2Nd Set of ERC and the Latter Was Graciously Appointed by HM the King on 4 July 2011, Comprising the Following Commissioners : 2Nd Set of ERC (2011 - Present)

Royal Speech by His Majesty the King Bhumibol Adulyadej

“The growth of the nation is the prosperity of all people, arising out of the work or acts of all people nationwide. It can be considered that everyone has performed his duty for the benefit of the country according to his skill and capability and has lent a hand to each other. No one can live and work for the nation on his own.”

An Excerpt from the Royal Guidance on the Occasion of the Bestowal of Degrees to Chulalongkorn University Graduates at Maha Chulalongkorn Building 10 July 1970 Contents

Royal Speech by His Majesty the King Bhumibol Adulyadej 2 Message from the Chairman of the Energy Regulatory Commission 4 Energy Regulatory Commission 6 Office of the Energy Regulatory Commission 8 Achievements in Fiscal Year 2011 16 Various Activities in Fiscal Year 2011 28 Financial Statements and Worksheet of the OERC and the Power Development Fund in Fiscal Year 2011 31 Action Plan for Fiscal Year 2012 57 Appendices 63 Appendix 1 : Summary of the Energy Regulatory Commission Meetings 64 in Fiscal Year 2011 Appendix 2 : Summary of the Minutes of Meetings of the Sub-Committees 126 under Section 24 of the Energy Industry Act B.E. 2550 (2007) Message from the Chairman of the Energy Regulatory Commission

The year 2011 has marked another important step forwards of the Energy Regulatory Commission (ERC) and the Office of the Energy Regulatory Commission (OERC) in materializing the development of energy industry regulation of the country, in accordance with the government policy, to be more effective to strengthen the national energy security, which is a key factor enhancing the country’s competitiveness in the international arena. There are two major achievements of the ERC in the 2011 fiscal year. The first one is the Regulation of Energy Prices, by reviewing Thailand’s electricity tariff structure for the period of 2011 – 2015, according to which

the Automatic Power Tariff Adjustment (Ft value) has been reset at zero so that the electricity price could best reflect the economic costs, and which has been effective since July 2011 onwards, including the regulation of natural gas transmission service tariff of PTT Public Company Limited, taking into account relevant factors in the future and actual variable costs. The second major achievement is the Enhancement of Energy Supply Security – in the 2011 Fiscal Year, the ERC has regulated power purchase from Small Power Producers (SPPs) through the Regulation for the Purchase of Power from Small Power Producers, under Firm Contracts, Using Cogeneration System, B. E. 2553 ( 2010), to be consistent with Thailand Power Development Plan 2010-2030, 2nd Revision, totaling 39 projects, with a total proposed sale capacity of 3,510 megawatts, as well as the power purchase from Very Small Power Producers that generate electricity from renewable sources through the Regulation for the Purchase of Power from Very Small Power Producers, exclusively for the Generation from Renewable Energy, B.E. 2549 (2006), totaling 1,339 projects with a total proposed sale capacity of 5,886.86 megawatts. In addition, the ERC has also featured the protection of benefits and the participation of energy consumers by encouraging local communities’ and public participation in the development and regulation of energy industry under the Energy Industry Act, B.E. 2550 (2007) (the Act) to ensure that the energy industry regulation has been carried out with transparency and fairness and that energy consumers nationwide have been protected. In so doing, the Regional Energy Consumer Committees (RECCs) have been set up in all 13 regions across the country to represent energy consumers in handling complaints of the people who have been affected by energy industry operations, giving advice to the ERC on the protection of energy consumers, and proposing corrective and improvement measures regarding energy service provision, and so on. On the part of the promotion of energy consumers’ participation, the Power Development Fund has been established. In the 2011 Fiscal Year, the ERC has issued several regulations and related announcements to support the operations of the Power Development Fund, including the recruitment of Community Development Committees (CDC) in areas surrounding power plants to manage the Power Development Fund in designated areas in accordance with the objectives set forth in the Act and to genuinely meet the needs of individual communities. The results of our operation over the past year have shown that the ERC together with the OERC have taken part in enhancing the efficiency and effectiveness of energy industry operations in Thailand in accordance with the direction and milestones of the energy industry regulation specified by the ERC. The regulation has been undertaken in accordance with the regulations, rules, announcements and requirements issued by the ERC and pursuant to the energy policy to strengthen energy security of the country under the Strategic Plan for Energy Industry Regulation, No. 1 (2008 - 2012). The ERC as well as the OERC would like to commit ourselves to enhancing energy industry regulation to be more effective and efficient, together with accountability to the public, entrepreneurs and Thai society, including the environment, which will lead to energy security so that the Thai economy would be driven to robust growth on a genuinely sustainable path.

Professor Emeritus Dr. Direk Lavansiri Chairman of the Energy Regulatory Commission

4 Annual Report 2011 Vision, Mission and Core Values

Vision To be the core agency that regulates energy industry operation with transparency in order to achieve the security of Thai energy industry, public confidence enhancement and reliability with international standards and acceptance.

Mission To regulate energy industry operation in order to establish a secure energy system that is reliable, efficient and fair for both energy consumers and energy industry operators, while remaining environmentally friendly, by adhering to fair and transparent execution of the defined duty and responsibilities for the benefit of sustainable development of the country in terms of social, economic and environmental aspects.

