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The Impact of Current Changes in Crude Oil Prices Requires Continued Observation The Electricity Tariff Examination Council Decides to Keep the Average Electricity Tariff Stable
Date: 2021-05-05
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The Ministry of Economic Affairs (MOEA) held the first 2021 Electricity Tariff Examination Council meeting on 26th March, reviewing and confirming the various costs and reasonable return of the retailing utility enterprise in accordance with the "Calculation Formula for Electricity Price of Electricity Retailing Utility Enterprise" in the first half of 2021. Due to the gradual recovery of global demand and the recent decline in supply resulted from the Texas winter storm, crude oil prices have lately experienced drastic fluctuations. The impact of such fluctuations needs to be monitored continually. Based on the policy principle of stabilizing the electricity tariff, the Examination Council, therefore, decided to keep the electricity tariff unadjusted at NT$ 2.6253/kWh.

According to the "Calculation Formula for Electricity Price of Electricity Retailing Utility Enterprise," electricity tariff is regularly reviewed twice a year, which are normally implemented the revised result in April and October; moreover, the maximum price adjustment is limited to 3% at a time. The MOEA states that fuel costs play a critical role in electricity price. In addition to crude oil prices, coal prices have also increased gradually recently. Despite such increase, it is still necessary to continuously monitor the status of the COVID-19 epidemic around the world as well as the recovery of global demand in order to determine whether the rise in fuel price is a long-term trend. Furthermore, the Examination Council also pointed out that the government should prepare for increased cost of electricity due to changes in energy structure. Considering that the latest suggestion of electricity price adjustment proposed by Taipower is not significant, and taking into account the administrative cost of electricity price adjustment, the Examination Council has decided to keep the electricity price unchanged for now. The impact of changes in power generation structure on electricity prices will also be considered while reviewing fuel costs at the next (September) examination meeting.

Furthermore, the Examination Council prioritizes the importance of the level of electricity price stabilization fund balance to the stability of commodity price. Within reasonable range of official return rate based on the electricity price formula, it has been approved that Taipower's surplus in 2020 exceeded the reasonable profit by NT$ 13.7 billion. The surplus has been included in the electricity price stabilization fund, increasing the balance to NT$ 24.4 billion.

Based on the information disclosure principle, the 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 on March 26th. Starting from April 5th, 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 of Electricity Tariff Examination Council and costs from Taipower.

Spokesperson for Bureau of Energy, Ministry of Economic Affairs: Deputy Director General, Chun-Li Lee
Phone Number: 02-2775-7700
Mobile: 0936-250-838
Email: chunlee@moea.gov.tw

Business Contact: Director, Chih-Wei Wu
Phone Number: 02-2775-7750
Mobile: 0922-339-410
Email: cwwu@moea.gov.tw
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