The Federation of Thai Industries (FTI) has issued a warning that Thailand’s plan to increase electricity rates later this year could discourage foreign direct investment. This cautionary statement came after the Energy Regulatory Commission (ERC) announced on Friday that power bills for both businesses and households are set to rise.
The ERC has proposed three new power tariff options, with increases ranging from 11% to 44% above the current rate of 4.18 baht per kilowatt-hour, which is in place until the end of August. These adjustments are necessitated by higher gas prices during the cool season and the need to repay debts owed to the Electricity Generating Authority of Thailand (EGAT) and gas suppliers.
Starting from September and running through December, the new electricity rates will range from 4.65 to 6.01 baht per unit. The commission clarified that EGAT and gas suppliers had previously supported the government in keeping tariffs low from September 2021 to April of this year. This support led to a 15 billion baht debt from gas purchases and a 98 billion baht loss for EGAT.
Kriengkrai Thiennukul, Chairman of the FTI, noted that the current rate of 4.18 baht is already considered high. He expressed concern that potential foreign investors might reconsider their plans due to the impending rate hikes.
Officials from the ERC emphasized that the rate adjustments are critical for addressing the financial burdens faced by EGAT and gas suppliers, which have accumulated significant losses while helping maintain lower tariffs. The new rates aim to balance these financial obligations while reflecting the increased cost of gas during the cooler months.
