State-run Electricity Generating Authority of Thailand (Egat) says it is unable to shoulder more financial burdens until 2025 as it needs funds from electricity bills to help it deal with current losses of 136 billion baht.
This means the power tariff, which determines the rate for electricity bills, is likely to remain high for households and businesses for at least two more years in order to repay money to Egat.
"We have worked hard to manage the flow of our cash on hand, capital spending and debt repayment," said Boonyanit Wongrukmit, governor of Egat.
Egat recently requested a short-term loan of 110 billion baht, part of efforts to tackle its severe financial woes.
The authority is in the red after subsidising expensive electricity prices as part of a government policy helping people cope with the impact of the pandemic and the Russia-Ukraine war.
The government provided subsidies and discounts on electricity bills to ease the impact of the pandemic, which first affected Thailand in early 2020 and caused the country to impose lockdown measures to contain the virus.
The effort to control power bills continued when the Russia-Ukraine war erupted in February last year, leading to a surge in global oil prices.
Egat, together with the Finance Ministry and state electricity distribution arms Metropolitan Electricity Authority and Provincial Electricity Authority, jointly subsidised electricity prices, according to the Energy Regulatory Commission (ERC).
From September 2021 to December 2022, Egat alone provided the subsidies, plunging the agency into a loss of 150 billion baht.
Funds from electricity bills during the first four months of this year helped Egat reduce the losses to 136 billion baht as of April.
The current tariff rates, applicable from January to April, are 5.33 baht per kilowatt-hour (unit) for businesses, up 13% from the previous record high of 4.72 baht per unit, and 4.72 baht per unit for households.
The ERC initially planned to impose a single tariff rate of 4.77 baht per unit, scheduled to take effect from May to August, but businesses and the public complained about struggles to pay expensive power bills during the hot season.
On April 24, the commission resolved to reduce the rate to 4.70 baht per unit, following a recommendation by a subcommittee tasked to calculate the fuel tariff (Ft).
The Ft, which is determined based on fuel costs, is a key element in the power tariff, which is adjusted every four months.
The power tariff is also determined by money to be paid back to Egat.
The reduction of the rate to 4.70 baht a unit means the Egat payback period has been extended to two years and four months instead of two years, according to media reports. Energy users have to pay 0.35 baht per unit, part of the power tariff, to Egat from next month.