Newsletter
BASIC CHARGE PLANNED FOR ELECTRICITY AND NATURAL GAS
The Fair Trade Commission (FTC) recently resolved to ask the government agencies regulating rates of public utilities to replace basic meter readings with basic rates in the computation of gas and electricity utility charges, so as to comply with the principles of marginal cost pricing and payment by users. The change is proposed on the premise that public utility revenues would not increase as a result.
An FTC survey found that basing utility charges on basic meter readings tends to cause users to waste resources in order to use up their basic consumption. Under a basic rate system, on the other hand, consumers would be charged purely for their consumption, and fixed costs and energy costs would be separately calculated. The FTC believes that the viability of replacing basic meter readings with basic rates is borne out by Chunghwa Telecom's experience in setting basic rates.