"Households consuming less than 150 units per month as well as irrigation pump operators would pay 10 satang less per unit. This subsidy amounts to Bt267 million, which would be borne by PTT Plc.

This is to relieve consumers from the higher cost of living and help farmers who are already affected by disasters," Yongyuth Vichaidit, chairman of the Electricity Regulatory Board, said yesterday.

The variable rate, or Ft, for the four-month period would be 85.44 satang per unit, up 9.60 satang or 3.19 per cent from the Ft in the previous four months, he said after yesterday's board meeting.

The Ft would be added to the base power rate of Bt2.25, resulting in a total charge of Bt3.1044 per unit during the four-month period.

The Ft is reviewed every four months to account for changes in the cost of generating power, such as higher fuel prices. The price of natural gas has risen from Bt182 per million BTU in May to Bt192. Bunker oil also increased from Bt15.25 to Bt15.75, while diesel went from Bt18.56 to Bt19.37.

Yongyuth noted that the Ft could have been 2.39 satang higher, but for the decline in power consumption during the previous four months.

Sairoong Tongplon, chief of the Federation of Consumers Organisations, submitted a letter to the board, saying the hike in power rates was inappropriate and should be withheld.

She said the Electricity Generating Authority of Thailand (Egat) has based its power rates on a level of expected return on investment that would attract investors for the agency's initial public offering.

"This practice remains though Egat's share sale has been scrapped. It is unfair and not transparent, to raise the power price solely because of the higher price of fuel without considering other factors including the return on investment.

"To help small power consumers is a temporary measure, which does not guarantee true fairness to consumers. The assistance does not take into account the root of the unfairness which is reflected through the base power rate and the Ft," she said in the letter.

Meanwhile, the power regulator highlighted three criteria for the upcoming letting of contracts for new power plants - qualifications of the independent power producers interested in bidding, foreign-exchange burden and type of fuel. The regulator proposed that the bidders shoulder the forex-related burden while on the allocation of fuel, coal should be used to generate 5-10 per cent of total capacity.

The regulator did not rule if Egat's affiliates - Electricity Generating Plc and Ratchaburi Electricity Generating Holding Plc - should be allowed to join the bidding.

Yongyuth said the issue needs further consideration, but the regulator's main objective is to ensure level competition and fairness to all parties, to prevent price collusion.

The regulator will also consider if power producers with connections to fuel distributors should be barred from the bidding on grounds of possible conflict of interest.

PTT Plc has expressed its interest in having a subsidiary join the bidding.

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