TAIPEI (Taiwan News) — The government is expected to raise electricity rates by an average of 11% starting in April, with more than 90% of residential users seeing a 5% increase.

The Cabinet will convene the Ministry of Economic Affairs' electricity price review committee on Friday (March 22) and state-owned Taiwan Power Co. (Taipower) is expected to propose raising residential electricity rates for the first time in 20 years, reported CNA. The government will increase rates based on three tiers of residential consumers, three tiers of small business users, and four tiers of "super large users."

Taipower is under huge financial pressure and officials familiar with the matter told CNA that the Cabinet has decided to allocate NT$100 billion (US$3.13 billion) to the company, which will be funded through supplementary budgeting. The average adjustment will be capped at about 11%, rising from NT$3.11 to NT$3.45 per kilowatt hour.

According to the latest proposed rate adjustment plan, the increase for residential use will be lower compared to commercial use. Residential customers will be categorized into three tiers: those consuming less than 700 kWh per month will see a 5% increase, 701 to 1,000 kWh users will see a 7% increase, and use exceeding 1,001 kWh will result in a 10% increase.

Small businesses will be classified into three tiers: small commercial customers using less than 1,500 kWh will see a 5% increase, businesses using between 1,501 and 3,000 kWh will see around a 7% increase, and users exceeding 3,001 kWh will see a 10% increase.

Taipower data shows approximately 12.5 million households consume less than 700 kWh, accounting for 93% of total homes. These homes will see their electricity bill increase by NT$0.7 per day.

Approximately 580,000 households use between 700 and 1,000 kWh (4% of total households) and around 320,000 households consume over 1,000 kWh (2% of total households). For small commercial customers, there are approximately 760,000 consuming less than 1,500 kWh (84% of total), 100,000 consuming between 1,501 and 3,000 kWh (10% of total), and 50,000 consuming over 3,001 kWh (6% of total).

Meanwhile, 57,000 industrial users that are increasing electricity consumption will see rates increase by 14%. Industrial users who have reduced power usage by less than 10% will experience a 12% increase, while ones who have reduced power usage by more than 10% will have rates increased by 7%.

The average increase for residential consumers will be 6.8% and 13.5% for industrial users. This translates to an increase from NT$2.65 to NT$2.8 per kWh for residential consumers and from NT$3.38 to NT$3.85 per kWh for industrial users, which is still lower than South Korea's industrial electricity rate of NT$4.53 per kWh.

A separate category, "super-large users," will have four tiers. The lowest tier includes businesses with annual consumption between 500 million and 5 billion kWh, which will experience a 15% increase if they have had two consecutive years of electricity usage growth.

This lowest tier includes entities such as Taiwan High-Speed Rail, Taiwan Railways Corporation, semiconductor makers, and memory manufacturers. The highest tier applies to companies with consumption exceeding 150 billion kWh annually, subject to a 25% increase. Only Taiwan Semiconductor Manufacturing Co. (TSMC) falls into this category.