The hot weather and the absence of subsidies have led to Thai voters receiving an unpleasant shock just weeks before they go to the polls. The impact cannot be positive for General Prayut and his coalition government. A further substantive issue has emerged concerning Thailand’s energy generation policy and the use of private firms to shore up generation capacity to the electricity grid giving the country a large reserve supply to meet surges.
The odds of General Prayut Chan ocha returning to power after the May 14th General Election were cut in the last week as the Thai public received shockingly higher electricity bills in the post. Even as spokespeople for the Prime Minister’s Office defended the government and pointed to the kingdom’s record high temperatures in March and April as the real culprit while rushing through a small 1.5% reduction, there emerged controversy over new power generation contracts with the private sector to secure an electricity reserve of up to 50 or 60% of demand. This has led former minister and Thai Sang Thai Party leader, Khunying Sudarat Keyuraphan, to threaten legal action against the government. She also promised that any administration she took part in would have a plan to lower the tariff charged per unit from ฿4.77 per unit now to ฿3.50 by renegotiating electricity generation contracts with private firms.
With the General Election less than three weeks off now, the government and Prime Minister Prayut Chan ocha have been hit with what could prove to be a killer blow which could spell lights out for his chances of reelection.
Electricity bills issued in Thailand at the end of March and the middle of April have left households and businesses across the kingdom reeling with payment demands showing amounts due at up to twice as much as the period previously causing outrage among the population and calls for action from the business community, notably in recent weeks from the tourist sector where hotels are reporting that electricity costs have suddenly become a critically large cost factor rising from 5% of overhead before the pandemic to 15 to 20%.
Major shock! Electricity bills surge with a coffee shop having to pay ฿100,000 per month with a medium-sized resort business getting a ฿1 million demand
The spike in electricity bills has seen headlines similar to those seen in Western countries last year with a coffee shop reporting a bill of ฿100,000 a month while a moderately sized hotel resort reported a bill of over ฿1 million a month.
On social media and TV Thai households, they are talking about bills that are nearly twice as high as normal for the last month and the anger is palpable despite an insistence by the government that the situation is beyond its control.
The Pheu Thai Party, in early December 2022, already promised, as part of its economic development plans, that it would act decisively to slash electricity costs across the board for both households and businesses.
One of the kingdom’s economic success stories
Pheu Thai to knock back skyrocketing electricity costs hitting business with a 21% rise in 2023 already confirmed
Electricity generation had been a success story for Thailand up to three years ago when a new plant development programme was announced to meet anticipated demand.
Opposition parties, the public and even some officials have pointed the finger at the Prime Minister and the government’s energy management policies
The response from General Prayut who is the Chairman of the National Energy Policy Committee (NEPC) to critics of his government has been one of vehement denial with some of its allies pointing to the recent record-high temperatures the kingdom has been experiencing as the key reason for the skyrocketing electricity bills, many of which will become due for already hard-pressed Thai households and business enterprises on May 14th or election day.
No doubt the Prime Minister and his coalition government partners will pay a price as people cast their ballots at the same time as paying their bills.
In fairness to the government, this is disastrous timing and if anything shows political naivety with the main problem being hot weather and the absence of pandemic-era subsidies.
Thailand for the last three years has avoided an electricity bill crisis like that in Europe and the United Kingdom until this pre-election period
Many had credited Prayut’s government with helping the country avoid the electricity price shocks seen in Western countries particularly in Europe and the United Kingdom in the last year, where price rises decimated local and grass root economies.
In Western countries, the main culprit was higher energy costs, artificial markets and levies brought in to tackle climate change.
The situation in Thailand was brought about by the use of subsidies provided to the Electricity Generating Authority of Thailand (EGAT) to consumers from September 2021 to December 2022 which ran up a combined debt to the authority of ฿150 billion.
It is reported that the government has paid ฿20 billion in recent months but the situation was unsustainable financially resulting in higher bills as the withdrawal of subsidies coincided with a surge in demand.
More and more Thai households now use air conditioning units while fridges must also consume more power as temperatures outside hit record highs
In the meantime, the large electricity bills, which have been on the minds of all Thais at all levels since last week, are primarily being driven by the record high-temperature levels in Thailand, a country where more and more households use air conditioning which consumes massive quantities of power when the temperature level rises. Refrigerators are also a key source of greater power demand.
The Muang district of the lower northern Tak province, near the Myanmar border, recorded a record temperature of 45.5 degrees celsius last week as the country continued to bake in a heatwave.
Ordinary Thais and business people were less than impressed by a decision on Friday by a sub-committee of the Office of the Energy Regulatory Commission (ERC) to reduce by 1.5% the electricity tariffs for households from May to August this year which will see the rate fall from ฿4.77 to ฿4.70 per unit.
Bigger issue emerged at national policy level where private firms have been contracted to supply power to the grid with a national reserve of 50% to 60%
However, a bigger issue has arisen from the shock caused nationwide by the bills received in the post over the last few weeks and that is a critical examination of the country’s energy generation policy and the use of private firms to produce a reserve of electricity in Thailand which has been estimated in various reports to be somewhere between 50% and 60% of the nation’s required demand.
This was referred to by Mr Anon Sakwarawit of the National Institute of Development Administration (NIDA) this week who, in a shocking review of government policy, suggested that the national reserve was 50% of demand and that the policy has only benefited the private sector contractors involved in supplying the grid with power irrespective of whether it is used or not.
The official also made the point that the other beneficiaries of this policy are Gulf states which supply the energy and resources needed to power the extra capacity that is being generated at the expense of Thai households and the already challenged economic base.
Thai Sang Thai Party leader Khunying Sudarat Keyuraphan takes up the issue and threatens to sue the government and promises lower electricity costs
The issue was taken up over the weekend by former minister and public favourite, Khunying Sudarat Keyuraphan, the leader of the Thai Sang Thai Party who cited the reserve at more like 60% of demand and promised that if her party is involved in the next government that a policy would be pursued to bring the tariff charged from ฿4.77 to ฿3.50 per unit.
This would be done by renegotiating private contracts and cutting back on excess profits including suspending new power plants currently in the pipeline which the politician claimed were surplus to requirements.
Khunying Sudarat called for citizens to file a complaint about the matter saying she is bringing a lawsuit against the government in respect to the country’s electricity generation policies which she claimed were designed to benefit private firms.
She also suggested that she may ask the courts to issue a protection order in respect of key elements of the policy, notably the new plants currently being built which she claimed are surplus to requirements and only adding to further costs to be borne by the country’s consumers.
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Further reading:
Electricity price freeze requested by Deputy PM to help Thai households cope with the slower economy
