Under the dual pressure of international carbon reduction pressure and domestic industrial transition, Taiwan completed the legislation of Renewable Energy Development Act in 2009, the Greenhouse Gas Reduction Act in 2015, and started the electric power industry reform in 2016, in a hope to proceed to the transformation in industry, society and energy at the same time. The revision of the Electricity Act is regarded by the ruling party as a solution to "boost the economy". It is seen as the Government's priority to promote the Act. A successful and effective energy transformation or the revision of Electricity Act should ensure a stable supply of electricity and a fair competition in the electricity industry, as well as the mindset of environmental protection, social justice and the spirit of energy democracy, all of which should come into the discussion of the law-making, in order to shape our energy transformation blueprint, and then reflected in the revised framework of Electricity Act. To this end, there is an urgent need for close attention and discussion.

        Recently, the currently substantially revised version of Energy Act, which saw its seventh time in fifty years to enter the Legislative Yuan to be reviewed, takes only two days to pass committee review, revealing the ruling party’s determination to complete the legislation during this session. However, during the first review, most of the debates were focused on the version proposed by Executive Yuan and the other version by KMT; yet another version, more forward-looking and open, proposed by 50-odd DPP law-makers was almost abandoned, resulting in losing opportunities to cover more diversity and fullness in revision. On the basis of this, while Legislation Yuan decided to have an extraordinary session to continue the review, the Center makes the following three statements regarding the amendment to Electricity Act, to address the aspects of environment, society and democracy:

I. Environment Aspect: Internalization of environmental external costs should be a prerequisite for the revision of law in order to promote fair competition among the electricity industry.

        During the committee review, the Legislative Yuan decided to replace the original version, proposed by Bureau of Energy, of the "ration in energy portfolio" and "energy fund" with "Carbon Emission Coefficient for Electricity" as a measure to regulate environment, with the regulatory coverage extending from generation sectors to public retail sectors. However, the purpose of the "Carbon Emission Coefficient for Electricity" is to reduce greenhouse gas emissions rather than internalize external environmental costs. Furthermore, traditional fossil fuels or nuclear power have different footholds in electricity prices, compared to renewable energy power generation, because the external environmental costs of the first two categories of energy have not been internalized normally, making the price of nuclear power or thermal power remain lower than renewable energy. Even with the opening of power generation and retail sectors, renewable energy will still find it very hard to enter the market or lack of market competitiveness because its high retail price. Therefore there is need to internalize the external environmental costs of traditional fossil fuels and nuclear power generation in order to promote fair competition from the perspective of environmental protection.

II. Social Aspect: the deliberation in the parliament should consider the risk of energy poverty in the poor group and consider the problem of squeezing out the subsidy of retail electricity prices for them.

The object of receiving subsidy in retail electricity prices is more or less the same as before, and this is a very limited range. It does not take into account the increase in the electricity bill burden to the group with risk of energy poverty. Once the Electricity Act is amended, if the electricity price will increase and this will results in the higher expenditure in electricity bill; energy poverty risk groups may not be able to afford.

       The government should therefore conduct a comprehensive social impact assessment before the final amendment to identify the people at the risk of energy poverty and envisage response measures to reduce the socio-economic impact to them. In addition,

In current proposal, the budget for the subsidy of retail electricity prices is to be decided and entail by the corresponding authorities, which can potentially be budgeted out in the internal competition. Regarding this, it would be necessary for the parliament to coordinate with the Executive Yuan before the Second Reading on how to ensure the budget for this subsidy is protected against the competition and executed without impairment.

III. Democratic Aspect:  the deliberation in the parliament should make the chance for the public to participate in energy development and give local governments more autonomy.

The process of energy transition is difficult and requires public participation in decision-making; a collaborative approach of the public-private partnership can assist the Government in achieving the reform needed. The democratic procedures in energy transition allows people to engage in substantive participation and grant the full access to adequate information in this major public contention. The amendment to Electricity Act should consider the democratic participation of the procedures and organization; this can include a risk communication platform and a local government level devolution concerning the development of energy. This can facilitate public participation in the development of a local-condition oriented power generation, and the direct supply and sale of electricity in the locals.

The final statement is: the Center in 2016 has conducted the research program of Drive Energy Transformation Policy and Legal System, including the exploration of the possible directions of the amendment of Electricity Act. Workshops have been held and the participants consist of representatives 45 coming from industry, government, academics and civil society. The policy recommendation paper for the amendment to Electricity Act (please download via the following link) summarized the key points in the discussion and analysis in the workshops. It is hoped that the important aspects of the amendment of the act can be discussed and clarified at the moment of energy transition in Taiwan and this can promote the concern and discussion of the issue in society.

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