Electricity bills are unlikely to become more expensive later this year as authorities plan to manage power tariffs to avoid increasing the financial burden on people amid a sluggish economy, says Energy Minister Pirapan Salirathavibhaga.
Speaking during a live broadcast via social media on Wednesday night, Mr Pirapan said the government is working on adjusting the tariff, scheduled to take effect from September to December, adding that gas prices would largely determine the new rate.
The power tariff, which is used to calculate electricity bills, is 3.98 baht per kilowatt-hour (unit) at present. This rate is applicable until the end of August.
“The new rate is expected to be on par with or slightly lower than the current rate,” the minister said.
The government is preparing measures to deal with liquefied natural gas (LNG) price fluctuations after the 12-day Israel-Iran war last month. These fluctuations often lead to more expensive electricity bills.
The Israel-Iran conflict ended with a ceasefire after the United States bombed Iran’s nuclear sites. It caused LNG prices in the spot market to rise by 10% for a short period before they returned to normal after US President Donald Trump announced the ceasefire.
Gas makes up around 60% of the fuels used for power generation in Thailand. The country needs to import LNG, mainly from the Middle East, as domestic gas supply is declining.
If the war escalates and Iran resorts to closing the Strait of Hormuz, a key oil and gas shipping lane, LNG transport from the area may be disrupted.
Mr Pirapan said he aims to reduce the power tariff by adjusting the country’s two gas pools to better manage gas supply for the power and manufacturing sectors.
The two pools are referred to as Gulf Gas and Pool Gas. Gulf Gas is the weighted average price of natural gas from fields in the Gulf of Thailand and Myanmar. Gulf gas is cheaper than Pool Gas, which refers to the weighted average wellhead price of gas from the Gulf of Thailand, Myanmar and imported LNG.
Better management of these pools would enable power producers to gain more access to cheaper gas sources, the Ministry of Energy noted earlier.
In the long term, Mr Pirapan is looking for ways that will authorise him to put a brake on the signing of new power purchase agreements (PPAs) between the government and companies as more contracts would increase electricity generation costs.
“More PPAs will incur more costs,” he said, referring to the availability payment that commits the government to pay for electricity throughout an entire period under a PPA, even though actual usage may be less than specified in the contract.
Thailand’s power generation capacity is currently 55,000 megawatts, more than sufficient to serve demand, which usually ranges from 25,000 to 26,000MW, rising to a peak of around 36,000MW in the hot season during April and May.
Opposition politicians and independent analysts have been heavily critical of energy policies that have led to Thailand having an electricity surplus of more than 30% — double the 15% considered adequate for system reliability.