Businesses and households in Thailand are likely to pay higher electricity bills later this year as the power tariff is set to increase from 4.18 baht per kilowatt-hour (unit) during the cool season, says the Energy Regulatory Commission (ERC).
If the government wants to keep the tariff unchanged between September and December, it will need to allocate 28 billion baht for subsidies, the regulator said on Friday. It will also need to extend the period to pay back money it owes to the Electricity Generating Authority of Thailand (Egat) and PTT Plc, the country's major gas seller.
Egat and PTT were asked to help the government keep electricity prices down from September 2021 to April this year, but this incurred a 15-billion-baht debt, necessitating repayment to Egat and PTT, and caused Egat to run up a loss of 98 billion baht.
The need to reimburse creditors is a major factor driving up the power tariff, said Poonpat Leesombatpiboon, the secretary-general of the ERC.
ERC members met recently to determine the new power tariff, scheduled to take effect between September and December. The current 4.18-baht rate will apply until the end of August. Tariffs are reviewed every four months.
They came up with three tariff options, with increases ranging from 11-44%.
The power tariff comprises the base tariff, which covers the costs of power plants and distribution systems, and the so-called Ft, which reflects prevailing fuel prices, currency exchange rates and other expenses under government policies.
The base tariff and fuel prices remain unchanged in the three options, but they differ because of different amounts of money to be paid to Egat and gas sellers, said Mr Poonpat.
If the power tariff rises by 44% to 6.01 baht per unit, the debt owed to Egat could be cleared by December. An 18% increase, to 4.92 baht, would allow the debt to be cleared by the end of August next year.
In the third and cheapest option, an 11% increase to 4.65 baht would stretch the debt repayment period to August 2026.
Mr Poonpat said authorities also need to increase the power tariff because of the higher price of so-called Pool Gas, which is the weighted average for gas from the Gulf of Thailand, the Malaysia-Thailand Joint Development Area, Myanmar and imported liquefied natural gas.
Gas makes up 63% of fuels used for power generation in the country.
The Pool Gas price is expected to increase by 8% to 323 baht per million British thermal units (MMBTU), up from 300 baht, he said.
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