TAIPEI: Taiwan Power Co (Taipower) is to cut electricity rates by an average of 9.56 percent, or NT$0.2693 (US$0.08) per kilowatt-hour (kWh), to reflect lower power generation costs due to continued falling international crude oil prices.
The price cuts are the biggest in the nation’s history, according to Taipower’s data.
“Given low global crude oil prices, the electricity review committee said that there is room for Taipower to lower its average electricity rates,” Vice Minister of Economic Affairs Shen Jong-chin told a press conference in Taipei.
The committee yesterday said that Taipower should lower average electricity rates from NT$2.8181 to NT$2.5488 per kilowatt-hour effective April 1, Shen said.
Bureau of Energy Director-General Lin Chuan-neng, a member of the committee, said the scale of the price cut was calculated based on the forecast average cost of US$40.15 per barrel for crude oil in the next six months compared with US$51 per barrel in October last year.
According to the new pricing scheme, about 4 million households using 330kWh or less per month would see their electricity bills drop by NT$80 per month, Taipower said.
Smaller-scale restaurants and shops that use 1,480kWh per month could see price reductions of NT$517, while large department stores with 9,600kWh electricity usage would see electricity bills cut by NT$3,378 per month, the state-run utility said.
As for industrial users that use about 1.5 million kWh, they are expected to see an average price reduction of nearly NT$400,000 per month, Taipower said.
After the price adjustments, the average electricity rate of NT$2.5488 per kilowatt-hour will be cheaper than the NT$2.6001 per kilowatt-hour recorded in 2011, the company said.
Lin said that the nation’s electricity prices for households are the third cheapest in the world, while the industrial electricity rates are the fourth lowest worldwide.
Also at the meeting, the committee agreed to set up an account to deposit NT$34 billion from Taipower’s profits last year.
The company made NT$61.8 billion last year, exceeding the electricity pricing formula’s “reasonable profit” by NT$34 billion, it said.
Lin said 14 out of the 17 committee members proposed setting up a special account for the funds to allow Taipower to absorb increases in power generation costs without having to raise electricity rates.
