The Ministry of Economic Affairs yesterday said it has a mandate to raise electricity prices as planned after the legislature passed a non-binding resolution along partisan lines to freeze rates.
Chinese Nationalist Party (KMT) lawmakers proposed the resolution to suspend the price hike, which passed by a 59-50 vote. The Taiwan People’s Party (TPP) voted with the KMT.
Legislative Speaker Han Kuo-yu (韓國瑜) of the KMT said the resolution is a mandate for the “immediate suspension of electricity price hikes” and for the Executive Yuan to review its energy policy and propose supplementary measures.
Photo: Wang Yi-sung, Taipei Times
A government-organized electricity price evaluation board in March approved a proposal to raise prices depending on the type of user and range of power consumption.
The plan called for a 3 to 5 percent increase for most households, and a hike of up to 25 percent for consumers of 500 gigawatt-hours or more per month.
The latter group mainly comprises chipmakers, data centers and telecom operators.
The price hikes took effect in April.
The Energy Administration said in a news release that adjusting electricity rates is governed by Article 49 of the Electricity Act (電業法).
This law and associated regulations state that an electricity price committee should be convened twice a year to determine prices based on a stipulated formula, the agency said, adding that the legislature approved the measures nine years ago.
The agency urged the public to support the price adjustments by state-run Taiwan Power Co (Taipower, 台電) in light of soaring global energy costs after the Russian invasion of Ukraine.
Last year, Taipower spent NT$600 billion (US$18.44 billion) on importing hydrocarbons, double what it spent before the start of the conflict, it said.
Industrial electricity prices from 2020 to last year increased 160 percent in France and 87 percent in South Korea, two countries mainly dependent on nuclear power, the agency said.
Electricity prices for households and small businesses — the best indicators of the impact of price changes on the public — increased 7.1 percent and 12.2 percent during the same period, it said.
Low electricity prices meant Taipower was operating at a loss, and had to be subsidized by taxes, it said.
In effect, the average Taiwanese taxpayer is subsidizing heavy power consumers, it added.
Taipower is forecast to record losses of NT$382.6 billion if electricity rates are not increased this year, it said.
Executive Yuan spokesman Lin Tze-luen (林子倫) said the Cabinet “expresses its disapproval of the legislature’s passage of the resolution and emphasizes that ensuring stable electricity supply should not be a partisan issue.”
The price adjustments were made in accordance with the Electricity Act, which requires the government to implement the energy price committee’s decision on rate adjustments, he said.
“As branches of the government, the Executive Yuan and the Legislative Yuan should, based on the Constitution, stay within their stipulated prerogatives and responsibilities,” Lin said.
World energy prices have soared due to the impact of the Russian invasion of Ukraine and the COVID-19 pandemic, creating immense fiscal pressure on Taipower, Lin said.
Rising power rates are unavoidable if Taipower is to be a commercially viable enterprise, he said.
The KMT caucus said in a statement that the resolution was “the first step and a gunshot” against the government’s energy policy from Taiwanese.
The government has over the past few years “provided NT$450 billion in subsidies to Taipower, but the company remains on the brink while green energy companies are enjoying a glut,” it said.
The KMT will make further demands of the current and future administration to provide supplementary measures for the nation’s energy structure, extend the life of certain power plants and provide a strategy for Taipower’s operations, it said.
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