Core Values “TRUST,” an acronym reflecting the belief, value and desirable behavior in energy industry regulation, consists of :

Stakeholders can be confident in the ERC’s decisions and Trust T actions. The ERC will execute its duty without prejudice and the ERC’s Reliability and Consistency R decisions will be consistent over time. The ERC will work together with team spirit to achieve the Unity U defined vision. The ERC’s operation and decisions will be accountable and Social Accountability S open to public participation. The ERC’s operation, decisions, appeal process and complaint- Transparency handling will be transparent and in compliance with the law, T and Independence with high relevance to stakeholders and financial independence.

the Energy Regulatory Commission & Office of the Energy Regulatory Commission 5 Energy Regulatory Commission

With the enactment of the Energy Industry Act, aiming to restructure the energy industry management by separating the policy-making, regulatory function and energy industry operation from each other, greater opportunities are opened for the private sector, communities and the general public to participate and take roles in the industry so that the energy industry operation would be more effective and secure, rendering adequate and extensive supply of energy with fair prices and standard quality to meet the demand and enhance sustainable development of the country in the social, economic and environmental aspects. The ERC was set up under the Energy Industry Act to regulate the electricity and natural gas industry operation pursuant to the state policy, with the OERC serving as Secretariat to the ERC. The 1st set of ERC was graciously appointed by HM the King on 1 February 2008. 1st Set of ERC (2008 - 2011)

Mr. Chongchet Boonkerd Professor Emeritus Dr. Direk Lavansiri 5 1 Chairman, Energy Regulatory Commission Commissioner Mr. Nopadon Mantajit 6 Lt. Thaksin Limsuvan 2 Commissioner Commissioner

Mr. Chalit Ruengvisesh Dr. Supichai Tangjaitrong 3 7 Commissioner Commissioner 5 6 3 7 Dr. Pallapa Ruangrong 4 2 1 4 Commissioner

6 Annual Report 2011 According to the provision of Section 17 of the Act, it is stated that, at the initial term, after three years’ time, three Commissioners shall be discharged from office by drawing lots; such a discharge shall be regarded as the completion of the office term, and that a new set of Commissioners shall be selected to work instead of the previous one. In this regard, a Screening Committee had been appointed to select and nominate Energy Regulatory Commissioners, pursuant to Section 14 of the Act, and the list of new Energy Regulatory Commissioners had been proposed to the Minister of Energy for further submission to the Cabinet for approval. On 26 April 2011, the Cabinet approved the 2nd set of ERC and the latter was graciously appointed by HM the King on 4 July 2011, comprising the following Commissioners : 2nd Set of ERC (2011 - Present)

Professor Emeritus Dr. Direk Lavansiri Mr. Boonsong Kerdklang 1 Chairman, Energy Regulatory Commission 5 Commissioner 2 Mr. Nopadon Mantajit 6 Mr. Pisit Soontarerat Commissioner Commissioner Dr. Pallapa Ruangrong Mr. Sun Vithespongse 3 7 Commissioner 6 5 4 7 Commissioner Lt. Thaksin Limsuvan 2 1 3 4 Commissioner the Energy Regulatory Commission & Office of the Energy Regulatory Commission 7 Office of the Energy Regulatory Commission

The Energy Industry Act of 2007 (the Act) stipulates the establishment of the Office of the Energy Regulatory Commission, or OERC, to serve as the Secretariat to the ERC. The OERC is a state agency with the status of a juristic person under the ERC supervision and plays a key role in supporting duty execution of the ERC in order to achieve the objectives of the Act in the formation of balanced development in energy, economic, social and environmental dimensions, which will bring about efficient energy management system of Thailand and will enhance the national economic system to be competitive at both regional and global levels. The OERC organizational structure is as follows:

Organizational Structure of the Office of the Energy Regulatory Commission Energy Regulatory Commission Internal Audit Department

Secretary General Office of the Energy Regulatory Commission

Deputy Secretary General Deputy Secretary General Deputy Secretary General Office of the Energy Regulatory Commission Office of the Energy Regulatory Commission Office of the Energy Regulatory Commission Electricity and Natural Gas Industry Strategy and Corporate Regulatory Department Legal Department Communications Department Licensing Department Rights Protection Department Information Technology Department Energy and Environmental Engineering Land and Property Management Power Development Fund Department Department Management Department Regional Office Department Administrative Department

Commissioner Affairs Department

8 Annual Report 2011 1 2 3 4

Mr. Kawin Thangsupanich Mr. Atiluck Attapich 1 Secretary General 3 Deputy Secretary General

2 Mr. Pornchai Patiparnprechavut 4 Miss Narupat Amornkosit Deputy Secretary General Deputy Secretary General

the Energy Regulatory Commission & Office of the Energy Regulatory Commission 9 1 2 3 4 5

1 Mrs. KunphasVajanarat 3 Mr. Khomgrich Tantravanich 5 Mr. Kamon Pintong Director, Internal Audit Department Director, Licensing Department Director, Regional Office Department

Miss Narumon Intharak Mr. Tongkum Piyateravong 2 Director, Electricity and Natural 4 Director, Energy and Environmental Gas Industry Regulatory Engineering Department Department

10 Annual Report 2011 1 2 3 4

Mr. Prated Srichomphu Mr. Choosak Wongsavat 1 Director, Rights Protection Department 3 Director, Legal Department

Mr. Surasak Ruangchan Mr. Kittipong Pinyotrakool 2 Director, Land and Property Management 4 Director, Administrative Department Department

the Energy Regulatory Commission & Office of the Energy Regulatory Commission 11 1 2 3 4

Mrs. Ruedee Paringkan Miss Rangsima Pakkoh 1 Director, Power Development Fund Management 3 Director, Commissioner Affairs Department Department

2 Mr. Pornthep Chotinuchit 4 Mr. Niwet Jaratdamrong Director, Strategy and Corporate Communications Director, Information Technology Department Department

12 Annual Report 2011 Strategic Plan for Energy Industry Regulation (2008 - 2012)

In order to propel Thailand energy system to achieve the objectives of the Energy Industry Act, a Strategic Plan for Energy Industry Regulation for the period 2008 - 2012 has been established, comprising six strategies, to serve as a framework for duty execution of the ERC in the form of a 5-year action plan (2008 - 2012), which is a key mechanism leading to earnest, efficient implementation and promotion of the national energy system development in a suitable direction. Direction and Milestones of the Energy Industry Regulation

Lay Foundation Build Efficiency & Effectiveness Improve for Regulatory (2008 – 2009) (2010 - 2011) Modernization Excellence (2012 - 2014) (2015 - 2018)

