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Ice Paradise vs Power Bills: Controversial Rate Cut Escalates War of Words Among Thai Energy Experts!

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Visitors seeking a refreshing escape from the blazing summer heat in Bangkok can now indulge in a delightful winter wonderland at ‘Ice Magic: Fantasy on Ice,’ located on Floor G of The Market on Ratchadamri Road. This much-anticipated indoor snow park opened its doors on April 18 and will continue to enchant guests until July 16.

However, as the city revels in this frosty attraction, energy activists and politicians are expressing concern over a decision by an Energy Regulatory Commission (ERC) subcommittee to reduce electricity rates from May to August. They argue that this temporary solution does not address the real cause of skyrocketing power bills.

On Friday, the subcommittee approved the fuel tariff (Ft) rate adjustment, which reflects changes in fuel costs and other variables. The full ERC board will vote on the proposal on Monday. If accepted, the adjustment would reduce household electricity bills by 1.5% to 4.70 baht per kilowatt-hour (unit) from the previously planned 4.77 baht rate, from May to August. The proposed change comes as a response to numerous public complaints about significant spikes in electricity bills during the scorching summer months.

An anonymous Ministry of Energy source revealed that the ERC panel made its recommendation after the Electricity Generating Authority of Thailand (Egat) proposed a 28-month moratorium on debt repayments. The Ft, a primary component of the power tariff, is reviewed by the ERC subcommittee every four months. Power tariffs are also impacted by debts owed to Egat, which posted an accumulated loss of 150 billion baht after subsidizing electricity prices from September 2021 to December 2022.

Rosana Tositrakul, an energy advocate and former Bangkok senator, argued that the high electricity bills stem from the cost of imported liquefied natural gas (LNG). She explained that Egat purchased 70% of its electricity from a private company, while it produced only 30%. Egat buys electricity from the private firm at 3-9 baht per unit and resells it to the Metropolitan Electricity Authority and the Provincial Electricity Authority at 2.75 baht per unit.

“If Egat produces more electricity, people can use electricity at cheaper rates,” Tositrakul remarked. She also noted that under the contract with the private company, the government must make availability payments to the firm, irrespective of whether electricity is produced or not. This arrangement has led to a debt of 40 billion baht and the payment of over 100 billion baht to purchase electricity. In total, Egat runs a debt of approximately 150 billion baht, which has become the Ft rate.

“When Egat buys expensive electricity but sells it at cheap rates, the accumulation of debt follows, and Egat and consumers have to shoulder the expensive costs while the private sector reaps the profits,” Tositrakul stated. “The ERC is expected to cut the electricity bill rate from May to August, after which the rate will go up again; otherwise, Egat will have no money to repay debts. No one engages in a policy of buying expensive and selling cheap. This raises suspicion about alleged irregularities.”

Chartpattanakla Party leader Korn Chatikavanij suggested that the government must eliminate the Ft rate for the four months to address the issue of steep bills. He pointed out that Egat’s production costs have decreased as LNG prices keep dropping and proposed that the government revamp the structure of the electricity production industry.

“The government needs the political courage to overhaul the structure and liberalize the sector by allowing people to invest so we don’t have to rely on big businesses and state enterprises to build large power plants,” Chatikavanij asserted.

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