Regarding today's (September 18th) press conference held by the Taiwan People's Party (TPP) caucus questioning Taipower's financial losses, a Taipower representative stated that the Russia-Ukraine war has led to a sharp increase in international fuel prices. This has caused many countries to significantly raise their electricity rates; both the rate of increase and the unit prices are higher than those in Taiwan. In contrast, to minimize impacts on the public’s livelihoods, Taiwan has handled electricity rate adjustments carefully, avoiding a large one-time increase. As a result, current electricity prices remain below cost, which has further resulted in financial losses. With fuel prices gradually decreasing and Taipower's efforts to reduce operating costs, the Company's financial situation is steadily improving. If the government’s NT$100 billion subsidy is provided in time, Taipower is hopeful to break even this year, thus preventing further accumulation of losses. Taipower will explain this situation to legislators to gain their support.
The TPP press conference mentioned Taipower Chairman Tseng Wen-Sheng as supposedly stating, "If the additional budget is not approved, another electricity rate hike in October cannot be ruled out". However, a Taipower representative clarified that Chairman Tseng never said "another electricity rate hike in October cannot be ruled out". Any adjustments to electricity rates are decided through expert deliberation by the Electricity Tariff Examination Council, in accordance with the law. Taipower has no authority to make such decisions independently. Furthermore, in accordance with the amendments to the Electricity Act that were passed on the third reading in July this year, the composition of the Council has been adjusted; scholars, experts, and representatives from civic groups now make up the majority, ensuring both professionalism and fairness. In accordance with the law, Taipower will provide electricity pricing data to the Council for review and will follow their decisions.
A Taipower representative explained that after the electricity rate adjustments from 2022 to 2024, the base rate of NT$3.45 per kWh is still lower than the cost of electricity supply. However, due to the decline in international fuel prices and Taipower's efforts to lower costs by adjusting the ratio of long-term contracts to spot market purchases, current electricity supply costs are lower than the year-start estimates. The average industrial electricity rate is now NT$3.81 per kWh, which is close to the supply cost. However, the residential electricity rate is still NT$2.77 per kWh, which is below the supply cost. Therefore, the additional NT$100 billion allocation is indeed to subsidize residential electricity prices.
A Taipower representative pointed out that war is an unforeseen and major event. As a result, Taipower's fuel expenses have reached NT$600 billion annually for two years in a row; this is double what it was before the Russia-Ukraine war. In response to rising fuel costs, many countries have substantially increased electricity rates. From 2020 to 2023, industrial and residential electricity rates in South Korea increased by 87% and 49%, respectively; in the UK, by 126% and 79%; and in France, by 139% and 37%. Compared to international trends, Taiwan's electricity rate adjustments have been relatively moderate and carefully managed, with residential electricity rates increasing by a total of only 7.1% over the past three years.
Using South Korea as an example, a neighboring country with a higher proportion of nuclear power, electricity rates there have been raised six times since 2022. Despite this, South Korea’s main electric utility (KEPCO) still incurred a loss of around NT$100 billion in 2023. If Taiwan's electricity rates were adjusted to match those of South Korea, electricity revenue would grow by an estimated NT$277.3 billion. Not only would this eliminate the losses altogether, it would in fact result in a surplus of approximately NT$30 billion.
A Taipower representative stated that the power industry’s financial stability is closely related to the public’s right to access electricity and the nation's economic development. In the past, electricity rate adjustments included subsidies to stabilize prices and support public livelihoods, vulnerable groups, and declining industries, meaning that government subsidies have in fact been benefits for the entire population. Taipower has also continued to enhance its financial and operational performance through avenues such as making improvements to fuel procurement, reducing operational costs, and revenue from this year’s electricity rate adjustments. A presentation at the TPP caucus press conference today also showed that, while expenditures from January to July in 2023 were NT$588 billion, the value for the same period this year has decreased to NT$510.3 billion. Revenue, which included NT$50 billion in post-pandemic subsidies, rose from NT$449.7 billion to NT$457.4 billion this year, even without subsidies. This demonstrates that Taipower's financial situation is gradually improving.
Spokesperson: Vice President Tsai Chih-Meng
Phone: (02) 2366-6271/0958-749-333
Email: u910707@taipower.com.tw
Contact Person: Department of Accounting Director Wang Yun-Chun
Phone: (02) 2366-7250/0910-027-427
Email: u091470@taipower.com.tw
