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FRIDAY, December 08, 2023

Business associations succeed in lowering rise in power price

Business associations succeed in lowering rise in power price
THURSDAY, December 29, 2022

The cost of electricity for businesses will not rise as much in January as proposed earlier this month, following an intensive and coordinated effort by Thailand’s largest business associations to prevent what they described as a crippling rise in the fuel tariff (Ft) rate.

The Energy Regulatory Commission has approved a decision by the Electricity Generating Authority of Thailand (Egat) to reduce a rise in the Ft rate during the first quarter of next year, commission secretary-general Komkrit Tantravanich said on Thursday.

Komkrit said the commission made the decision at a meeting on Wednesday.

The Ft rate is determined by the cost of fuel used for generating electricity and the cost of buying power from private generating plants.

Komkrit said Egat asked his commission to review the new Ft rates in light of fluctuations in the prices of natural gas and diesel, as well as exchange rates. The accumulated debt of Egat was also a factor considered.

Komkrit said the commission on Wednesday approved an Ft rate for non-household electricity of 154.82 satang per unit (100 satang is one baht). This was a 35.52 satang reduction from the Ft rate of 190.44 satang per unit approved on December 14.

The reduction from the December 14 proposed rate for non-household electricity lowers the per unit rate to 5.33 baht from the proposed 5.69 baht per unit, from January to April, Komkrit said.

The commission also approved Egat’s proposal to maintain the Ft rate for household electricity use at 93.43 satang per unit, keeping the power rate for households at 4.72 baht per unit during the same period.

On December 14, the ERC decided to raise the Ft rate for non-household use by 97.01 satang to 190.44 satang per unit, which would result in a power rate for non-household use of 5.69 baht per unit – an increase of 21%.

The ERC’s decision sparked a backlash from businesses, which argued that a rise in the cost of electricity would undermine their profitability and competitiveness when they had yet to fully recover from the pandemic.

The Joint Standing Committee on Commerce, Industry, and Banking held a press conference earlier this month at which leaders of the country’s largest business associations appealed to the government, as well as Prime Minister Prayut Chan-o-cha, to delay the proposed rate hike, saying it could damage members of their associations as well as the country’s economy.