BANGKOK, April 25 (Bloomberg): Thailand’s government will cut power rates ahead of next month’s general election, in an effort to ease the plight of consumers and businesses grappling with sweltering temperatures.
April is traditionally hot in the Southeast Asian country, but it has been stifling for weeks this year, with levels earlier this month touching 45C (113F). The combination of humidity, wind and other factors recently pushed the heat index to a record of over 50C in parts of the country, including the tourist island of Phuket - an extra blow to a national economy already dented by suffocating haze keeping visitors away and making hundreds of thousands ill.
Air quality in the much-visited northern city of Chiang Mai, for instance, is still poor, with dangerous particles nearly 10 times above the World Health Organization’s guided limit. In early April, with forest fires and burning crop stubble, it ranked as the world’s most polluted city.
Record heat is also causing power bills to balloon, squeezing household incomes and pushing energy prices to the top of the electoral agenda. Electricity demand hit the highest level ever on Friday as households and businesses fired up air conditioners, the country’s energy regulator said Monday.
"We are in the peak of summer season when power demand is normally at its high,” said Deputy Governor Prasertsak Cherngchawano of the state-owned power utility. "We expect demand to remain high this month through May.”
Retail power rates will be cut from May 1. On Tuesday, the cabinet also approved a plan to subsidize electricity costs for about 23 million households for the next four months at a cost of 11.1 billion baht ($320 million), government spokesman Anucha Burapachaisri said.
Temperatures have been soaring across parts of Asia, stretching power grids from India to Bangladesh, boosting the need for fossil fuels. While the heat wave has eased in recent days, the risk of another spike over the next several weeks poses risks to lives as well as businesses.
Consumers Fret
With consumers complaining of high electricity bills after last year’s energy crisis, political parties in Thailand have stepped up, calling for moves to ease costs. The Pheu Thai party - the principal opposition party, leading in opinion polls - says it will immediately cut rates if it wins the May 14 election.
Helping Thais cope with soaring living costs is a common refrain among political parties vying for power in the election after inflation climbed to a 14-year high in 2022.
Pheu Thai has built its campaign around measures to boost household incomes and has proposed a digital wallet that will give 10,000 baht ($291) to every Thai aged 16 and up.
The electricity regulator on Monday agreed to lower the retail power tariff to 4.70 baht per unit during the May-August period, down from an earlier proposal to keep the rate at 4.77 baht.
Thai household power rates jumped last year due to higher fuel import costs. Industrial and commercial consumers are charged at a higher rate in order for the Electricity Generating Authority of Thailand to recoup some of the losses it incurred while selling power below the cost of production.
Extreme heat, a consequence of climate change, is a particularly significant headache for energy importing economies like Thailand. - Bloomberg
