ERC offers 3 tariff alternatives to deal with Egat’s debt from subsidies

The lowest scenario is a tariff of 4.45 baht per unit, while the highest scenario is 6.28 baht per unit.

The public has been encouraged to provide feedback from July 7-21 through the ERC website before the actual tariff is finalised at the end of this month.

The global energy market has started to ease, including the volatility in the price of liquefied natural gas (LNG), which is the main alternative fuel for electricity production. This has lowered the cost of importing LNG, leading to a decrease in electricity tariffs. However, Egat is still carrying the debt incurred in providing LNG to consumers at subsidised prices during the energy crisis. This debt has risen to billions of baht, which needs to be gradually repaid by electricity consumers, the ERC said. Egat has proposed a minimum electricity tariff of 66.89 satang per unit, equivalent to 4.45 baht per unit. The ERC will announce the tariff in late July or early August.

The ERC secretary-general and spokesman, Komkrit Tantravanich, stated that the three alternative scenarios for electricity tariffs are based on the estimated fuel costs borne by PTT Plc and Egat Plc.

The estimates prepared by the office of the ERC are based on the cost estimate in the base year May to August 2015 and the estimate for May to August of this year. The detailed scenarios are:

■ Scenario 1 (full repayment of outstanding debt):

The estimated electricity tariff for September to December 2023 would be 249.81 satang per unit, divided into estimated retail electricity tariff of 28.58 satang per unit and the repayment of the electricity cost incurred by Egat to provide subsidy to consumers since September 2021, totalling 135.30 billion baht. When combined with the base electricity tariff of 3.78 baht per unit, the tariff (excluding value-added tax) will increase to 6.28 baht per unit.

■ Scenario 2 (maintaining the same electricity tariff as May to August of this year):

The estimated electricity tariff for September to December of this year is 91.19 satang per unit, divided into an estimated retail electricity tariff of 28.58 satang per unit and the partial repayment of the electricity cost incurred by Egat since September 2021, totalling 38.29 billion baht, in order to reduce the increasing interest burden. It is estimated that by the end of December of this year, the outstanding debt payable to Egat would amount to 97 billion baht. The electricity tariff (excluding value-added tax) will remain at 4.70 baht per unit.

■ Scenario 3 (repayment of outstanding costs in 5 instalments):

The estimated electricity tariff for September to December 2023 is 66.89 satang per unit, divided into an estimated retail electricity tariff of 28.58 satang per unit and the gradual repayment of the electricity cost incurred by Egat to provide subsidy since September 2021, in 5 instalments of 23.43 billion baht each. It is estimated that by the end of December 2023, the outstanding debt payable to Egat would be 111.87 billion baht. The electricity tariff (excluding value-added tax) will be reduced to 4.45 baht per unit.

Komkrit added that these three scenarios for electricity tariffs were based on the estimated fuel costs provided by PTT and Egat, and calculated by the ERC.

The ERC, along with PTT and related agencies, closely monitors the production and usage of natural gas to ensure energy stability at a reasonable price.

Fuel tariff is determined by fuel costs, a key element in power tariff, which in turn is used to calculate power bills and is adjusted every four months.

The fuel tariff is also adjusted for the debt owed to Egat, which posted an accumulated loss of 150 billion baht after offering electricity at subsidised rates from September 2021 until December last year.