of Budget, Accounting and Statistics (DGBAS) has trimmed its forecast for Taiwan’s GDP growth to 2.31 percent for this year from the 2.4 percent it estimated in May.
What is more important, however, is that Taipower’s revision — an average price rise of 8.49 percent, rather than the 9.64 percent it initially proposed — is a blessing, as increasing consumer prices and declining personal incomes have placed great financial pressure on the public.
Personal income dropped to NT$47,557 a month from January to June, down from the NT$47,576 reported in 1997, after factoring in a 1.31 percent consumer price increase, according to statistics released by the DGBAS earlier this month.
As most households and small enterprises will not be affected by the electricity rate hike, consumers will be more willing to spend. Private consumption, one of the two pillars of Taiwan’s GDP, is expected to grow 1.59 percent this year, the DGBAS projected. However, the agency said the growth would remain weak.
In the short term, Taipower’s compromise will have a positive impact on the nation’s economy. Raising the electricity rate is the fastest and easiest way to improve the company’s financial situation, but this will not fix its fundamental problem — poor cost structure. To fix this problem, it may be necessary to deregulate the nation’s electricity market.
US President Donald Trump on Thursday issued executive orders barring Americans from conducting business with WeChat owner Tencent Holdings and ByteDance, the Beijing-based owner of popular video-sharing app TikTok. The orders are to take effect 45 days after they were signed, which is Sept. 20. The orders accuse WeChat of helping the Chinese Communist Party (CCP) review and remove content that it considers to be politically sensitive, and of using fabricated news to benefit itself. The White House has accused TikTok of collecting users’ information, location data and browsing histories, which could be used by the Chinese government, and pose
Chinese President Xi Jinping (習近平) at a ceremony on July 30 officially commissioned China’s BeiDou-3 satellite navigation system. The constellation of satellites, which is now fully operational, was completed six months ahead of schedule. Its deployment means that the People’s Republic of China (PRC) is now in possession of an autonomous, global satellite navigation system to rival the US’ GPS, Russia’s Glonass and the EU’s Galileo. Although Chinese officials have repeatedly sought to reassure the world that BeiDou-3 is primarily a civilian and commercial platform, US and European military experts beg to differ. Teresa Hitchens, a senior research associate at the University of
There are few areas where Beijing, Taipei, and Washington find themselves in agreement these days, but one of them is that the situation in the Taiwan Strait is growing more dangerous. Such a shared assessment quickly breaks down, though, when the question turns to identifying sources of rising tensions. Several Chinese experts and officials I have consulted with recently have argued that Beijing’s increasingly belligerent behavior in the Taiwan Strait is driven mostly by fear. According to this narrative, Beijing is worried that unless it puts a brake on Taiwan’s move away from the mainland, Taiwan could be “lost” forever. They
Former president Lee Teng-hui (李登輝), who died on Thursday last week, coined the phrase “new Taiwanese” and used it in some of his public speeches. The concept of “new Taiwanese” was an important link in the chain of his political thought. Lee proposed the term in August 1998 on the eve of the anniversary of the end of the Pacific War. His intention was to consolidate a common understanding around the idea of “new Taiwanese,” and to embody the Taiwanese spirit of never giving up and not fearing hardship, and to create bright prospects for generations to come. However, after