The Thai Cabinet has approved a proposal to lower electricity rates from 4.15 baht to 3.99 baht per kilowatt-hour for the period from May 1 to August 31, aiming to ease financial pressure on households and businesses. The final decision now rests with the Energy Regulatory Commission (ERC), which is expected to confirm the rate later this month.
Prime Minister Paetongtarn Shinawatra stated that the government seeks to ensure power charges do not exceed 3.99 baht per unit without requiring a state subsidy. The move aligns with the Pheu Thai Party’s ongoing efforts to bring electricity costs below the psychological threshold of 4 baht per unit.
Despite the Cabinet’s decision, energy regulators caution that tariff reductions must account for outstanding subsidies owed to the Electricity Generating Authority of Thailand (Egat) and other energy suppliers. The ERC previously indicated that rates for the upcoming four-month period could range between 4.15 and 5.16 baht per unit, depending on how much is allocated for reimbursing these entities.
In January, the ERC proposed a minor reduction of 0.17 baht per unit if the government scaled back investment incentives for renewable energy projects, which are partially funded by electricity tariffs. Power rates in Thailand are reviewed every four months to adjust for fluctuations in fuel costs, exchange rates, and other economic factors.
Former Prime Minister Thaksin Shinawatra recently suggested that the government aims to bring down electricity rates further, potentially to 2.70 baht per unit. However, details on how such reductions would be achieved remain unclear. One major challenge is Egat’s long-term power purchase agreements, which contribute to a 30% electricity surplus—significantly higher than the typical reserve margin in most countries.
The ERC’s decision on the new tariff is expected later this month, providing greater clarity on the feasibility of further reductions.
