Comparison study of transmission pricing techniques in Thailand

Abstract

Although the Thai state enterprise sector is relatively small, it is concentrated in economy sectors. These are promising sectors where private sector participation can deliver better services. Additionally, Thailand's macro-economics is under IMF's condition for restructuring of Thai economy. Thus, state-owned enterprises must change into public-owned enterprise. The National Energy Policy Office (NEPO) who supervises the state enterprise in energy has set a clear target. By 2006 electricity in Thailand will be freely traded, under new market mechanisms to be in place starting in 2002. The Electricity Generating Authority of Thailand (EGAT) will be corporatized with the government continuing as its sole owner. EGAT would retain its position as central supplier. It would be a holding company, with a transmission operator-Transmission Company (TransCo) as a subsidiary and other functions initially as profit centers, which would subsequently be corporatized. However, third-party access would be gradually allowed, with producers to sell directly to users, using the wheeling services of TransCo. NEPO had engaged PricewaterhouseCoopers for studying the electricity tariffs including transmission pricing. Additionally, EGAT who is directly involved in the transmission system is proceeding to study the transmission pricing to prepare for the change in the future. This paper shows the results of studying between PricewaterhouseCoopers and EGAT staff in a descriptive comparison that consists of the principle of conceivability, forecasting assumption, financial model including the tariff results of two the groups.