Strategy Strategy Strategy No. 1 • To have energy industry licensing process that is efficient, with Licensing, regulation and protection international, transparent and fair criteria. the interests of energy consumers, • To regulate and monitor energy industry operation to meet service communities and the nation. quality standards, engineering and safety standards of the electrical system and natural gas transmission system so as to safeguard both short and long-terms interests of energy consumers, the community and the nation. Strategy No. 2 • To increase efficiency in the generation, transmission and distribution Promotion of efficient energy industry systems of electricity and natural gas. operation and use of energy. • To regulate the tariffs to be transparent and fair. Strategy No. 3 • To have good management of immovable property usage in the energy Promotion of good management and industry operation together with fair competition in the energy industry competition in the energy industry. and prevention of abusive use of monopoly power. Strategy No. 4 • To have the national energy structure that is secure, reliable and safe. Promotion of the national energy structure with security, reliability and safety. Strategy No. 5 • To establish Regional Energy Consumer Committees (RECCs) and Promotion of public participation in Power Development Fund as a mechanism to create participation of energy system development. various sectors in the energy system development. • To have various sectors take part in the development of energy industry regulation and energy efficiency improvement. • To increase public knowledge, understanding and awareness of energy industry regulation to create their motivation to participate in the energy system development. Strategy No. 6 • To establish a highly efficient, transparent and just management system Organizational development to be a high- that is internationally accepted. performance organization with a good image and ranked as national corporate excellence.

the Energy Regulatory Commission & Office of the Energy Regulatory Commission 13 14 Annual Report 2011

Achievements in Fiscal Year 2011

The year 2011 has into two main categories, namely, the electricity industry marked an another year of and the natural gas industry, and there are altogether success of the ERC and nine types of licenses. In the 2011 fiscal year, the ERC the OERC in building up had issued a total of 103 licenses -- 97 for the electricity efficiency of the electricity industry operation and 6 for the natural gas industry and natural gas industry operation. Having been taken into account were regulation in compliance the promotion of free and fair competition; technical, with the intention of the Energy Industry Act, that engineering and safety standards; and environmental is, to “regulate energy industry operation with standards to comply with the government policy, transparency to enhance security of Thailand including the need to ensure equal treatment among energy industry and to reassure public confidence.” the licensees who operate energy industry of the same In this regard, the ERC has put efforts to build up a category, size and nature. So far, the ERC has issued strong foundation to strengthen energy security to be regulations and announcements and has developed able to enhance vigorous and genuinely sustainable the methods and criteria for license issuance to meet growth of the economy, society and environment of the international standards, with transparency and Thailand along with the energy industry regulation, fairness. In addition, the ERC has set a policy to issue via the implementation of the Strategic Plan for regulations regarding the Codes of Practice (CoP) for Energy Industry Regulation, No. 1 (2008-2012). The environmental management of power plants that do not overall achievements under the Strategic Plan can be need to prepare the Environmental Impact Assessment summarized into four key aspects as follows : (EIA) Reports, according to the category and type of fuel, to determine standardized preventive, corrective 1. Energy Industry Regulation that Is and monitoring measures against the environmental Standardized, Fair and Reliable impact. 2. Promotion of Fair Competition In addition, under Section 48, the ERC is 3. Rights Protection and Participation of authorized to be the center for issuing other key operation Energy Consumers licenses (Single Window Service) in accordance with 4. Organizational Development to the laws related to energy industry operation, such as Regulatory Excellence a license for Construction or Modification of a Building (Orr 1) under the law on building control, and the 1. Energy Industry Regulation that law on city planning; a license for Factory Operation Is Standardized, Fair and Reliable (Ror Ngor 4) under the law on factory; a license for Regulated Energy Production (Por Kor 2) under the ► Licensing energy industry operation: law on energy development and promotion. This can The ERC regulates the energy industry through licensing, be done by requiring that the ERC ask for opinions, for by issuing regulations, criteria and conditions related to consideration of license granting, from the authoritative the granting of licenses for energy industry operation. agencies under those respective laws. In the 2011 According to Section 47 of the Energy Industry Act, it fiscal year, the ERC has issued various licenses under is required that energy industry operation, either with Section 48 to the electricity industry operators, totaling or without remuneration, shall have to obtain a license 203 licenses, which are divided into 108 licenses from the ERC, unless it is an energy industry category for regulated energy production and 95 licenses for that has been exempt from the license requirement. factory operation (Factory Category No. 88), totaling The energy industry under ERC regulation is divided 95 licenses, as detailed below.

16 Annual Report 2011 Table 1 : Licensing for Energy Industry Operation in the 2011 Fiscal Year 2011 Fiscal year No. of Licenses 1 October 2010 - 30 September 2011 License Type Granted from 2009 Generating No. of Licenses to September 2011 Capacity Granted (MW) 1. Electricity Industry License 384 97 1,663.80 1.1 Electricity Generation License 259 65 1,663.80 - Installed capacity not over 10 MW 148 40 154.40 - Installed capacity of 10 MW - 150 MW 71 23 940.40 - Installed capacity over 150 MW 40 2 569.00 1.2 Electricity Transmission System license 5 - 1.3 Electricity Distribution System License 61 16 1.4 Electricity Retail License 58 16 1.5 Electricity System Control License 1 - 2. Natural Gas Industry License 10 6 2.1 Natural Gas Transportation License through Pipeline 5 3 Natural Gas System 2.2 Gas Acquisition and Wholesale License 1 - 2.3 Gas Retail License through Natural Gas Distribution 3 2 System 2.4 Gas Storage and Transformation of Liquid to Gas 1 1 License Total 394 103 1,663.80

Table 2 : Licensing for Regulated Energy Production and Power Generation Facility Operation No. of Licenses 2011 Fiscal year Granted 1 October 2010 - 30 September 2011 License Type from 2009 to No. of Licenses Installed Capacity September 2011 Granted (MW) 1. Regulated Energy Production Licenses 816 108 8,996.00 1.1 New Application 275 55 3,031.00 1.2 Renewal 439 34 5,446.00 1.3 Generating Capacity Expansion 49 14 411.00 1.4 Renewal and Installed Capacity Expansion 53 5 108.00 2. Power Generation Facility Operation Licenses 215 95 1,071.00 Total 1,031 203 10,067.00

