The Energy Regulatory Commission (ERC) decided recently to impose a single electricity bill rate during May to August.
This will make electricity bills cheaper for businesses but more expensive for households and will come as particularly unwelcome news during the ferocious heat of the summer we are experiencing now.
The new rate will be 4.77 baht per kilowatt-hour, which is lower than the current rate charged to businesses during January to April at 5.33 baht per unit, but an increase from 4.72 baht per unit for households.
The ERC conducted online surveys from March 10–20 to gather opinions in support of its decision.
However, the move has come under heavy criticism for favouring the industrial sector, as the revised rates will enable businesses to save 10% on their bills while households will face a 1% increase in electricity fees.
The underlying factor is the rise of the "fuel adjustment tariff", known as Ft, by 5% during the May–August period, while the Ft associated with power use by industry is expected to dip by 30%.
The government and ERC justified the higher Ft rate for households from May to August by saying it had already provided a 3.2-billion-baht subsidy for vulnerable groups -- such as low-income earning groups and households consuming electricity less than 300 units.
Despite a steady decline in the price of liquefied natural gas (LNG), which is used to calculate the cost of electricity, the ERC continues to use an outdated LNG cost of around US$20 per million BTU instead of the current rate of US$13 (443 baht).
This move is said to be motivated by the government's desire to maintain a higher fuel tariff (Ft) to help repay debts owed to the Electricity Generating Authority of Thailand (Egat), but has drawn criticism for favouring financial interests over consumer savings.
Another factor contributing to the increase in power bills involves dubious demand forecasts, which seem to create the impression the country needs more power plants, despite the fact it is facing an oversupply of electricity reserves.
This leads to more power projects and more pay for Egat -- the sole electricity buyer in the country. In February, Thailand had an installed power capacity of 49,145 megawatts. Actual consumption during peak demand in April last year was 33,177MW, which means the country has a surplus capacity of about 48%.
However, the ERC said the surplus is actually only 30% according to a standard of 15% because not all power plants can operate 24/7, so their maximum capacity cannot be fully utilised for calculation.
While the surplus capacity level is always debatable, the fact remains that while the country has surplus capacity, the ERC recently announced winning bids for new renewable power projects with a total capacity of 4,800MW.
On March 20, Egat inked a deal to buy electricity from the 770-MW Pak Lay dam co-invested by Thai and Chinese companies to be built on the Mekong River in Laos' territory.
More projects are in the pipeline. Several power operators in the country have become billionaires as they are guaranteed high profits by the government and Egat while consumers bear the brunt of the burden.
The method of calculating electricity costs and power demand projections and capacity increase plans must be revamped to ensure fairness and transparency. The government must prioritise the interests of households while also ensuring the sustainability of industry.
