Possibility of Electricity Rate Increase Amid Financial Crisis at Taiwan Power Company
Taiwan stated that even if it adjusts electricity rates to reflect actual costs, the rates will still be set lower than those in Korea to maintain industrial competitiveness.
According to Taiwanese media such as United Daily News and Economic Daily News on the 11th, Guo Zhuhui, Taiwan's Minister of Economic Affairs, recently expressed this position in a media interview regarding the possibility of electricity rate hikes to resolve the financial crisis of Taiwan Power Company (TPC).
Taiwanese soldiers lowering the flag at the flagpole in Taipei Liberty Square. [Image source=Yonhap News]
Minister Guo explained, "Electricity rates for residential use remain stable, and since industrial electricity rates require state capital investment to generate profits, it is necessary to appropriately reflect this."
He emphasized that even if water and electricity rates increase, they will still be lower than those in Korea, thereby securing industrial competitiveness.
Taiwanese media, citing sources, suggested that Minister Guo's remarks may be related to the Ministry of Economic Affairs' plan to hold an electricity rate review committee next month to decide whether to raise electricity rates starting in October.
In this context, Taiwanese media predicted that if the TPC support plan amounting to 100 billion New Taiwan dollars (approximately 4.2 trillion KRW) submitted by the Executive Yuan (government) fails to pass the Legislative Yuan (parliament), electricity rates could see an additional 10% increase following the average 11% hike in April.
The Legislative Yuan Budget Center reported that TPC's annual financial deficits were ▲ 41.686 billion New Taiwan dollars (approximately 1.7 trillion KRW) in 2021 ▲ 206.39 billion New Taiwan dollars (approximately 8.6 trillion KRW) in 2022 ▲ and 382.627 billion New Taiwan dollars (approximately 16.1 trillion KRW) last year.
This year, a deficit of 188.75 billion New Taiwan dollars (approximately 7.9 trillion KRW) is expected, bringing the total accumulated deficit to 595.449 billion New Taiwan dollars (approximately 25 trillion KRW).
Additionally, Taiwanese media reported controversy after TPC announced on the 9th that it would not supply power to newly established data centers with capacities of 5MW (megawatts) or more in the northern Taoyuan area of Taiwan.
In response, the Ministry of Economic Affairs stated on social media the previous day that this was not a restriction on power transmission but rather a reference to shortages at northern power plants and the power grid.
They further emphasized that due to recent significant economic growth in Taiwan leading to increased electricity consumption, the establishment of large data centers in the northern region is inappropriate for securing residential power supply.
They added that in the long term, the issue will be resolved through improvements in facilities transmitting power from central and southern regions to the north and the construction of new power plants.
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