the Energy Regulatory Commission & Office of the Energy Regulatory Commission 17 • Development has been made on the will operate their businesses with higher standards licensing process through the electronic system to and quality of services, including the penalties and facilitate license applicants to be able to submit their random inspection of the energy industry operation, applications via one-stop service through the industry as well as the improvement of energy service quality operator web portal. This will be able to accommodate standards and the development of energy industry the processing of license applications in provincial facility inspection manual, including three aspects: 1) areas in a much shorter period of time. Moreover, all the engineering and safety standards; 2) the impact on databases associated with energy industry operation the environment and surrounding community, energy licensing have been integrated to be up-to-date and performance and efficiency, and the setting up of the accurate, which will contribute to effective energy online Continuous Emission Monitoring System (CEMS); industry regulation and development. In addition, a 3) the assessment of the electricity service quality Memorandum of Understanding (MOU) has been signed standards for the year 2011 and the improvement of with the Department of Industrial Works to serve as natural gas service quality standards by developing a cooperative agreement to support the revision of the requirements for service quality standards that are licensing scheme, involving consideration of license comparable with the international standards. granting for plant construction and others for energy industry operation, to be more effective and consistent ► Energy tariff regulation to ensure with the structure of Thailand energy sector and to fairness better meet the international standards and criteria. • The ERC has developed the criteria for • Guidelines have been established for determining the power tariff structure for the period the granting of energy industry operation licenses of 2011-2015 in accordance with the policy approved for the development of power plant projects that may by the National Energy Policy Council (NEPC) on cause severe impact on the community, in terms of 23 February 2011, which stipulates that the uniform environmental quality, natural resources and health tariff be applied across the country and be effective (EHIA projects), pursuant to Section 67, Clause 2, of from July 2011 onwards. In determining the tariff, the Constitution of the Kingdom of Thailand B.E. 2550 the ERC has taken into consideration the provision of (2007) and the Notification of the Ministry of Natural free electricity usage for low-income customers with Resources and Environment on the Determination power consumption not exceeding 90 units per month, of Criteria, Methods, Procedures and Guidelines for according to the government policy, and the promotion the Preparation of Environmental Impact Assessment of more efficient use of electricity. Under the new power Reports for projects or activities that may affect the tariff structure, the average tariff charged to power community severely in respect of environmental quality, consumers will not be higher than the previous one. natural resources and health. In this regard, the ERC • In this connection, the ERC has still has issued an order No. 048/2554, dated 13 September regulated electric power tariffs by using the automatic

2011, appointing a Public Hearing Committee to conduct power tariff adjustment mechanism (Ft formula) to reflect a hearing process to obtain opinions of the public and changes in such costs as fuel procurement, power

stakeholders on a Thermal Power Plant Project of purchase and the impact of state policies. The Ft value GHECO-One Co., Ltd., which is the first EHIA project will be adjusted every 4 months. In the 2011 fiscal

handled by the OERC. year, the Ft value was adjusted 4 times by the ERC, taking into account the costs of power generation, which ► Energy industry regulation to ensure include the cost of fuel used to generate electricity; greater efficiency: This is done by regulating, the cost of power purchase that changed from the monitoring, inspecting and developing service quality base tariff; exchange rates; and economic, social and standards, engineering and safety standards in the environmental circumstances that would affect the cost

energy industry through the establishment of conditions of living of the public, before the promulgation of the Ft and measures in order that the energy industry licensees value each time. Also, a hearing would be conducted 18 Annual Report 2011 Table 3 : Power Tariff Adjustment in accordance with the Ft Formula Retail F Rate F Rate Derived t Period t (collected from consumers) Change from Calculation (Unit : Satang/unit) September – December 2010 79.24 92.55 -13.31 January – April 2011 81.01 86.88 -5.87 May – June 2011 100.66 95.81 4.85 July – August 2011 0.00 -6.00 6.00 September – December 2011 -1.89 -6.00 4.11 Note : The tariffs are exclusive of VAT. through the website (www.erc.or.th) in conjunction with basis through the Power Development Fund, pursuant the consideration each time. Moreover, the ERC has to Section 97 (1) of the Energy Industry Act. considered taking the clawback, or the money taken • With regard to the regulation of natural back from Power Utilities as a result of lower investment gas transmission tariff of PTT Public Company than planned, to decrease the Ft value. Limited, the ERC has considered adjusting the tariff • In addition, the ERC has considered in accordance with the natural gas transmission tariff the cross subsidy among the Power Utilities (or the calculation method, and based on the calculation manual Financial Transfer) by determining the rate of return of natural gas pricing and natural gas transmission on invested capital (ROIC) of the three Power Utilities tariff issued by the Energy Policy and Planning Office, to be close to the weighted average cost of capital Ministry of Energy, taking into account relevant factors (WACC) in each of the electricity businesses. In the in the future and the operating costs in the part of year 2011, the financial transfer among the Power actual variable costs, the actual average growth rate Utilities was set at 13,379 million Baht. The Metropolitan of natural gas price, and the growth rate of Consumer Electricity Authority (MEA) and the Electricity Generating Price Index published by the Ministry of Commerce. Authority of Thailand (EGAT) were required to deliver The underutilized investment capital when compared the cross subsidy to the Provincial Electricity Authority with the investment plan, or the clawback, would be (PEA) at the amount of 3,528 and 9,851 million Baht, used to reduce the tariff of natural gas transmission. respectively. In this regard, the MEA and EGAT had The natural gas transmission tariffs can be summarized to remit the subsidy to the PEA on a monthly average as follows:

Table 4 : Natural Gas Transmission Tariffs through Natural Gas Pipelines in Five Zones Unit : Baht/million BTU Zone Fixed Cost (Td) Variable Cost (Tc) 1. Offshore natural gas transmission pipeline, in Rayong (Zone 1) 8.5899 1.1575 2. Offshore natural gas transmission pipeline, at Khanom (Zone 2) 14.2177 1.1575 3. Onshore natural gas transmission pipeline (Zone 3) 12.0654 1.1575 4. Onshore natural gas transmission pipeline, at Jana (Zone 4) 2.4855 0.0804 5. Onshore natural gas transmission pipeline, at Namphong (Zone 5) 2.2985 0.0037 Note : 1. Data as of August 2011 2. Natural gas transmission tariff through transmission pipeline systems for power plants in Zone 3 is equal to Td (Zone1) + Td (Zone3) + Tc = 21.8128 Baht per million BTU.

