Today (Sep. 19), the Ministry of Economic Affairs (MOEA) held the second Electricity Tariff Examination Council meeting for 2022 to determine electricity rates for the second half of the year. The meeting discussed and confirmed the cost information for the electricity retailing utility enterprise according to the Calculation Formula for Electricity Price of Electricity Retailing Utility Enterprise. Owing to the circumstance of high-record international fuel prices, the increasing in electricity price recently, domestic inflationary pressure, and the government's NT$150 billion investment in Taipower, the Examination Council decided that the average electricity rate will remain at NT$2.8458/kWh. Simultaneously, Taipower is recommended to submit a financial improvement plan (including asset revaluation, etc.).
The MOEA stated that the recent slowdown in economic growth has led to a slight decline in energy demand, and crude oil prices have slightly dropped. However, international natural gas spot prices are still high, and coal prices are also at historically high levels, which means that Taipower's fuel cost pressure remains high. The Examination Council observed that all countries are facing the impacts of this wave of high fuel prices, leading to energy price increases and rising consumer goods prices. Considering that an electricity price increase had just happened in July this year, sufficiently increasing Taipower's revenue by about NT$28.8 billion, and domestic inflationary pressure remains strong, with electricity price adjustment among factors affecting inflation, the Examination Council decided to maintain the current price of electricity in order to stabilize commodity prices.
The MOEA explained that the price adjustment in July only allows Taipower to maintain the minimum financial capacity for continued operation; the company still suffers losses. However, in order to ensure that Taipower can continue to invest in stable electricity supply, an additional NT$150 billion has been planned for infrastructures, assisting Taipower to enhance grid resilience through power development and grid investment. Furthermore, the Examination Council also attaches great importance to Taipower's financial status and suggested that Taipower should propose a financial improvement plan; the MOEA will oversee the completion of this plan.
Moreover, in response to the impacts of climate change, the Examination Council has carried out numerous discussions on the issue of expanding summer months for high-voltage customers. With extreme weather occurring at a higher frequency, May is now prone to early heat and drought, and October is also often hot due to Indian summer. In October, when air pollution typically is at its worst, up to 2.7 million kilowatts of coal generators are shut down for environmental protection. Factors like these result in high demand and low supply in May and October. To incentivize major consumers to adjust their production schedules and save energy, the Examination Council decided to expand the summer months for high-voltage consumers from its original period of June to September to the new period of the second half of May to the first half of October (5/16-10/15), effective January 1, 2023. Since the summer month period is extended by one month, the electricity rates in non-summer months will be reduced from January 2023 onwards to maintain the average electricity rate throughout the year. Taipower estimates that this measure, combined with demand reductions, will reduce peak demand by another 500,000 kilowatts. This reduction, equivalent to the capacity of one generator in Taichung, will ensure stability of peak electricity supply. Taipower also reported the effectiveness of the time-of-use price adjustment trial, but would extend the trial to December this year in order to further provide guidance to customers.
Based on the information disclosure principle, the MOEA will disclose the detailed information, including meeting minutes, discussion materials, and the electricity costs information, on the website within 10 days after the meeting on September 19. Starting from September 29, the public may access the "Electricity Tariff Rates Information Disclosure Section" (https://www3.moeaboe.gov.tw/ele102/) via the homepage of MOEA or the Bureau of Energy to learn relevant information on Electricity Tariff Examination Council and costs from Taipower.
Spokesperson: Chun-Li Lee, Deputy Director General, Bureau of Energy, Ministry of Economic Affairs
Phone Numbers: 02-2775-7700; 0936-250-838
Email: chunlee@moeaboe.gov.tw
Business Contact: Ching-Sheng Chen, Director, Bureau of Energy, Ministry of Economic Affairs
Phone Numbers: 02-2775-7753; 0983-499-890
E-mail: cschen@moeaboe.gov.tw