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.