the Energy Regulatory Commission & Office of the Energy Regulatory Commission 19 • The ERC has approved the criteria from SPPs by considering the appropriateness and for determining the tariff for natural gas storage and ensuring that the level of SPP generating capacity is transformation of liquid to gas (LNG Receiving Terminal in accordance with the Power Development Plan (PDP) Tariff) by setting the rate of return to reflect the weighted 2010 - 2030 under the policy framework to strengthen average cost of capital (WACC) in order to determine energy security of the Ministry of Energy, which has been appropriate returns that a licensee should receive from approved by the NEPC, i.e. to purchase power from the investment. Also taken into consideration is the SPPs using Cogeneration System, with Firm Contracts, operational efficiency. The criteria will be temporarily totaling 3,500 MW. The electricity procurement from applied for a period of two years because LNG industry SPPs was undertaken by EGAT in accordance with the is deemed to be a commercial business. Moreover, the 2010 Regulation for the Purchase of Power from SPPs, tariff rate for a licensee operating natural gas storage with Firm Contracts, Using Cogeneration System, by and transformation of liquid to gas in the part of fixed issuing the announcement on power purchase as well cost has been set at 31.859 Baht per million BTU, and as developing a manual for deliberating power purchase variable cost at 1.705 Baht per million BTU; the rates proposals. In this regard, the ERC had regulated EGAT’s have been effective since July 2011. selection of cogeneration SPPs, resulting in 39 projects being selected, with a total offered capacity of 3,510 2. Promotion of Fair Competition MW. In the case where any SPP that has been notified of power purchase acceptance wishes to change the ► Regulation of electricity procurement Scheduled Commercial Operation Date (SCOD), EGAT following the regulations for the purchase of reserves the right to reset the SCOD so that it would power from Small Power Producers (SPPs): The correspond with the PDP 2010. Details of the power ERC has continuously regulated electricity procurement purchase are as follows : Table 5 : Status of Power Purchase from SPPs SPP Firm Non-Firm Total Status of Power Purchase Number Quantity Number Quantity Number Quantity (Project) (MW) (Project) (MW) (Project) (MW) Pending notification of purchase 2 16.3 14 924.0 16 940.3 acceptance Pending PPA signing 31 2,790.0 7 423.0 38 3,213.0 PPA signed 26 2,324.0 6 349.0 32 2,673.0 Supplying electricity to the grid 43 2,182.3 17 309.8 60 2,492.1 Total 102 7,312.6 44 2,005.8 146 9,318.4 Note : 1. SPPs with Firm Contracts mean private power producers with a proposed sale capacity to the EGAT system of more than 10 MW but not exceeding 90 MW, and the contract term is 20 - 25 years. 2. SPPs with Non-Firm Contracts mean private power producers with a proposed sale capacity to the EGAT system of more than 10 MW but not exceeding 90 MW, and the contract term is 5 years. ► Regulation of the purchase of power three Power Utilities were assigned to determine their generated from renewable energy: The ERC has readiness, taking into consideration four main issues, developed detailed criteria and conditions, including i.e. the acquisition of land suitable for power generation the draft announcement on adder provision for power business operation, the availability of source of fund, producers using renewable energy, and assigned the the technology supply readiness and the acquisition three Power Utilities to issue relevant power purchase of various licenses as required by related laws. announcements. In addition, the ERC has established Furthermore, the ERC has set guidelines for screening the criteria for assessing the readiness of SPPs, and SPPs and VSPPs that have already signed the PPAs to Very Small Power Producers (VSPPs) that have already identify those with capability to actually carry out their signed the Power Purchase Agreements (PPAs). The projects. Details of the power purchase are as follows: 20 Annual Report 2011 Table 6 : Status of Power Purchase from VSPPs VSPP (Data as of September 2011) Status of Power Purchase Cogeneration Renewable Total Number Quantity Number Quantity Number Quantity (Project) (MW) (Project) (MW) (Project) (MW) Pending notification of purchase 1 5.6 276 1,207.88 277 1,213.48 acceptance Pending PPA signing - - 184 587.10 184 587.10 PPA signed 8 34.8 687 3,584.25 695 3,619.06 Supplying power to the grid 4 9.9 192 507.62 196 517.52 Total 13 50.30 1,339 5,886.86 1,352 5,937.16 Note : 1. Cogeneration VSPPs mean very small private power producers that generate electricity using the system that generates both thermal energy and electricity, and the capacity supplied to the grid is up to 10 MW. 2. Renewable VSPPs mean very small private power producers that generate electricity from renewable energy, and the capacity supplied to the grid is up to 10 MW.

► Regulation of electricity procurement from Independent Power Producers (IPPs): The ERC has regulated electricity procurement from four IPPs that have been selected from the IPP bidding in 2007, with a total generating capacity of 4,400 MW.

Table 7 : Status of Power Purchase from IPPs Generating PPA Acquisition Project/Location Capacity Signing EIA Approval of Electricity SCOD (MW) Date Generation License 1. Gheco-One Co., Ltd., Map 660 10 Sep 2008 - EIA 15 May 2008 Pending presentation of 9 Nov 2011 Ta Phut Industrial Estate, (Coal) - EHIA approved on independent agencies’ Rayong Province 3 Aug 2011 opinions and public hearing results to the ERC for consideration 2. National Power Supply Co., 540 Not yet 3 Sep 2009 Not yet applied Originally Ltd., Phanom Sarakham (Coal) signed 15 Nov 2013 and District, Chachoengsao 15 Mar 2014, later Province postponed to 15 Nov 2015 and Mar 2016 3. Siam Energy Co., Ltd., 1,600 10 Oct 2008 Not yet approved Under consideration Originally Rojana Industrial Estate (Natural gas) and 1st due to change in 1 Mar 2013 and (Former location: Bangkla revision on project location 1 Sep 2013, later District, Chachoengsao 17 Jun 2009 postponed to Mar Province) 2015 and Sep 2015 4. Gulf JPNS Co., Ltd., 1,600 10 Oct 2008 20 Aug 2009 License obtained on Jun 2014 and Nongsang District, Saraburi (Natural gas) 1 Nov 2011 Dec 2014 Province (Formerly Power Generation Supply Co., Ltd.) Note : Data as of 30 September 2011.

