Taiwan's Electricity Pricing Mechanism and Taipower: The 12.83% That Did Not Rise, Replaced by a NT$71.1 Billion Supplementary Budget

30-second overview: On September 18, 2026, the Ministry of Economic Affairs convened the 115th Year, 2nd Electricity Rate Review Committee, which decided to hold electricity prices steady from October through December. Taipower's review calculated a necessary adjustment of 12.83%, raising the average rate from NT$3.7823 to NT$4.2675 per kilowatt-hour. The increase was not rejected—only deferred to the 3rd committee meeting in December—while the government first sought a NT$71.1 billion supplementary budget.

Keywords: electricity pricing, Taipower, Electricity Rate Review Committee, supplementary budget, energy

The Afternoon the Meeting Adjourned

On the afternoon of September 18, 2026, the Ministry of Economic Affairs convened the 115th Year, 2nd Electricity Rate Review Committee. At the post-meeting press conference, Vice Minister Lai Chien-hsin announced the conclusion: electricity rates would remain unchanged from October through December, with the rate adjustment decision "deferred," to be revisited at the 3rd committee meeting in December alongside transmission and distribution fee rate review, with any new rates taking effect January 1, 2027.¹²³

A set of figures lay on the table. According to Taipower's rate review, the necessary adjustment was 12.83%, raising the average rate from NT$3.7823 to NT$4.2675 per kilowatt-hour—an increase of NT$0.4174 per unit. The ministry noted that if calculated at a reasonable profit margin of 5%, Taipower could expect to earn an average of NT$7.75 billion per month over the following three months.¹

This set of figures was not rejected—only left on the table. The committee's priority was a different sum: a NT$71.1 billion government subsidy to Taipower, which would require legislative approval of a supplementary budget.¹²

Behind One Electricity Bill Stands a Company That Advances Its Own Costs

To understand the four words "deferred decision," one must first examine Taipower's profit-and-loss statement for this year. In fiscal year 2025, Taipower posted a pre-tax profit of NT$75.6 billion, ending three consecutive years of losses—a fact Chairman Tseng Wen-sheng and General Manager Kuo Tien-ho reported to shareholders at the June shareholders' meeting.⁴⁵ At that time, the company's public position was that stabilizing international fuel prices, combined with cost controls, would contain this year's losses.

Then the Middle East conflict disrupted the plan. According to the ministry, after the conflict erupted, international oil prices fluctuated between US$68 and US$132 per barrel. To stabilize domestic prices, Taipower continued absorbing fuel costs, absorbing approximately NT$71.1 billion from March through August. As of the end of July, Taipower had posted losses of NT$21.4 billion for the year; based on current international energy price volatility, full-year losses are projected to exceed NT$71.1 billion.¹² In other words, losses over the remaining five months could expand by another NT$50 billion, averaging over NT$10 billion per month.¹

Taipower Vice President Wang Yun-chun added two reasons at the post-meeting briefing: as of July, electricity industry natural gas costs continued to rise, and in subsequent months, off-peak electricity rates would resume, reducing sales revenue while fuel costs climbed, causing losses to widen in the remaining months.¹

Source: Central News Agency, September 18, 2026; Taipower 2026 Shareholders' Meeting (Cnyes, Economic Daily News, June 26, 2026)

How That 12.83% Was Calculated

Electricity pricing is not a figure the Executive Yuan can announce at will—a formula stands in front of it. Under Article 49 of the Electricity Act, retail electricity prices are set by the central competent authority. The current published "Public Electricity Utility Rate Calculation Formula" was announced and implemented by the Ministry of Economic Affairs on November 6, 2017.⁶ Under this formula's review and adjustment mechanism, electricity rates are reviewed twice annually, with increases and decreases generally not exceeding 3% per adjustment. However, when power supply costs rise or fall sharply and continuously, the Electricity Rate Review Committee may, considering the operation of the electricity price stabilization fund, make appropriate adjustments to the rate increase.⁷

Thus the 12.83% figure is the result of Taipower inserting fuel costs, exchange rates, and power generation and procurement structure into the formula. Whether and by how much rates can rise is left to the committee to decide. At the September 18 meeting this year, the committee reviewed Taipower's cost control measures and found the relevant expenditures reasonable. Lai Chien-hsin conveyed the committee members' assessment: absent the Middle East conflict this year, Taipower would have had the opportunity to maintain profitability and gradually strengthen its finances. However, the conflict continues, international oil and gas prices fluctuate sharply, so committee members believed the government should prioritize providing a subsidy to reduce Taipower's financial pressure.¹

Source: Central News Agency, PTS News, September 18, 2026; Ministry of Economic Affairs Energy Bureau Electricity Rate Review Committee press release

