Energy activists and politicians have expressed reservations about a decision by an Energy Regulatory Commission (ERC) subcommittee to cut the electricity rate from May to August, saying it does not address the real cause of expensive power bills.
The subcommittee on Friday approved the fuel tariff (Ft) rate adjustment, which reflects changes in fuel costs and other variables. The full ERC board will vote on the proposal on Monday.
The recommended adjustment would reduce household electricity bills by 1.5% to 4.70 baht per kilowatt-hour (unit) from 4.77 baht planned earlier, from May to August. The move follows complaints from the public about large spikes in their electricity bills during the hot summer months.
A Ministry of Energy source who wanted to remain anonymous said the ERC panel made its recommendation after the Electricity Generating Authority of Thailand (Egat) proposed a 28-month moratorium on debt repayments.
The Ft, a key element in the power tariff, is reviewed by the ERC subcommittee every four months. Power tariffs are also determined by debts owed to Egat, which posted an accumulated loss of 150 billion baht after subsidising electricity prices from September 2021 to December 2022.
Rosana Tositrakul, an energy advocate and former Bangkok senator, said the pricey power bills are caused by the cost of liquefied natural gas (LNG) imports.
She said Egat had bought 70% of its electricity from a private company while it has produced only 30%. Egat buys electricity from a private company at 3-9 baht per unit and resells it to the Metropolitan Electricity Authority and the Provincial Electricity Authority at 2.75 baht per unit, she said.
"If Egat produces more electricity, people can use electricity at cheaper rates," she said.
Ms Rosana said that under the contract made with the private company, the government has to make availability payments to the company regardless of whether electricity is produced or not.
This has led to a debt of 40 billion baht and a payment of more than 100 billion baht to buy electricity. In total, Egat runs a debt of about 150 billion baht, which has become the Ft rate, she said.
"When Egat buys expensive electricity but sells it at cheap rates, the accumulation of debt follows, and Egat and consumers have to shoulder the expensive costs while the private sector reaps the profits," Ms Rosana said.
"The ERC is expected to cut the electricity bill rate from May to August, after which the rate will go up again; otherwise, Egat will have no money to repay debts.
"No one engages in a policy of buying expensive and selling cheap. This raises suspicion about alleged irregularities."
Chartpattanakla Party leader Korn Chatikavanij said the government must scrap the Ft rate for the four months to solve the steep bills. He said Egat's production costs have declined as the price of LNG keeps going down and suggested that the government overhaul the structure of the electricity production industry.
"The government needs the political courage to overhaul the structure and liberalise the sector by allowing people to invest so we don't have to rely on big businesses and state enterprises to build large power plants," Mr Korn said.