the Energy Regulatory Commission & Office of the Energy Regulatory Commission 21 ► Provision of opinions on energy procurement plans and the power industry investment plan for the cabinet’s consideration: In order to ensure appropriateness of energy procurement plans and the power industry investment plan, the ERC has provided opinions on the national energy-related plans, in accordance with the authority and duties set forth under Section 11 (5) of the Energy Industry Act, involving Thailand Power Development Plan, the power industry investment plan and the energy network system expansion plan, which can be summarized below: Table 8 : Provision of Opinions on the National Energy-related Plans Energy Plan Related Project 1. Thailand Power • Thailand Power Development Plan 2010 – 2030, Revision 2 Development Plan 2. Power industry • Hydropower projects at Klong Tron dam, Kiew Kor Ma Dam and downstream investment plan of Chulabhorn dam • North Bangkok Power Plant, Block 2 3. Energy network • Main transmission system expansion project to accommodate power system expansion plan purchase from SPP Cogeneration Power Plants, in accordance with EGAT’s 2010 regulations for the purchase of power • EGAT’s project on renovation and expansion of aged transmission systems, Phase 1: high voltage transmission lines • EGAT’s transmission system development project in the areas of Loei and Nongbua Lamphu Provinces for power purchase from Lao PDR project • MEA’s electric power distribution system improvement and expansion plan, No. 10, 2008-2011 (revised edition) • PEA’s construction of 115-kV transmission system with submarine cable, 3rd circuit, to Koh Samui, Suratthani Province • EGAT’s transmission system development project for power purchase from Mai-khot thermal power plants • Transmission system interconnection project between Su-ngai Kolok high- voltage substation of EGAT and Rantau Panjang high-voltage substation of Tenega Nasional Berhad Co., Ltd. • PEA’s projects on the construction of distribution systems with submarine cables to various islands (Koh Kood, Koh Mak in Trat Province)

► Operation in support of Thailand plants fails to comply with the PDP 2010; and the energy security: The ERC has supported various study on the criteria and rights/benefits in return studies and research works for determining for offering an area for large power plant (IPP) measures to enhance energy security. Major construction, conducted jointly with the Ministry of projects in the year 2011 include the study on the Energy and the Ministry of Natural Resources and guidelines for utilization of power plants of which Environment, to obtain the information for further PPAs have expired to be an alternative for energy locating appropriate locations for IPPs to reduce procurement in case the development of new power opposition to large power plant development.

22 Annual Report 2011 ► Regulation of the codes regarding the connection to electricity network systems of the three Power Utilities and the codes regarding the natural gas network system of PTT: The ERC has considered energy network connections to ensure their compliance with the principles set forth under Section 81 of the Energy Industry Act, i.e. such system connections must not affect the security, safety and quality of the energy system; the energy network connections shall be fair or shall not discriminate any person requesting connection to the energy network systems, so as to optimize the use of the infrastructure and to open the investment opportunity with cost-effective returns, in both financial and economic terms.

3. Rights Protection and Participation of Energy Consumers

► Regulation to ensure fairness to by the ERC in all 13 regions, comprising a total of energy consumers and those affected by 143 members, which was completed on 1 August energy industry operation: The ERC has 2010. The RECCs are tasked with consideration provided opportunities for public participation in the of complaints from energy consumers and those development and regulation of energy industry under who are affected by energy industry operation in the Energy Industry Act, and in the management and accordance with the ERC Regulation on Criteria on inspection by the local residents, the community and Lodging, Receipt and Deliberation of Complaints the public, as well as the provision of opportunities of Energy Consumers on Difficulties and Disputes for energy consumers in each region to take part in between Energy Consumers and Licensees, B.E. the management and inspection of energy industry 2553 (2010). For the 2011 fiscal year, consideration operation. This is done via the appointment of has been completed for 46 cases. Regional Energy Consumer Committees (RECCs)

Table 9 : Number of Complaint Consideration in Fiscal Year 2011

Consideration Under Total Type of Complaints Completed Consideration (Case) 1. Complaints under Section 100, regarding energy consumers’ being adversely 13 12 25 affected by service of a licensee 2. Complaints under Section 103, regarding doubts about incorrect or unfair 13 9 22 collection of service fee of a licensee 3. Complaints under Section 90, regarding request for electricity service 10 10 20 extension to a particular locality, or where the service is not extensive or is inadequate to the need of energy consumers 4. Complaints against power plant construction 5 - 5 5. Complaints against operators about wastewater discharge and soot emission 5 - 5 Total (case) 46 31 77

In addition, the OERC has provided new and more convenient channels for complaint lodging; currently, complaints can be lodged via telephone, by post, via OERC website and through the 13 OERC Regional Offices.

the Energy Regulatory Commission & Office of the Energy Regulatory Commission 23 ► Creating mechanisms for various process, knowledge of administrative law/public law and sectors’ participation: This has been done through negotiation/reconciliation techniques. the Stakeholder Rights Protection Networks. In the 2011 fiscal year, activities had been conducted in four ► Regulation on the management regions, including Region 1 (Chiang Mai Province), of immovable property utilization for energy Region 5 (Ubon Ratchathani Province), Region 8 network system construction: To maximize the (Chonburi Province) and Region 9 (Kanchanaburi use of immovable property for energy procurement to Province), as a channel to reflect the level of satisfaction all regions in the country, along with providing fairness with energy industry regulation and operation, to learn to the property owners, the ERC has revised the criteria about problems which will contribute to the improvement for land compensation to provide greater fairness to of regulations, rules, announcements or requirements persons affected by energy network system areas, pertaining to energy industry regulation. In addition, the by determining the compensation for the land to be OERC has given importance to the capacity building of covered an electricity network system area at a rate of the Regional Energy Consumer Committees and the 90 percent of the determined land price, and for the Stakeholder Rights Protection Networks by organizing land to be covered by a natural gas network system training courses to provide knowledge about the laws area at a rate of 100 percent of the determined land on energy industry operation, creation of a participatory price.

24 Annual Report 2011 Table 10 : Property Utilization Charge or Compensation Property Utilization Charge or Compensation Property Utilization Charge or according to the Electricity Generating Authority of Compensation according to ERC Thailand Act (1968) Proclamation 1. Land Compensation 1. Land compensation for all types of land: 1.1 Farmland: 50 percent of the specified price 90 percent of the specified prices 1.2 Horticultural land: 70 percent of the specified price 1.3 Residential land: 90 percent of the specified price 2. Compensation for land to be used for pole location: 2. Compensation for land to be used for pole 100 percent location: 100 percent Source : Proclamation of the ERC on Criteria, Procedures and Conditions of Determination and Payment of Compensation, 2009.

