EGAT shoulders Ft almost 100 billion Baht; retained earnings can’t maintain electricity rate
19 July 2022EGAT has shouldered Ft almost 100 billion Baht over the past year, while a loan of 25 billion Baht for liquidity support is still not enough for its operation. To prevent effects on energy security in the long term, EGAT calls for government support. The retained earnings gained from managing its assets to generate and transmit electricity are not cash; therefore, they cannot keep electricity tariff rate.
Mr. Boonyanit Wongrukmit, Governor of Electricity Generating Authority of Thailand (EGAT), said EGAT has realized that people are affected by soaring energy prices. For the past year EGAT has shouldered Ft in accordance with electricity charge measures, since September 2021, for almost 100 billion Baht. Although EGAT took out a loan of 25 billion Baht for liquidity support, it cannot compensate for a huge rise in fuel prices. Therefore, EGAT needs to inform Energy Regulatory Commission (ERC) of the actual fuel cost and call for the government support to prevent impacts on energy security in the long term.
As EGAT is a state-owned enterprise, electricity price and EGAT’s income are regulated by ERC to be sufficient for investment and operation. The profit EGAT gains will be delivered to the Ministry of Finance as the public revenue to develop the country in many areas, including investment in generation and transmission systems for energy security enhancement to reduce the government expenses. The retained earnings of 329 billion Baht which are shown on the financial statements are not cash. Instead, they are the value of the assets invested by EGAT from the remaining profit after sending to the Ministry of Finance, to generate and transmit electricity to the public, such as power plants, substations, and transmission lines. Therefore, they cannot compensate for the increasing fuel price.
EGAT has monitored energy price crisis closely and worked with the government on fuel management to relieve fuel price burden and reduce electricity cost, such as choosing the cheaper fuel for power generation, postponing the decommission of Mae Moh Power Plant which uses domestic coal, an inexpensive fuel for power generation, and enforcing energy-saving measures in EGAT offices, dams, and power plants with the aim to reduce power consumption of 20% to reduce fuel import. Meanwhile, the public is encouraged to join in energy saving to tackle this crisis.