ERC approves new tariff, reducing Thailand’s electricity costs


The Energy Regulatory Commission (ERC) approved a new electricity tariff of 3.99 baht per kilowatt-hour, a reduction aimed at decreasing power bills for households and businesses for the remaining four months of this year. This change is a response to the government’s energy price policies.

In its initial meeting on September 13, the Cabinet agreed to lower the electricity tariff from 4.45 baht to 4.10 baht per unit. However, in a subsequent meeting on September 18, it resolved to further reduce the rate to 3.99 baht per unit.

The rate was proposed by Energy Minister Pirapan Salirathavibhaga after discussions with the ERC, as revealed by government spokesperson Chai Watcharong.

Khomgrich Tantravanich, secretary-general of the ERC, explained that the electricity tariff reduction also involves adjusting the fuel tariff (Ft), a crucial component of the power tariff. It is set to decrease from 0.66 baht per unit to 0.2048 baht per unit.

The Ft, initially representing float time, is a fuel adjustment charge influenced by various factors such as fuel prices, electricity purchases, and other expenses in line with government policy.

The Electricity Generating Authority of Thailand (EGAT), a state-run entity, is responsible for buying electricity from local companies and importing some from Laos to maintain a sufficient power supply in Thailand. It’s currently unclear how the reduction in the new electricity power tariff will affect reimbursements to EGAT.

A portion of the electricity power tariff is needed to compensate EGAT for the substantial losses incurred from subsidising electricity bills between September 2021 and May this year.

This measure was taken to alleviate the impact of rising fuel prices on households and businesses. As of the end of August, EGAT’s loss was projected to decrease to 135 billion baht, reported Bangkok Post.

With an electricity tariff rate of 4.45 baht per unit, the Authority was expected to recover its losses by April 2025. The ERC had a meeting with EGAT and PTT Plc on September 20 to discuss finalising the energy price reduction policy.

EGAT was directed to devise a plan to adjust its debt management, while PTT was asked to lower its gas sales price to 304.79 baht per million British thermal units (BTU), a decrease from 323.37 baht per million BTU, as per the ERC’s instructions.

It’s worth noting that gas comprises approximately 60% of the fuel used for power generation in Thailand.

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Alex Morgan

Alex is a 42-year-old former corporate executive and business consultant with a degree in business administration. Boasting over 15 years of experience working in various industries, including technology, finance, and marketing, Alex has acquired in-depth knowledge about business strategies, management principles, and market trends. In recent years, Alex has transitioned into writing business articles and providing expert commentary on business-related issues. Fluent in English and proficient in data analysis, Alex strives to deliver well-researched and insightful content to readers, combining practical experience with a keen analytical eye to offer valuable perspectives on the ever-evolving business landscape.

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