In the 2011 fiscal year (October 2010 up to consumers pursuant to the government policy; or to May 2011), the ERC granted approval for licensees provide extensive electricity services, all of which are to issue notifications on demarcation of exploration the operations under the policy framework defined in the zones for five energy network systems and approved Energy Industry Act, in the 2011 fiscal year, the ERC the announcements on demarcation of the areas for set several guidelines for the management of the Fund 10 energy network systems. Consideration was also for carrying out activities in accordance with various made of appeals against the amount of compensation sections of the Energy Industry Act. Key issues can for property covered by energy network system areas, be summarized as follows: totaling 298 cases. 1. Issuance of the ERC Regulation on the Power Development Fund, B.E. 2553 (2010), effective ► Assessment of service quality since 21 December 2010, to provide guidelines for the standards and surveys of energy consumers’ management and monitoring of the Fund operations satisfaction towards service provision of the concerning the receipt, disbursement, keeping and three Power Utilities: This has been done in order monitoring the effectiveness of the Fund utilization, as to use the survey results for carrying out regulation and a whole. making suggestion to improve the service quality of the 2. Issuance of the ERC Regulation on Power Utilities to be more efficient and better meet the the Power Development Fund for Development or needs of energy consumers. Moreover, satisfaction Rehabilitation of Localities Affected by Power Plant surveys on energy industry regulation and service Operation, B.E. 2553 (2010), which took effect on provision of the ERC and the OERC have also been 9 February 2011, to provide guidelines for the Fund conducted to bring the survey results into consideration operation in a designated area, by decentralizing when reviewing the Strategic Plan for Energy Industry the administrative power to local people in the areas Regulation and when preparing the OERC Action surrounding a power plant through the Community Plan in order to improve service quality and increase Development Committee (CDC) mechanism, which efficiency of energy industry regulation. In this regard, constitutes two-thirds of the total CDC members. In this energy consumers could fill in the satisfaction survey regard, the ERC will regulate and monitor the overall questionnaires online via the OERC website. administration of the Fund. • Power Development Fund Operation: 3. Issuance of the ERC Regulation on In order that the operation of Power Development Fund Sending of Contributions to the Power Development (the Fund) would be in compliance with the intention of Fund Imposed on Electricity Generation Licensees, the Energy Industry Act, which aims to protect various B.E. 2553 (2010), which took effect on 21 December groups of energy consumers, such as low-income 2010. As a result, the electricity generation licensees energy consumers and the community affected by power are required to send contributions to the Fund as from plant operation; to safeguard underprivileged electricity January 2011 onwards.

the Energy Regulatory Commission & Office of the Energy Regulatory Commission 25 4. Issuance of the OERC announcements, 4. Organizational Development to determining designated areas, relevant Fund Regulatory Excellence management categories and the number of CDC members of individual funds, totaling 145 funds, divided ► Institutional management: The ERC into: Fund Category A, 10 funds; Fund Category B, 28 has set the organizational development plan on the funds; and Fund Category C, 107 funds. The Fund basis of the Public Sector Management Quality Award management categories and the number of CDC (PMQA), which applies the criteria and concepts of the members will vary according to the generating capacity Total Quality Award (TQA) to suit the context of the of concerned power plants in each area. public sector agencies with a view to upgrading the 5. As for the recruitment of a Power quality and performance standards of the public sector Development Fund Committee to manage the Fund in agencies to meet the international standards. This each designated area, the ERC has issued the following has been continuously implemented since 2010, with three announcements: (1) the ERC Announcement on the setting up of an ad hoc working group to study the the Selection of a Community Development Committee PMQA criteria and prepare a report on the analysis and (2011), (2) the ERC Announcement on the Selection of a evaluation of the organization in accordance with the Tambon (Sub-district) Development Committee (2011), mentioned criteria, for further submission to the Office and (3) the ERC Announcement on Procedures and of the Public Sector Development Commission (OPDC) Methods of the Selection of a Community Development for the PMQA award consideration. Committee and a Tambon Development Committee (2011), to provide guidelines for recruiting CDCs and ► Risk management and internal TDCs to manage the money of Power Development control: The ERC has laid down the policy on Funds in their respective designated areas. risk management and internal control to reduce the 6. With regard to energy service provision likelihood and impact of risk factors on the operation, to underprivileged power consumers according to and to be the guidelines for all internal departments the government policy, the ERC has issued an ERC to implement their risk management along the same Order on Sending Contributions to and Disbursement line across the organization, as defined in the risk of Money from the Power Development Fund by management policy, so that the OERC could execute Government Agencies to Subsidize Underprivileged the duty to achieve the mission and vision set out in Power Consumers, dated 26 August 2011, to allow the the Strategic Plan for Energy Industry Regulation, No. use of money from the Fund to subsidize residential 1 (2008-2012). This has been done by managing the power consumers, having installed a 5 (15)-amperes risks to be at an acceptable level (Risk Appetite) within power meter and using electricity no more than 90 units the acceptable framework (Risk Tolerance), which will per month, to benefit from free electricity consumption. help track progress of the risk management plan to This is a public service obligation (PSO) pursuant to ensure its efficiency and to be able to improve or solve the government policy. incidents, problems and obstacles that may arise. 7. As for the enhancement of extensive electrification to decentralize development to provincial ► Personnel administration areas, the ERC has issued an ERC Order on Sending development: The ERC has arranged a welfare Contributions to Power Development Fund for Cross system for its employees by appointing a Welfare Subsidization among the Power Utilities, dated 12 Committee to improve the welfare of employees, May 2011, to compensate for extensive provision of organize team-building and recreational activities of the electricity and to support the policy on decentralization OERC, and develop a capacity building plan to provide of development to provincial areas, by collecting 2,650 training and build up energy personnel. Moreover, million Baht from EGAT and 7,255 million Baht from the the competency levels of OERC staff members and MEA to compensate the PEA at the amount of 9,905 employees have been defined so that guidelines on million Baht. 26 Annual Report 2011 competency evaluation of the OERC staff members more intra-communication channels. Apart from this, the and employees could be set up accordingly to enhance creation of a learning organization has been encouraged their duty execution with efficiency and effectiveness, by organizing, on a continuous basis, various activities to achieve the goals according to the Vision, Mission, to stimulate the personnel’s interest. Strategies and Core Values of the organization. • Creation of technical cooperation and provision of support for research and development ► Integration of the information technology with energy-related organizations: This has been (IT) systems: This is to enable data connections among continuously carried out, such as the organization internal departments of the OERC, which will facilitate of training and seminars under the collaboration fast and convenient operation as well as support the project with the National Association of Regulatory use of data for decision making of the ERC and the Utility Commissioners (NARUC) to develop energy OERC management. In addition, training has been regulatory capability of the OERC personnel with arranged for the personnel on the use of various IT regard to Integrated Resources Planning (IRP) and systems that have been designed and installed during public participation. Also organized was the second the “Lay Foundation” stage. Currently, there are international technical seminar to be a cooperative altogether 17 IT systems in use, such as one IT system platform of energy regulatory commissions in Asia to support the management decision-making, i.e. Data (Regulator Forum) during 23-24 March 2011, under Warehouse; 7 IT systems for services provision, such the theme of “Energy Sustainability,” to raise energy as e-Licensing, CEMS, e-Petition, and the accounting regulation standards to be on par with international system for Power Development Fund management and standards. finance. Moreover, there are 8 IT systems for the office In addition, cooperation has been operation, such as the Enterprise Resource Planning, established with the Stock Exchange of Thailand e-Budgeting, Knowledge Management (KM), e-Meeting (SET) to exchange knowledge; to build up technical and e-Tracking Reporting systems. cooperation; to provide knowledge to entrepreneurs who are interested in the energy industry, particularly ► Knowledge management in the about the licensing process; and to educate energy energy industry regulation: The OERC has industry licensees to have understanding of the role established strategies, created tools and processes and mechanism of the capital market as an important that will lead to the creation of a learning organization source of fundraising for the industry development; the and adaptability to changes, as well as the build-up of development of internal management system readiness; a positive attitude of its personnel so that the OERC good industry regulation system and risk management, would have efficient personnel to continuously carry to increase their companies’ competitiveness and out the duty of energy industry regulation, which can growth so that they could be listed on the SET. be summarized as follows: • Development of learning and teaching • Knowledge Management by the OERC: on energy via electronic media (e-Learning): This is Various activities have been conducted to tap into aimed to increase knowledge of employees and the the knowledge of OERC personnel with expertise for general public through self-learning. There are currently the optimum benefits of the organization, such as the 10 modules available for e-Learning, involving more training of Energy Regulatory Domain Knowledge, than 30 subjects, accounting for more than 500 hours organization of Lunch Talks, creation of Knowledge of online teaching. To date, more than 1,000 persons Engineer, and Knowledge Capture. In addition, the have enrolled. Public relations on e-Learning have been IT system (KM Portal) has been brought in to support intensified so that the enrollment would be increased working coordination within the OERC and with the with a wider range of target groups nationwide. Regional Offices, resulting in information sharing and

