A source in the Energy Ministry said that the subcommittee on power tariffs would propose to the Electricity Regulatory Board on October 5 that the tariff be decreased for the October-January period. The panel plans to propose a tariff reduction of 7.02 satang per unit.

The panel attributed the decrease to Bt4-billion reduction in power generating costs following BLCP Power's new ability to supply power to the system ahead of schedule. The inclusion of the coal-fired power plant into the grid has reduced the need for bunker oil as electricity-plant fuel. And the Electricity Generating Authority of Thailand has started using more natural gas in its power generation operations.

"If the regulator approves the proposal, the new tariff would be 78.42 satang per unit. Combined with the base rate of Bt2.25 per unit, power users would pay Bt3.0342 per unit," the source said.

The subcommittee will also propose that the regulator scrap the special 10-satang tariff reduction for small users that consume less than 150 units a month as well as for farmers.

The source noted that the tariff may be increased for the February-May period when power demand is expected to spike.

"The economy is also expected to perform better next year after the formation of a new government. Power consumption should rise 5-6 per cent next year - or - 1,500 megawatts," he said.

Due to higher demand, Egat will have to run generators fuelled by bunker oil, which is more expensive than coal and natural gas. In the same period, the natural gas price is also expected to cost more than Bt200 per million BTUs. Combined the factors could drive the tariff up 8 satang per unit.

"We might review early next year whether there will be any measures to reduce the tariff. More hydropower and gas could be used to reduce bunker-oil dependence," he said.