Power bills set to rise in final four months

Households and businesses are bracing for higher electricity bills in the final four months of this year as the Energy Regulatory Commission (ERC) has announced a sharp increase in the fuel tariff (Ft), which is expected to jump nearly fivefold from 0.16 baht to 0.94 baht per kilowatt-hour, driving overall power tariffs upwards.

ERC secretary-general Poonpat Leesombatpiboon explained that the increase is driven by a projection of rising fuel costs and the need to reimburse the Electricity Generating Authority of Thailand (Egat) for billions of baht spent on past electricity subsidies.

Egat is owed 31.2 billion baht, and part of the new tariff structure is designed to gradually settle this debt.

At present, the power tariff stands at 3.95 baht per unit and will remain in place until the end of August, after which new rates will be introduced.

The Ft is recalculated every four months to reflect changes in fuel prices, electricity imports, foreign exchange rates, and policy-related expenses, including the need to pay back money to Egat.

Mr Poonpat said rising fuel costs are being driven by "Pool Gas", the weighted average price of natural gas from the Gulf of Thailand, Myanmar, and imported liquefied natural gas.

He noted that the rate is projected to climb 8% to 375 baht per million British thermal unit (mmBtu), up from 347 mmBtu in the previous period.

To ease the burden on consumers, the government has temporarily curbed electricity prices by tapping unused budgets from state electricity agencies and postponing payments to Egat.

However, the ERC is now seeking public input on four proposed tariff options, ranging from 3.95 to 4.73 baht per unit.

Each option carries the same base tariff of 3.78 baht per unit, with differences arising from the Ft.

The highest option would raise the tariff to 4.73 baht per unit, with Ft increasing to 0.94 baht per unit. This allows the government to fully repay Egat's debt.

The second option proposes a smaller rise in the Ft, pushing the power tariff to 4.25 baht per unit while deferring repayment of Egat's debt.

A third option sets the tariff slightly lower at 4.20 baht, reflecting a reduced gas price projection alongside the postponed debt.

In the fourth scenario, the tariff would remain unchanged at 3.95 baht per unit, but this would require electricity agencies to claw back 16.1 billion baht in unused funds, Mr Poonpat said.

Public consultations are open on the ERC website until July 20, and the commission's board will finalise the new Ft rate by September.