Premier Mao Chi-kuo today said that Taiwan's new electricity pricing mechanism will make price adjustments more systematic and transparent while ensuring steady and reliable electricity supplies for households and businesses.
After being briefed by the Ministry of Economic Affairs (MOEA) on the new measures, which cleared the Legislature two days ago, the premier instructed the MOEA to establish an electricity rate review committee as quickly as possible. Premier Mao also asked the state-run Taiwan Power Co. (Taipower) to calculate relevant costs, propose a price adjustment plan, and—after the plan passes the committee—introduce the first adjustment in April.
The MOEA should help Taipower explain to the public the new pricing mechanism and its potential impact on households and industries, Mao said. The ministry should also continue guiding Taipower to improve its performance and make costs and expenses more transparent. Printing fuel costs per kilowatt-hour on electricity bills, for instance, can help consumers better understand electricity rate adjustments in the future.
The Executive Yuan will propose amendments to the Electricity Act in accordance with the Legislature's resolutions, indicated Premier Mao, adding that the act will essentially reflect the actual costs of electricity. That is, if nuclear-power electricity should be phased out in favor of renewable energy in the future, electricity rates would see large hikes.
Changes to the Electricity Act are expected to help liberalize the power generation industry, Mao said. While the task of maintaining low electricity rates under limited energy options is a challenging one, the executive branch will submit an appropriate solution to the Legislature.
In regard to the Ministry of Education's (MOE) request for electricity discounts for the nation's schools, the premier replied that subsidizing electricity expenses is a government policy. The price difference should be absorbed by the competent authorities—the MOE for public schools and Taipower for private schools. If the government's funds are insufficient, then new options will be added to the electricity pricing mechanism to cover the subsidies.
In the new pricing formula, the "reproduction cost per kilowatt-hour (NT$0.1)" term has been removed while "income tax" has been lumped into the "taxes and fees" term. Electricity prices set under this formula will be reviewed on a semi-annual basis, and any price increases will be capped at 3 percent every six months or 6 percent a year.
The MOEA said it will soon draft amendments to the Electricity Act for the Cabinet's approval so as to create a sound regulatory environment for Taiwan's electricity power industry.