Thailand: New electricity rates in the pipeline for next year

Thailand: New electricity rates in the pipeline for next year

A new base factor and fuel tariff (Ft) rates used to calculate electricity
bills for the next five years (2018-22) are due to be announced early next
year, according to the Energy Regulatory Commission (ERC).

Spokesman and commissioner Veeraphol Jirapraditkul said the base factor
needs to be revised because of the recent changes in the country's power
generating structure.

The ERC has two categories of power calculation: the base factor, which is
revised every five years, and the Ft rate, which is adjusted every four
months.

The base factor is currently based on capital expenditures on power
generating system, transmission facilities and distribution sector, mostly
from fossil base power generation.

Besides, the three major state power utilities, of the Metropolitan
Electricity Authority, the Provincial Electricity Authority and the
Electricity Generating Authority of Thailand, now issue power bills
separately for their respective consumers.

The ERC's recent move to standardise the utility authorities' methods of
electricity bill calculation to make them simpler and more transparent is
one reason for the revision.

The move would also cut excessive spending as well as make power bill
calculations simpler and more acceptable, Mr Veeraphol said.

The rise in power reserves is another factor that led the ERC to revise the
power bill calculation in order to reflect the real power costs.

Thai power reserves are expected to rise to more than 30% of the total power
generating capacity over the next five years, double that of a World Bank
forecast.

Previously, the energy policymakers planned the power generating capacity to
rise in line with the country's economic growth.

However, unexpected political and economic turbulence over the past several
years had dragged down growth, pushing the power reserves to outpace their
target.

Excessive power reserves means increased generations costs that have to be
absorbed by consumers.

"But the new power rate will not create a big burden on households, compared
with business operators, especially the big ones," said Mr Veeraphol.

Another reason cited by Mr Veeraphol for the power bill revision was the
rising renewable energy costs over the past few years, as the cost of
renewable power is relatively higher than fossil-generated power.

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Link to Original Article:
http://www.bangkokpost.com/business/news/1316663/new-electricity-rates-in-th
e-pipeline-for-next-year

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John Diecker
APT Consulting Group Co., Ltd.

www.aptthailand.com