Debt-ridden Electricity Authority of Thailand (Egat) cannot yield to any further requests for cheaper electricity bills in the next four-month cycle as this would affect its future investment in the power infrastructure.
Its accumulated loss, which accrued after Egat subsidised power bills from September 2021 to May 2023, is projected to decrease to 135 billion baht at the end of this month, according to the Energy Regulatory Commission (ERC).
With the new power tariff rate of 4.45 baht per kilowatt-hour (unit), applicable between September and December this year, Egat would clear its loss within April 2025.
The power tariff is used to calculate electricity prices. Part of the money will reimburse Egat.
"Egat needs to repay its debt which increased to support the subsidy programme," said Boonyanit Wongrukmit, governor of Egat.
Egat agrees with the new tariff rate recently approved by the ERC but would not be amenable if the business sector were to request a further cut, which would mean that the authority would take a longer time to settle its debt.
"We shouldered the financial burden to help reduce the cost of living following the global surge in energy prices, driven by the impact of the Russia-Ukraine war," said Mr Boonyanit.
"We've gradually paid back two instalments and have only five instalments to go in order to clear all debt within April 2025," he said.
Costly electricity bills were blamed for causing entrepreneurs to raise the prices of their products late last year, eventually increasing the cost of living.
If electricity prices are reduced, businesses can better deal with operating costs and Thailand would be more attractive as an investment destination, the Federation of Thai Industries said earlier.
Households and businesses currently pay 4.7 baht per unit, applicable from May to August.
During the first four months of this year, businesses paid 5.33 baht per unit, up 13% from the previous record high of 4.72 baht per unit, while households paid 4.72 baht per unit.
Mr Boonyanit said the 4.45-baht rate is acceptable and will help Egat avoid an unpleasant impact on its future investment.
"If we keep extending the payback period, it will affect our cash flow and credit rating, which could lead to higher loan rates," he said.
"This will impact on our investment in power transmission expansion, eventually affecting the energy security in the long run."
Mr Boonyanit was speaking during his visit to the 300-megawatt Victorian Big Battery, the largest energy storage system in Australia, which plays a key role in reducing electricity prices in Victoria.
Egat is also piloting similar energy storage facilities -- Bamnet Substation in Chaiyaphum and Chai Badan Substation in Lop Buri, with combined capacity of 37 megawatt-hours.