Council of State Rejects ERC Plan to Lower Electricity Bills

Picture courtesy: Bangkok Post

The Council of State, Thailand's primary legal advisory body, has dismissed a proposal from the Energy Regulatory Commission (ERC) aimed at renegotiating contracts with renewable power firms to reduce electricity bills. The proposal sought to decrease electricity costs by 0.17 baht per kilowatt-hour (kWh) from the current 4.15 baht per unit.

Under pressure from the Pheu Thai-led government, efforts have been underway to lower power prices below 4 baht per unit to alleviate financial strain on consumers and businesses.

Energy Minister Pirapan Salirathavibhaga convened with ERC and Council of State representatives to discuss the proposal. Following their meeting, Mr Pirapan announced that regulatory limitations prevent the proposal from advancing, as changes would violate the conditions of existing contracts.

The ERC initially suggested cutting government expenditures on renewable energy investments, focusing specifically on costs associated with power purchase agreements (PPAs) arranged with renewable power operators. These agreements, typically renewable every five years, could otherwise result in ongoing financial obligations for the government, perpetuating expenses for businesses and households.

Presently, renewable power operators benefit from incentives such as adder and feed-in tariffs valid for eight years. After these tariffs expire, they continue to receive a bonus tariff, making electricity from renewable sources under PPAs more costly than that generated by coal-fired plants.

Worawit Srianunraksa, an ERC member, expressed a desire for the National Energy Policy Council, led by Prime Minister Paetongtarn Shinawatra, to re-evaluate PPA electricity prices based on calculations from the Energy Policy and Planning Office.

However, Minister Pirapan is determined to pursue an alternative approach to cut bills by nearly 0.40 baht per unit. His strategy involves optimising the use of Pool Gas to reduce power generation costs. Pool Gas represents the weighted average wellhead price of gas sourced from the Gulf of Thailand, the Malaysia-Thailand Joint Development Area, Myanmar, and imported liquefied natural gas.

Mr Pirapan believes that by enhancing the management of Pool Gas for power production and industrial purposes, it will become possible to lower the national power tariff, providing some relief to consumers and supporting economic stability, reported Bangkok Post.

-- 2025-02-21