From NT$2.6253 to NT$3.7823

This mechanism was last substantially tested in 2022, when the Russia-Ukraine war pushed fuel prices higher. On March 29, the committee decided to "revisit at a later date," setting a temporary meeting period of 2–3 months. At the June 27 interim meeting, the first tiered increase was implemented: residential users consuming 1,000 kWh or less per month, small shops, and low-voltage users saw no change; residential consumption above 1,001 kWh rose 9%; high-voltage and above users rose 15%. Agriculture, fisheries, food, department stores, restaurants, cinemas, fitness centers, and high schools and below were exempted.⁷

The 2nd committee meeting in September that year made no further rate changes, maintaining an average of NT$2.8458 per kilowatt-hour, while the government planned to allocate NT$150 billion for capital injection into Taipower.⁷ The March 2023 committee meeting set the average electricity rate increase at 11%, with residential consumption of 700 kWh or less unchanged; September maintained NT$3.1154 per kilowatt-hour without change.⁷

The turning point came at the March 22, 2024 committee meeting. A report from the Legislative Yuan Budget Center recorded the figures faced at that time: in fiscal years 111 and 112, Taipower's per-kilowatt-hour losses were NT$1.2 and NT$0.9 respectively, and accumulated losses in year 112 had reached NT$382.6 billion. Against such a balance sheet, the committee, on the premise of "NT$100 billion government subsidy," decided to raise the overall average electricity rate to NT$3.4518 per kilowatt-hour, effective April 1, with three accompanying resolutions, including one requesting Taipower to review the reasonableness of user classification provisions.⁷

This year's rhythm returned to the familiar pattern: the 1st committee meeting on March 27 decided not to adjust, maintaining an average of NT$3.7823 per kilowatt-hour,³⁸ and the 2nd meeting on September 18 deferred the decision, with the 3rd meeting in December to review transmission and distribution rates, international energy prices, government subsidies, and Taipower's finances together.¹³

Source: Legislative Yuan Budget Center "Domestic Electricity Rate Adjustments Over the Past 5 Years" (August, Year 113); PTS News, March 27, 2026

Source: Legislative Yuan Budget Center report, Ministry of Economic Affairs Energy Bureau press release, Central News Agency, September 18, 2026

Who Advances the Cost, and What Difference It Makes

Arranging the three approaches side by side reveals the pattern: in 2022, the government allocated NT$150 billion for capital injection into Taipower; in 2024, it was an 11% increase on the premise of NT$100 billion subsidy; in 2026, the government first seeks NT$71.1 billion in supplementary budget, leaving the 12.83% increase to be discussed again in December.¹⁷ The common thread across all three approaches is: the deficit does not disappear, only the accounting entry changes—the price increase is recorded on users' electricity bills, capital injections and subsidies on the government's budget, and the time difference between the two falls on Taipower's profit-and-loss statement.

At the September 18 meeting, committee members also discussed an alternative cost-sharing approach: raising rates only for AIDC (AI data centers) and high-tech industries. Lai Chien-hsin conveyed that the committee believed a comprehensive review should be conducted rather than targeting one segment first, because different needs and industrial development opportunities must all be considered.¹

During the same period, the ministry made decisions on other energy prices: residential natural gas and bottled liquefied petroleum gas were frozen through year-end, with the same rationale of stabilizing prices.² As for rumors that "electricity rates are definitely going up," a fact-checking platform had already clarified in September: the committee's decision was to defer adjustment; the circulating 12.83% and NT$4.2675 per kilowatt-hour were discussion items in the meeting, not settled policy.⁹ This distinction is worth remembering—"what Taipower's review calculated" and "what the committee ultimately decided" are two different figures at two different positions in this mechanism.¹

The Table in December

Only three things are certain going forward: a 3rd Electricity Rate Review Committee meeting will be held in December to review transmission and distribution rates,³ if an adjustment is made, new rates take effect January 1, 2027,¹ and before then, whether the NT$71.1 billion supplementary budget passes depends on a legislative vote.¹

For a household or small shop, the most practical part of this story is: electricity bills through December will look the same as in March, and what next year's bill looks like depends on a December meeting and a legislative vote finishing first. Taipower continues absorbing costs during this period, while the formula and committee continue separating "how much should it rise" from "should it rise at all" into two steps—precisely the design the 2017 formula left behind, and why every electricity pricing dispute over these years returns to the same picture.⁷⁶

Further Reading:

• Taiwan's Oil Pricing Mechanism and CPC: The NT$36 Saved, First Recorded Under a State-Owned Enterprise Standing in Front — The same "state-owned enterprise absorbs first, later compensated by budget" design, applied to petroleum products.

References