Taiwan Power Co (Taipower, 台電) is considering multiple approaches — including cutting electricity rates — to reflect the reduction in its costs due to a drastic decline in global crude oil prices, Minister of Economic Affairs John Deng (鄧振中) said yesterday.
Deng said the state-owned company is expected to turn a net profit of NT$20 billion (US$639.38 million) this year, which would make it the company’s first profitable year since 2006.
Taipower estimates the company saved NT$9 billion in costs owing to the plunge in international oil prices, Deng said.
The newly appointed minister said there are several approaches the company could take to share the savings with the public.
Taipower might allocate some of the NT$9 billion when making plans for rate cuts or compensation plans in the future, he said.
“Although Taipower could see a profitable year, it still has debts of NT$208.4 billion from previous years,” Deng said.
The ministry plans to discuss how much of this year’s profits should be used for debt repayment and how much should be returned to the public.
Deng said Taipower has proposed a formula for calculating electricity rates that is similar to one used by CPC Corp, Taiwan (CPC, 中油) to reflect the company’s cost structure and it is pending legislative approval.
“We need a formula to reflect the power generation cost over time, so we can cut or raise electricity prices in accordance with fluctuations in costs,” Deng said.
Once lawmakers approve the proposed formula and Taipower has an accurate figure for its profits for this year, the ministry and Taipower will discuss how to share the profits with the public.
“Electricity rate cuts is one option, but we are also considering rewarding people who have conserved energy,” Deng said.
The ministry is also considering refunds based on electricity usage.
However, Taipower president Chu Wen-chen (朱文成) wants to take a more conservative approach, especially in terms of rate cuts.
Chu told reporters that the interest on the NT$208.4 billion debt amounts to more than NT$3 billion annually, so that if Taipower were to amortize the debt over 10 years, it will have to earn at least NT$21 billion annually to pay off the sum owed.
“If we do not repay the debt from our losses with this year’s net profits, but cut electricity rates instead, future generations will be forced to bear the heavy debt burden,” he said.
Instead of lowering rates, Taipower may share part of this year’s profits with the public by rewarding energy conservation and paying off some of its debt.
In related news, Premier Mao Chi-kuo (毛治國) also touched on electricity rates in his first news conference as premier.
He said the rates must reflect the recent decline in global crude oil prices.
The economics ministry has been tasked with devising a formula to calculate an appropriate price for electricity and once a consensus is reached among relevant governing bodies, the price of electricity will be adjusted retroactively — according to the new pricing formula — to reflect the recent changes in crude oil prices, he said.
Mao said there are several technical hurdles and dissenting opinions that must first be resolved to reach a consensus.
Additional reporting by CNA
QUIET START: Nearly a week after applications opened, agencies did not announce or promote the program, nor did they explain how it differed from other visitor visas Taiwan has launched a six-month “digital nomad visitor visa” program for foreign nationals from its list of visa-exempt countries who meet financial eligibility criteria and provide proof of work contracts. To apply, foreign nationals must either provide proof that they have obtained a digital nomad visa issued by another country or demonstrate earnings based on age brackets, the Bureau of Consular Affairs said. Applicants aged 20 to 29 must show they earned an annual salary of at least US$20,000 or its equivalent in one of the past two years, while those aged 30 or older must provide proof they earned US$40,000 in
AIR DEFENSE: The Norwegian missile system has proved highly effective in Ukraine in its war against Russia, and the US has recommended it for Taiwan, an expert said The Norwegian Advanced Surface-to-Air Missile Systems (NASAMS) Taiwan ordered from the US would be installed in strategically important positions in Taipei and New Taipei City to guard the region, the Ministry of National Defense said in statement yesterday. The air defense system would be deployed in Taipei’s Songshan District (松山) and New Taipei City’s Tamsui District (淡水), the ministry said, adding that the systems could be delivered as soon as the end of this year. The US Defense Security Cooperation Agency has previously said that three NASAMS would be sold to Taiwan. The weapons are part of the 17th US arms sale to
SERIOUS ALLEGATIONS: The suspects formed spy networks and paramilitary groups to kill government officials during a possible Chinese invasion, prosecutors said Prosecutors have indicted seven retired military officers, members of the Rehabilitation Alliance Party, for allegedly obtaining funds from China, and forming paramilitary groups and assassination squads in Taiwan to collaborate with Chinese troops in a possible war. The suspects contravened the National Security Act (國家安全法) by taking photos and drawing maps of key radar stations, missile installations and the American Institute in Taiwan’s headquarters in Taipei, prosecutors said. They allegedly prepared to collaborate with China during a possible invasion of Taiwan, prosecutors said. Retired military officer Chu Hung-i (屈宏義), 62, a Republic of China Army Academy graduate, went to China
UNITY MESSAGE: Rather than focusing on what Trump said on the campaign trail about Taiwan, Taipei should be willing to engage with the US, Pompeo said Taiwan plays a key role in Washington’s model of deterrence against China, former US secretary of state Mike Pompeo said in a speech in Taipei yesterday. During US president-elect Donald Trump’s first term, “we had developed what we believe was a pretty effective model of deterrence against adversaries who wanted to undermine the set of rules and values that the people of Taiwan and the people of the US hold dear,” Pompeo said at a forum organized by the Formosa Republican Association. “Succeeding in continuing to build this model will not solely rest at the feet of president Trump and his team,
RSS