The Council of State, the government’s legal advisory body, has rejected a proposal by energy regulators to change conditions in contracts with renewable power firms in order to bring down electricity prices.
The Energy Regulatory Commission (ERC) had made the proposal as a way of freeing up money to reduce electricity bills by 0.17 baht per kilowatt-hour (unit), from 4.15 baht at present.
The Pheu Thai-led government has been pressing for months to bring power prices down below 4 baht a unit to help ease the expense burden on consumers and businesses.
Energy Minister Pirapan Salirathavibhaga met recently with representatives from the ERC and the Council of State to discuss the issue.
“The meeting determined that the ERC’s proposal cannot move forward because authorities are strictly bound by conditions stated in the contracts,” Mr Pirapan said on Thursday.
The changes proposed by the ERC are beyond the scope of the regulator’s jurisdiction, he added.
The commission suggested earlier that the government reduce its spending on a policy to promote investment in renewable energy, especially expenses incurred under power purchase agreements (PPAs) made with renewable power plant operators.
A PPA can be renewed every five years, with multiple renewals possible. This means that if the government cannot reduce expenses, it has to keep paying the power companies perpetually, accumulating financial burdens for businesses and households.
Renewable power plant operators are granted adder and feed-in tariffs for a period of eight years. When the tariffs expire, they continue to receive a bonus tariff, which makes renewable power under PPAs more expensive than electricity generated by coal-fired power plants.
Worawit Srianunraksa, a member of the ERC, said he wants the National Energy Policy Council, chaired by Prime Minister Paetongtarn Shinawatra, to reconsider electricity prices set under PPAs and base them on prices calculated by the Energy Policy and Planning Office.
Mr Pirapan, meanwhile, said he would focus on his plan to reduce electricity bills by nearly 0.40 baht per unit by adjusting the usage of so-called Pool Gas, leading to lower generation costs.
Pool Gas is the weighted average wellhead price of gas from the Gulf of Thailand, the Malaysia-Thailand Joint Development Area, Myanmar and imported liquefied natural gas.
If authorities can better manage Pool Gas usage for power generation and in the manufacturing sector, the power tariff can be reduced, he said.