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Ruling, opposition lawmakers agree on new electricity pricing formula

Ruling, opposition lawmakers agree on new electricity pricing formula

Taipei, Jan. 19 (CNA) Ruling and opposition party lawmakers reached an agreement Monday on a proposed pricing formula for electricity rates that will limit rate hikes to 3 percent over a period of six months and 6 percent over a year. The new pricing formula is expected to be given the green light at the Legislative Yuan before the end of the month and take effect in April, the Ministry of Economic Affairs estimated. Economics Minister John Deng (???) anticipated a drop in electricity prices once the new pricing formula is implemented, but said the amount of the drop is still unknown. The agreement among lawmakers came after inter-party negotiations hosted by Legislature Speaker Wang Jin-pyng (???) earlier in the day, which concluded that "the future electricity rates should be able to generate reasonable profits to achieve a return on investment of 3-5 percent." Under the new formula, the upper limit of 5 percent would be put in place when state-run Taiwan Power Co. (Taipower) needs to cover accumulated losses, at which time all profits must be put to paying off those losses. The return rate would have to be lowered to 3 percent once the company is fiscally sound. Lawmakers also decided that electricity prices should be reviewed by an "electricity fare deliberation commission" every six months based on the pricing formula. Wang said the organization of the planned electricity fare deliberation commission will be regulated in amendments to the Electricity Act. Before the act is revised, an ad-hoc commission will be formed based on a Legislative Yuan resolution, the speaker said. The inter-party negotiations also concluded that state-run Taipower has to publicize its fuel procurement, electricity transmission and operational costs online, and that it must list the fuel cost per kilowatt-hour of electricity on bills. Under the current system, Taipower calculates the amount of power generated and used at the end of every June to make an estimate of power use in the following six months, which it reports to the MOEA by the end of July. The ministry then convenes a meeting by the end of August to decide on any rate hikes or cuts, and the changes are announced on Sept. 1 before an adjustments takes place on Oct. 1 -- the end of the June-September summer price period. Taipower has faced criticisms that the once-a-year adjustment period is too long and fails to reflect fluctuations in fuel prices. (By Tseng Ying-yu, Huang Chiao-wen and Elizabeth Hsu)

Updated : 2021-09-18 18:07 GMT+08:00