ERC raising Ft rate by 1.2% to cover higher fuel costs

The price of electricity will rise 1.2% for all users, starting in January. (File photo)

The Energy Regulatory Commission (ERC) will increase the monthly electric rate for January-April 2019 to 3.64 baht per kilowatt-hour, up 1.2% from 3.60 baht in the September-December period.

Power bills have been stable over the previous four periods from September 2017 to December 2018, making it the first rise in 16 months, said ERC secretary-general Naruepat Amornkosit.

The ERC agreed to increase the fuel tariff (Ft) rate to 4.31 satang per kWh, led by a hike of fuel prices for generating electricity, but the base factor for power bills is 3.76 baht per kWh.

The power rate includes the base factor and the Ft charge. The base factor is calculated based on capital expenditures for power plants and the grid system, while the Ft charge is for the cost of power generation.

"We want to inform power consumers in advance that the price is increasing, but for the next period power generators will have to manage generating costs because higher power bills will directly affect consumers as well as business and industrial operators," the ERC said. "The new rate is not expected to impact the country's economic growth."

Ms Naruepat said natural gas comprises 57% of the country's power generation, followed by coal (18%), renewable fuels (13%) and hydropower imported from Laos (12%).

She said the actual rate should be 3.84 baht, a 6.7% rise, but the ERC and state utilities have cash on hand of roughly 10.3 billion baht, which is enough to maintain the FT rate at lower than expected.

"The fuel cost is likely to increase more, in line with the natural gas price adjustment, which is calculated based on the price of bunker oil in the past 6-8 months," Ms Naruepat said. "The May-August period in 2019 is scheduled for an increase in the Ft rate once again."

In related news, policymakers ordered the Electricity Generating Authority of Thailand to schedule earlier commercial operation dates (CODs) of three new hydropower plants in Laos: the 1,385-megawatt Xayaburi Hydro Electric Power Plant, the 354MW Xe Pian Xe Namnoy and the 269MW Nam Ngieb I.

The three power plants are in the last stages of development and undergoing test runs. The COD is set for the second half of 2019.

The hydropower project has a power-generating cost of two baht per kWh, lower than fossil-made charges at 3.70 baht, so the ERC expects the three new power plants to reduce costs for the May-August period.

The renewable power projects also add to higher power bills, as the cost is higher than for fossil fuels, with an average power tariff of 25 satang per kWh.

Renewable energy costs come in the form of feed-in tariffs of 2.4-5.66 baht per kWh from solar, wind, biomass, biogas and waste-to-energy.


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