Amid ongoing conflict in the Middle East, Taiwan's Ministry of Economic Affairs (MOEA) convened an electricity price review committee on March 27. Taking into account the need to stabilize consumer prices, the committee decided not to adjust electricity rates, keeping the average price at NT$3.78 (approx. US$0.12) per kilowatt-hour (kWh).
Taiwan Power (Taipower) president Yao-ting Wang stated in a post-meeting press conference that since the outbreak of the US-Iran war on February 28, two major uncertainties remain unclear: the extent of fluctuations on international fuel prices and the duration of the conflict's impact. He added that they will continue to closely monitor the situation.
It is understood that Taipower proposed an adjusted electricity unit price of NT$3.85 per kWh based on its electricity pricing formula, representing a 1.79% increase. MOEA deputy minister Chien-hsin Lai emphasized consumer prices are highly sensitive to cost changes, and even slight changes in electricity rates can have a significantly impact on prices. Stabilizing prices was therefore the primary consideration, leading to the decision to not raise electricity rates.
As for how sharp fluctuations in international fuel costs due to the conflict will affect Taipower's financial position, Lai explained that the company has benefited from the 2025 electricity rate increase, generating some profits and enhancing overall operational flexibility. Although this has not fully offset its accumulated losses, it now has greater resilience to absorb the impact of volatility in global energy prices.
Lai said that fuel costs are the primary factor in electricity rate adjustments, but such costs can change rapidly, as statements from both sides of the conflict can trigger sharp short-term fluctuations in international fuel prices.
Lai pointed out that if the conflict ends within three months, the average gas price would only be slightly higher than the 2026 budget estimate. This would result in a relatively limited impact on Taipower's finances and reduce pressure to adjust rates in October.
According to Taipower's 2026 budget submitted to Taiwan's Legislative Yuan, natural gas was priced at NT$15.79 per cubic meter and the price of oil was around US$76.5 per barrel. Taipower vice president Yun-chun Wang added that with so many variables at present, it is difficult to estimate the US-Iran war's full financial impact on the company.
There are currently no plans to convene an extraordinary meeting to adjust electricity prices. However, Wang noted that, in accordance with regulations, the next rate review committee meeting is scheduled for September.
Currently, coal-fired power accounts for roughly 30% of Taiwan's energy mix. Taipower stated that since the outbreak of the US-Iran conflict, coal prices have risen by 20% to 30% per ton. Compared with natural gas, there has been a smaller impact on the cost of coal-fired power generation. Given that natural gas accounts for a larger share of power generation, the overall cost impact remains more uncertain.
Taipower highlighted that the biggest unknowns at present are the duration of the war and cost expenditures. With fuel prices changing daily, it is difficult to provide an accurate assessment of its financial position at this time.
Concerns have been raised about whether Taipower has modeled extreme scenarios and the risk of large-scale losses if the war is prolonged. Yao-ting Wang estimated that the likelihood of such extreme scenarios is very low.
Regarding potential disruptions to Taiwan's energy imports, Lai said that natural gas supplies are secure through May 2026, with most alternative gas sources in June coming from non-Middle East regions. Additionally, CPC signed a new contract with the US' largest liquefied natural gas (LNG) exporter on February 10. Originally scheduled for July deliver, it has now been advanced to June, ensuring stable domestic natural gas supply from April to June.
Article translated by Eifeh Strom and edited by Joseph Chen
