TAIPEI (Taiwan News) — The Kuomintang (KMT) and Taiwan People's Party (TPP) on Tuesday (April 30) combined forces to pass a resolution calling for a freeze in electricity prices, but the Ministry of Economic Affairs (MOEA) countered that the price hike must be implemented.
The two parties formed a majority on Tuesday to pass a resolution calling for a halt in power price hikes, reported CNA. However, the MOEA said the current electricity rate review is based on the formula set by the Legislative Yuan in 2015, which has subsequently been written into law and is handled according to Article 49 of the Electricity Act (電業法).
The MOEA said it respects the decision of the Legislative Yuan, but both the ministry and Taiwan Power Company (Taipower) must conduct operations based on the law and abide by the results of the electricity rate review.
The ministry's electricity price review committee decided on March 22 of this year to raise the average electricity rate by about 11%. For residential users consuming less than 700 kWh per month, the rate is increased by 3% to 5%, affecting approximately 12.5 million households, accounting for 93% of users.
For industrial electricity users, around 440,000 businesses will see increases of up to 14%, and a new category for "super-large users," consuming over 500 million kWh annually, including internet data centers (IDCs), may see increases of up to 25%. The overall electricity rate adjustment plan went into effect on April 1.
During Tuesday's Legislative Yuan session, the KMT caucus proposed a motion to stop the electricity rate hikes. Democratic Progressive Party (DPP) legislators argued that the rate adjustments were made according to the law, while KMT legislators criticized the government for its “flawed energy policies and lack of accountability.”
With the majority of votes in favor, the motion proposed by the KMT caucus was passed, vowing to immediately halt the electricity rate hikes.
The MOEA urged the public to support Taipower. It said the international surge in fuel prices due to the Russo-Ukrainian War has caused electricity prices to skyrocket worldwide.
Taipower's procurement costs for electricity fuel have exceeded NT$600 billion for two consecutive years, doubling from the approximately NT$300 billion spent before the Russian invasion of Ukraine. Despite this, Taiwan's electricity prices remain relatively moderate, with adjustments primarily targeting high-volume users to mitigate the impact on livelihoods, said MOEA.
The ministry said that countries with a higher proportion of nuclear power, such as France and South Korea, have seen industrial electricity prices increase by as much as 160% and 87% respectively from 2020 to 2023. In contrast, Taiwan's electricity price adjustments have been relatively mild, with cumulative increases over the past three years of only 7.1% for residential users and 12.2% for small businesses, which are most closely related to living costs.
The ministry said that the cost of electricity is still higher than the electricity price. Without adjustments, there would not only be issues with subsidizing high-volume electricity users but also a financial crisis looming over Taipower's operations, MOEA said.
By the end of 2023, Taipower's accumulated losses had reached NT$382.6 billion. Without electricity price adjustments, it is projected to incur further losses of NT$212.4 billion in 2024.
This would severely hinder Taipower's ability to ensure a stable power supply, invest in a robust power grid, and have extremely adverse effects on its operations, said the ministry.
