It is common knowledge that average electricity rates in Taiwan are much lower than those in other countries, and have basically remained the same for decades. The industrial electricity prices are especially low.
During the past several years of economic growth, industrial power consumption has increased, and in recent years, due to the war between Russia and Ukraine, energy costs have increased drastically. If electricity prices are not raised, taxpayers basically have to subsidize the electricity bills of industries and big corporations.
Taiwan Power Co has deficits running into the hundreds of billions of New Taiwan dollars. The main reason is low electricity prices. Of course, the government should take care of the public, especially disadvantaged groups.
That is why when the Executive Yuan laid out the policy of raising electricity rates, industrial and corporate users were targeted first. Disadvantaged groups, household electricity users and industrial electricity users suffering economic losses are excluded.
Some people have said that the electricity prices have to be raised because of the government’s non-nuclear energy policy. This is not the case.
In South Korea, nuclear energy accounts for 30 percent of the country’s electricity generation, but the cumulative losses of electricity companies have surpassed NT$750 billion (US$23.51 billion). In France, nuclear energy accounts for 60 percent of electricity generation, but the cumulative losses of the electricity companies are about NT$570 billion.
The French government has had to provide a subsidy of NT$670 billion to cover the losses. Obviously, electricity rates have more to do with the enormous increase of energy costs as a result of global events.
Given that electricity prices in Taiwan are too low, industrial users have been able to take advantage of this and consumption has increased year by year. If electricity rates continue to remain the same, this means that all Taiwanese would have to pay for costs that keep rising. This is not fair at all.
In advanced countries, everything is based on a free-market mechanism. In Taiwan, however, rate changes have to go through an electricity price review committee organized by the Ministry of Economic Affairs. In this way, energy costs can be discussed and the public’s well-being can be ensured.
The electricity rate policies in 2022 and last year proved that only those who consumed a great amount of electricity were impacted by the increase. For household electricity users, no harm was done.
Additionally, the government considered factors such as the COVID-19 pandemic to adjust electricity rates accordingly. In 2022, when electricity prices were raised, it did not affect the industrial sectors focused on domestic demand, while social welfare organizations were excluded.
When electricity rates are raised, only those who consume a great amount of electricity and the industrial sectors will be affected. These users have been benefiting from Taiwan’s inexpensive electricity prices, and it is right that they should be asked to pay more for energy from now on.
These major power consumers are perfectly aware of increases in manufacturing costs and the need to adjust product prices, but when it comes to dealing with energy costs, they try to prevent a reasonable change to the electricity rates.
They simply want to take advantage of taxpayers and such an attitude is unacceptable.
Chen Ping-hei is a distinguished professor in National Taiwan University’s Department of Mechanical Engineering.
Translated by Emma Liu
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