COST OF LIVING/Taiwan to raise residential and industrial electricity rates

Taipei, March 22 (CNA) Taiwan will adjust electricity rates higher by 11 percent on average, with residential users to face a lower rate hike than industrial users, the Ministry of Economic Affairs (MOEA) said Friday.

The planned adjustments to electricity rates, which will be in effect from April to September, was announced following a meeting of the ministry's electricity price review committee on the same day.

Rates will go up by 11 percent on average to about NT$3.4518 per kWh, Taiwan Power Co. (Taipower) President Wang Yao-ting (王耀庭) told a press conference.

According to the MOEA, the residential rate hike is 3-5 percent (less than NT$20 a month on average) for around 93 percent of the residential electricity users or about 12.5 million households that use less than 700 kWh a month.

The industry rate hikes, meanwhile, could range from 7 percent to as high as 25 percent depending on how much electricity certain industries use.

The average rise in industrial rates is 12.7 percent, pushing the average price from NT$3.38 per kWh up to about NT$3.81 per kWh, according to the ministry.

Wang said that there will be differences in the rate hike for different industries.

For example, those whose use of power dropped by more than 10 percent in the latter half of 2023 compared to before, will see a 7 percent hike.

For major industrial electricity users that consume more than 500 million kWh a year, if they see an average increase of power use in the past two years, their rate will rise by 15 percent to 25 percent depending on their annual use, Wang said.

Those who use more than 15 billion kWh a year will see a rate hike as high as 25 percent, Wang added.

The MOEA declined to name specific companies, but according to local media reports, Taiwan Semiconductor Manufacturing Co.'s (TSMC) annual power consumption was 21.08 billion kWh in 2022, which would place it in the highest category of industrial electricity rate hikes.

The ministry revealed that the committee decided to freeze rates for the agriculture and fishery sectors, as well as for schools, and social charity groups.

The rate hikes are being rolled out as Taipower faces an accumulated deficit of NT$382.6 billion (US$12.14 billion) as of the end of 2023.

Economics Minister Wang Mei-hua (王美花) said earlier this month that without an adjustment to the current electricity rates, the state-run company would incure a further loss of NT$188.7 billion in 2024 alone.

Taipower said that with a promised NT$100 billion subsidy from the Cabinet and the electricity rate hikes, the anticipated loss is expected to decrease to about NT$10 billion this year.