After the Ministry of Economic Affairs announced recently that electricity subsides will be given to local residents in January next year, some officials have voiced their disapproval of the policy.
As oil prices come down, a total of NT$9 billion will be saved, the government said. The newly appointed Economics Minister (鄧振中) said a utility subsidy plan will be finalized before Jan. 1, 2015. Up to 1,291 households and small shops will benefit from the plan. Each of them will receive more than NT$750 on average.
Although it is right to give back to the public, the decision makes little business sense, given the exceedingly high level of debt incurred by the Taiwan Power Company (Taipower, 台電), said Tu Tze-chen (杜紫宸), head of the Industrial Technology Research Institute’s Knowledge-based Economy and Competitiveness Research Center.
Taipower’s debt totaled NT$208.6 billion. The company is expected to profit NT$20 billion in 2014, ending an eight-year losing streak. However, it will have to do so for 10 straight years before it can pay off all the debt.
Many argue that Taipower should apply all the newly found margin on paying off debt instead of distributing it to the public too soon.