Govt defends electricity tariff

via CAAI News Media

Thursday, 04 February 2010 15:05 May Kunmakara

GOVERNMENT officials on Wednesday defended an adjustment in electricity pricing that has generated concern from customers who fear that their monthly utility bills may increase to unsustainable levels.

A new electricity tariff for Phnom Penh residents was finalised Wednesday after being debated for more than a year. Government officials say the new tariff will subsidise the expansion of Electricite du Cambodge (EDC), the Kingdom’s flagship power provider, into the outskirts of Phnom Penh and neighbouring provinces.

“We want to be fair between people who live in the city and those who live on the outskirts of Phnom Penh and in Takhmao,” Ty Norin, director-general of the Electricity Authority of Cambodia (EAC), said Wednesday at a question-and-answer session held at the Cambodiana Hotel.

Since 2006, EDC customers in Phnom Penh using less than 50 kilowatt-hours of electricity per month have been paying 390 riels (US$0.09) per kilowatt-hour. Under the new pricing system, customers will pay 610 riels per kilowatt-hour if they use less than 50 kilowatt-hours in a month. Those who use more than 50 kilowatt-hours will pay 720 riels per kilowatt-hour.

Officials say this increase is necessary because the government subsidies that have kept electricity prices down for many consumers in the past few years are unsustainable.

“This [new tariff] will assure that there is sufficient income for a stable and sustainable national grid,” Ty Norin said, adding that the increased revenue to EDC will hopefully spur “enlargement of the electricity supply from substations of the national grid to other provinces and rural areas”.

The new tariff, which consumers will see reflected in their bills beginning next month, will be applied to EDC users in Phnom Penh, Kandal province’s Takhmao town and Kampong Speu province’s Chba Mon town. Government officials say businesses stand to gain from pricing reforms, with rates for commercial customers varying depending on a range of factors including their size and location relative to the power grid.

Ith Praing, secretary of state at the Ministry of Industry, Mines and Energy, said EDC has yet to expand its coverage to the outskirts of Phnom Penh and Kandal province, leaving people in these areas without electricity or forcing them to rely on expensive generators or private companies for power.

“I want to call on the 30,000 customers in Phnom Penh city to share with those who do not have access,” Ith Praing said.

Bun Na, 45, a resident of Boeung Kak I commune in Tuol Kork district who attended the meeting Wednesday, said she was worried that the new tariff would become a burden.

“The government should not increase the price at a time when we are struggling for income. If the price increases, we will have to reduce our usage,” said Bun Na, who is unemployed. She added that she uses about 70 kilowatt-hours of electricity per month.

Others worry that the tariff will hurt small-scale businesses in the capital that are treated the same as private consumers for billing purposes.

As part of the pricing reforms, foreign embassies, international NGOs and houses rented by foreigners will now pay 820 riels per kilowatt-hour – the same rate as government facilities – rather than the 890 riels per kilowatt-hour they paid previously.

“Some embassies complained to us that we are not fair and are discriminating against them,” Ty Norin said in explaining this decision.