Average Electricity Tariff Rates will Rise by 3 percent on April 1
to review the electricity tariff rates of the retailing utility in the first half of 2018. The various costs data and reasonable profits
of the retailing utility were reviewed and confirmed in the meeting. Taking the upward trend on fuel prices into consideration,
the Examination Council decided to adjust the rates by 3%, which means that the electricity price increases from NT$2.5488/kWh
to NT$2.6253/kWh. Based on the three principles of taking care of people's livelihood, price stabilization and energy conservation,
MOEA determines that the rates will remain the same for the residential consumers who use less than 500 kWh and small business
users who use less than 1,500 kWh.
The MOEA states that the"Calculation Formula for Electricity Price of Electricity Retailing Utility Enterprise" was announced on
November 6, 2017, in accordance with Article 49 of the Electricity Act, which was amended and promulgated in 2017. The change
of the rates is regulated to be within a range of 3%. In recent years, the rates have been steadily declining. The total decline has
reached 19.23% after three downward adjustments in 2015 and 2016. Though the rates were not adjusted in 2017, the rates are
the lowest among the neighboring countries in Asia.
The main reason for the adjustment this time is due to the increase in international fuel prices. The fuel costs account for more
than 50% of electricity costs. Since the last adjustment (in second half of 2016), the coal price has risen from US$50/metric ton to
US$80/metric ton, and the oil price rose from US$50/barrel to US$63/barrel. Since the natural gas price is linked to the oil price,
the natural gas price shall rise from NT$9.54/cubic meter to NT$11.16/cubic meter. According to Taiwan Power Company's data,
the rates are originally planned to increase by 14.54%. The increase in rates has been reduced to 10.24% after the review of the
Electricity Tariff Examination Council, however, it still exceeds the rates adjustment ceiling. Therefore, the Electricity Tariff Examination
Council decided that the rates will only be adjusted upward by 3% this time, and the gap will be filled by the Electricity Price
Stabilization Fund next year, depending on its actual profits (or losses).
MOEA emphasizes that the average adjustment rate is around 3%, and the tariff for various types of users will be adjusted according
to the following three principles:
1.Taking care of the people's livelihood: rates for residential households who use less than 500 kWh (330 kWh in the past) will not be
adjusted. About 85% of the residential households will pay the same amount of electricity bills as before.
2.Price Stabilization: rates for small businesses whose usage is under 1,500 kWh will not be subject to change. About 82% of the small
businesses will pay the same amount of electricity bills as before.
3.Energy conservation: Moderate upward adjustments are going to be made for residential households whose usage is more than
500 kWh and small businesses with usage above 1,500 kWh, thus leading users to save energy.
MOEA encourages residential households to sign up for Taiwan Power Company's energy-saving promotions, and small-business users
can contact the "Energy Diagnosis Center for Small and Medium-sized Energy Users" for electricity conservation assistance. When the
users manage to keep the electricity usage below 500 kWh or 1,500 kWh, the proportion of households that will not be subject to changes
shall increase. In addition, according to the analysis of the Directorate-General of Budget, Accounting and Statistics of the Executive Yuan,
the impact of electricity rates increase on the consumer price index (CPI) should be minimal and the effect is approximately 0.08%.
MOEA states that Taiwan Power Company will start the new electricity pricing scheme, in accordance with the resolution of the
Examination Council and the adjustment principles mentioned above. After submitting the rates to MOEA for approval, the new rates will
be applied on April 1st. In addition, MOEA will disclose the detailed information including meeting minutes, discussion materials of the
meeting and the electricity costs information on the website within 10 days after the meeting. From March 26 onward, the public may
access the "ElectricityTariff Rates Information Disclosure Section" (https://www3.moeaboe.gov.tw/ele102/) via the home page of MOEA
or the Bureau of Energy so as to obtain the pricing review and costs information of Taiwan Power Company.
Source: Bureau of Energy, Ministry of Economic Affairs