Office of the Energy Regulatory Commission Fact Sheet Power Development Fund Office of the Energy Regulatory Commission 30 September 2016 Fact Sheet: Power Development Fund Contents POWER DEVELOPMENT FUND under the Energy Industry Act, B.E. 2550 (2007) .............. 1 1. Background of the Power Development Fund ....................................................................... 1 2. Structure and Management of Power Development Fund Money ........................................ 3 3. Progress of Power Development Fund Operations ................................................................ 6 4. Power Development Fund Performance (as Working Capital) ............................................... 16 5. Guidelines for Presenting Fiscal Year 2017 Work Plans of Local Power Development Funds under Category A and Category B ............................................................................ 17 6. Highlights of the Operations of the Power Development Fund for Development or Rehabilitation of Localities Affected by Power Plant Operation (the Fund Operations under Section 97(3)) .............................................................................................................. 18 7. Public Relations Activities and Exhibitions of Community Project Performance “3-Year Learning and Stepping Forward to Sustainable Development” ............................. 28 8. Power Development Fund Awards ...................................................................................... 30 9. Contact/Coordination Pertaining to the Operation of Power Development Funds in Designated Areas ................................................................................................................. 32 i POWER DEVELOPMENT FUND under the Energy Industry Act, B.E. 2550 (2007) 1. Background of the Power Development Fund The “Power Development Fund (the Fund)” has been set up under the Office of the Energy Regulatory Commission (OERC) pursuant to the Energy Industry Act, B.E. 2550 (2007), with the following objectives: (1) to be used as a capital to enhance extensive electrification to various localities, (2) to decentralize development to provincial areas, (3) to develop or rehabilitate localities affected by power plant operation, and (4) to promote the use of renewable energy and technologies for electricity industry operation that have minimal impact on the environment, with due consideration of balance of natural resources and fairness to power consumers. “Operations pertaining to the Fund” will be regulated by the Energy Regulatory Commission (ERC) in compliance with the policy framework prescribed by the National Energy Policy Council (NEPC). The money and assets belonging to the Fund are not subject to remittance to the Ministry of Finance as state revenue under the law on treasury balance and the law on budgetary procedure. The Office of the Energy Regulatory Commission (OERC) is responsible for the receipt, disbursement, keeping and management of the money of the Fund in conformity with the regulations set forth by the ERC, by separating the Fund account from the OERC budget. The operations pertaining to the Fund will be subject to inspection by the Office of the Auditor General of Thailand. “Sources of the Fund” comprise the following: (1) contributions from electricity industry licensees in accordance with the announcements issued by the ERC under the NEPC policy framework, (2) fines collected from electricity industry licensees who violate or fail to comply with ERC orders, (3) donated money or assets, and (4) interest or any benefit incurred from the money or assets of the Fund. In this regard, the ERC has set the criteria, procedures and conditions of sending contributions to the Fund, with distinct account separation according to the operations stipulated in Section 97(1) (2) (3) (4) and (5) pursuant to the regulations issued by the ERC under the NEPC policy framework, with due consideration of impact on power consumers who have to bear the burden of contribution sending to the Fund of electricity industry licensees. “Deployment of the Fund” will be in compliance with the objectives specified under Section 97 of the Energy Industry Act (2007) and the regulations prescribed by the ERC under the policy framework of the NEPC. The accounts of the Fund spending will be clearly separated by activity, as follows: 1 Fact Sheet: Power Development Fund (1) Section 97(1) to compensate and subsidize for electricity industry licensees who have provided services for underprivileged power consumers or to enhance extensive electrification or to support decentralization of development to provincial areas, with the following two objectives: (1.1) To compensate revenue among the Power Utilities to enhance extensive electrification or to support the policy on development decentralization to provincial areas. The Electricity Generating Authority of Thailand (EGAT) (2011-2015) and the Metropolitan Electricity Authority (MEA) will charge power consumers according to the power tariff structure and send contributions to the Fund to be used as revenue compensation to the Provincial Electricity Authority (PEA) at the rate prescribed by the ERC. (1.2) To subsidize electricity industry licensees who have provided services for underprivileged power consumers to enhance and support state policy. Electricity supply licensees will charge power consumers under the following categories: medium general services, large general services, specific business services, non-profit organizations, temporary power customers, interruptible rate customers and reserve power customers, according to the power tariff structure, and send contributions to the Fund to compensate electricity supply licensees for having provided services for underprivileged power consumers pursuant to the state policy and at the rate specified by the ERC. (2) Section 97(2) to compensate power consumers who have to pay the tariffs at a higher rate as the electricity system control licensee has ordered licensees who operate electricity industry to generate electricity in an unfair and discriminatory manner. In this regard, EGAT is the sole electricity system control licensee. (3) Section 97(3) to develop or rehabilitate localities affected by power plant operation. Presently, the ERC has issued an announcement pursuant to the policy framework of the NEPC, requiring electricity generation licensees to send contributions to the Fund, which can be divided into two cases, i.e. (1) during the plant construction, at a rate of 50,000 Baht/MW/year and must be no less than 50,000 Baht/year; and (2) during the plant commission, at a rate classified by fuel type used for power generation, ranging from 1-2 satangs/kilowatt-hour (kWh) (or satangs/unit), effective since January 2011, as shown in the following. Table 1: Contribution Rates to the Power Development Fund imposed on Electricity Generation Licensees during Commission Fuel Satang*/kWh Fuel Satang/kWh Coal, Lignite 2.00 Wind, Solar 1.00 Hydropower 2.00 Biogas, Biomass 1.00 Fuel oil, Diesel 1.50 Residues and wastes 1.00 Natural gas 1.00 Municipal Solid Waste 1.00 Other Renewable Energy 1.00 * 100 Satangs = 1 Thai Baht; approx. 35 Baht = 1 USD 2 Fact Sheet: Power Development Fund It is stipulated that the OERC allocate 95% of the obtained contributions for operations under Section 97(3) and 5% as the administrative cost of the Fund for operations under Section 97(6). (4) Section 97(4) to promote the use of renewable energy and technologies that have minimal impact on the environment, with due consideration of balance of natural resources and fairness to power consumers. The contribution sent to the Fund to be spent on the implementation under Section 97(4) is set at a rate of 0.005 Baht per unit of electricity sale in the billing month, effective since 31 December 2014. Consequently, electricity supply licensees commenced reporting their sending of contributions as from electricity sale in the billing month of January 2015 and started sending contributions to the Fund as from March 2015 onwards. (5) Section 97(5) to increase knowledge, awareness and participation of the public in power-related issues. The contribution sent to the Fund to be spent on the implementation under Section 97(5) is set at a rate of 0.002 Baht per unit of electricity sale in the billing month, effective since 31 December 2014. Consequently, electricity supply licensees commenced reporting their sending of contributions as from electricity sale in the billing month of January 2015 and started sending contributions to the Fund as from March 2015 onwards. (6) Section 97(6) to be used as the Fund administration cost, as a reserve in case of emergency to remedy or alleviate, in the first instance, damage caused by power plant operation, and as subsidies for development or rehabilitation of localities which are affected by power plant operation but for which the allocated money from the Fund is insufficient for such development or rehabilitation. 2. Structure and Management of Power Development Fund Money The Fund management is undertaken by the ERC with assistance of five relevant sub- committees, whose authority and duties can be summarized as follows. (1) The Energy Regulatory Commission (ERC) being responsible for policy setting and regulation of the Fund operation and money spending, granting approval of the Fund allocation and profit-making, including the appointment of Community Development Committees in areas surrounding power plants (CDCs) to manage the