TAIPEI (Taiwan News) — A failed NT$100 billion (US$3.4 billion) bailout for Taipower may finally force Taiwan to confront its long-standing policy of keeping electricity prices artificially low, Business Today reported Friday.

The loss of funding adds pressure on the state-run utility, which has accumulated NT$451.4 billion in losses and faces growing challenges financing grid upgrades and new power development. Taipower’s debt ratio now stands at 93.9%.

Economics Minister Kuo Jyh-huei (郭智輝) warned that a rate hike is now virtually inevitable. A 5% increase affecting 14.5 million households and businesses is already under consideration for the second half of the year.

The electricity rate review committee skipped a price hike in March, hoping the legislature would approve emergency funding. With that hope dashed, a rate increase in the September review is now all but certain.

Taiwan’s electricity prices remain among the lowest in the industrialized world. Residential users currently pay NT$2.77 per kilowatt-hour, well below the actual cost of NT$3.93. Industrial users pay NT$4.27, compared to NT$5–9 in many other countries.

In contrast, Japan and South Korea have raised residential and industrial rates significantly since 2020. Taiwan’s lowest-tier households still pay NT$1.6 to NT$2.1 per kilowatt-hour — cheaper than a decade ago — despite surging global fuel prices.

Experts say reform is long overdue. Proposals include sharper tiered rates for heavy users, quarterly price reviews, and inflation mitigation measures.

With the September review approaching, the government faces a stark choice: take action now, or allow Taipower’s financial crisis to deepen.