The Ministry of Economic Affairs yesterday raised electricity tariffs by 3 percent to 25 percent depending on power usage, which would add small extra costs to most households and small businesses, it said.
An energy price review committee at the ministry arrived at the new progressive tariff system, guided by attempts to keep loss-making Taiwan Power Co (Taipower, 台電) afloat while striving to avoid feeding inflation expectations.
Starting on April 1, tariff rates are to grow an average of 11 percent across the nation, but 93 percent, or 12.5 million households, would see an increase of 3 to 5 percent, or less than NT$20 in their electricity bills, it said.
Photo: CNA
Residential users that consume more than 330 kilowatt-hours (kWh) of electricity per month are subjected to a 3 percent hike and the adjustment would rise to 5 percent for users of more than 700kWh, it said.
“We reached the final figures to reflect international fuel price movements,” the ministry said, adding that Taipower’s losses had more to do with elevated international fuel costs following the invasion of Ukraine by Russia rather than the increase in renewable energy.
The new schedule would be sustained through September, meaning more hikes would be necessary in October.
Likewise, electricity bills for small stores that use 700kWh of electricity a month would be subjected to a 3 percent increase, while monthly electricity consumption of between 701kWh to 1500kWh would climb 5 percent, it said.
A total of 760,000 shops, or 84 percent, would fall under the two categories, it said.
The tariff hikes are the steepest at 15 percent to 25 percent for heavy industrial and commercial users that consume more than 500 million kWh of electricity a month and display a rising need for two consecutive years, it said, alluding to chipmakers, Internet data centers and telecom operators.
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) is believed to be the largest power user given its continued capacity expansion to meet chip demand from Nvidia Corp, Apple Inc, Intel Corp, Advanced Micro Devices Inc and other technology titans.
The ministry halves the hikes for sectors with business declines and keeps the rates unchanged for agricultural sectors, all grades of schools and non-profit organizations.
“The committee will conduct a review and see how these sectors fare six months later,” it said.
The Directorate-General of Budget, Accounting and Statistics said that a 10 percent hike in electricity rates would push up inflation by 0.12 percentage points a year.
The central bank on Thursday raised the policy rate by 0.125 percentage points to curb inflation expectations.
It remains to be seen if businesses would pass extra financial burdens onto customers and thwart the government’s effort to cool inflationary pressures.
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