A government subsidy for Taiwan Power Co (Taipower) would be of great help, Minister of Economic Affairs J.W. Kuo (郭智輝) said today, amid reports that the state-owned utility foresees three different scenarios for electricity price adjustments.
His comments came prior to the Legislative Yuan’s Economics Committee meeting today to discuss amendments to the Electricity Act (電業法).
A government-convened price review committee is to meet at the end of this month to decide on electricity rates, Kuo said.
Photo: Lin Cheng-kun, Taipei Times
Taipower’s losses have reached NT$422.9 billion (US$12.8 billion) in recent years, as the company has avoided passing on increasing electricity costs to households.
Media have reported that the company has internally simulated three scenarios regarding electricity rates.
If the average rate increases by 6 percent, it would reportedly affect 14.5 million households, and impact people’s livelihoods as well as small businesses.
In the second, the committee might keep the rate increase under 6 percent over concerns about its impact on inflation and cost of living, reports said.
In the third scenario, it might choose to delay any rate changes until the government makes a decision on potential subsidies, they said, adding that the “best-case scenario” would be for the legislature to approve a NT$100 billion boost for the company.
Kuo told reporters that he was not in a position to comment on subsidies, although he added that the Ministry of Economic Affairs would implement electricity rates based on the price review committee’s decision.
If the Legislative Yuan agrees to a subsidy plan, it would be of great help to the company, lessening its debt load and interest payments, Kuo added.
Opposition legislators raised concerns on potential rate hikes, as it would be the fifth increase in four years.
The current situation differs from prior rate increases, as Taipower has absorbed NT$600 billion in costs from freezing rates, but has only received NT$300 billion in subsidies, Kuo said.
Taipower is still working hard to reduce costs, but circumstances such as the war in Ukraine have contributed to higher energy prices, Kuo added.
In response to media questions about nuclear energy, Kuo said there must be public consensus for it to be implemented, along with a viable plan for handling nuclear waste and strict safety regulations.
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