No More Peak in Power Use?Lower Electricity Sales in July and August

The sweltering summer season is usually the peak period for power use, and reports of new record highs are common. But Taipower's latest figures indicate that electricity sales for July and August this year were 7.2% less than for the same period last year. The message behind these initial figures is that the new discount incentives introduced with the rate adjustment in July have resulted in energy saving efforts.

In reaction to soaring petroleum and natural gas costs, Taipower announced on July 1 a phase-in of price hikes; the first phase being an increase by 12.6%, or one fourth of the target increase of 50.4%. This year's average summer rate was NT$2.4 per kilowatt-hour.

But to allow for the daily needs of the people, the government changed the original four-tier power pricing plan to a five-tier one; the higher the electricity use, the higher the apportioned cost. At the same time, the government instituted a billing discount program as an incentive for energy conservation: if the bimonthly average of daily power consumption for households, elementary schools and junior high schools is less than the same period the year before by 10% or more, they enjoy a discount of up to 20%. Thanks to this incentive, not only did Taipower's overall electricity sales drop, but the power consumption of non-profit entities fell by a whopping 9.1%, while that of for-profit organization dropped by 4.1%.

The government is feeling the pinch. Electricity rates have jumped, yet the bills paid by many households have dropped. Taipower's electricity revenues have also fallen by 0.2% versus the same period last year, paradoxically making it one of the victims of the rate hikes. It's projected that Taipower will post losses of more than NT$110 billion this year, and pay no profits to the treasury.

The price increases are greater for commerce and industry, because they bear higher rates for energy use. Faced with the impending second phase of rate hikes on October 1, companies have been lobbying in droves for a postponement of the hikes. But the government has taken the end of peak summer prices into account, so the impact should be low; therefore the planned rate adjustment will be adhered to.

Subsequent rate hikes may be unavoidable, so in the interests of our pocketbooks, we should keep energy conservation and a smaller carbon footprint in mind.

Taipower Electricity Sales

 (Jan-Aug 2008)

1: Power unit: 100 million kWh
2: The percentages shown are in comparison to the same period in 2007.
source: Taipower