the Energy Regulatory Commission & Office of the Energy Regulatory Commission 27 Various Activities in Fiscal Year 2011

October 2010 February 2011

• The OERC organized a • A seminar was organized “Knowledge Management Day,” a on lesson learned visualizing from seminar for the management and the work in the past six months employees to create awareness and of RECCs, under the theme “ERC understanding of the importance of Meets RECCs,” to sum up the knowledge management as well operational results and the outcome as the process leading to actual of the project on development of RECCs’ knowledge needed for their duty implementation. execution, under the “RECC Knowledge Sharing” project, held in four regions across the country, which ended in December 2010. Executives November 2010 from PEA and MEA also attended the seminar to discuss guidelines on cooperation with the RECCs in all 13 regions, to benefit electricity • The OERC, led by Secretary consumers across the country. General Kawin Thangsupanich, organized a seminar on “RECCs March 2011 safeguard the consumers, care for the operators to enhance sustainable • The Opening Ceremony Thailand energy,” with participation of the 13 OERC Regional Offices, of the media and interested public, to at Sofitel Centara Grand Bangkok, create knowledge and understanding presided over by the Minister of about the protection of rights and Energy (Dr. Wannarat Channukul). benefits of energy consumers. December 2010 • A seminar on “Regulation and the Energy • Educational forums were Sustainability Forum” and organized to create knowledge and “2011 Regulator Forum” at The awareness of energy (corporate Sukhothai Hotel, Bangkok. communication and provision of knowledge about the work on energy • The “RECC Knowledge industry regulation) in Region 8 areas, Sharing 2” project on “Knowledge covering five provinces, namely: about Energy System” to build up Chanthaburi, Trat, Chachoengsao, capacity of RECCs with accurate Rayong and Chonburi, with about and comprehensive knowledge 1,000 participants altogether. and understanding about energy to be ready to perform their duties efficiently. This was conducted by organizing discussion forums about the future of Thailand energy with participation of RECCs, speakers from the Association of Energy and Environmental Management, as well as OERC executives and officials. Three discussion forums were conducted at Ratchaprapha Dam, Surat Thani Province; Srinagarindra Dam, Kanchanaburi Province; and Ubonrat Dam, Khon Kaen Province. 28 Annual Report 2011 April 2011

• A hearing on “Criteria on Determining Thailand electricity tariff structure for the year 2011-2015” at the Ballroom, The Emerald Hotel, Bangkok, attended by a large number of participants from government and private sector agencies, state enterprises, academics and experts, associations, NGOs and electricity generation companies, including electricity consumers. • Press conference on the overview of ERC and OERC operational performance on the occasion of the ERC’s 3rd anniversary since its appointment, according to the Energy Industry Act, on 1 February 2008 up to April 2011, covering a period of about 3 years and 3 months. The ERC has regulated the electricity and natural gas industry with transparency and fairness to lay the foundation for secure and sustainable energy development of the country.

July 2011 May 2011 • Announcement on designated areas, • The OERC set types of the Power Development Fund up an exhibition booth management in each designated area, and the on “ERC e-Learning number of Community Development Committee Project” at the 17th (CDC) members, comprising Fund Category Annual Workshop on A: 10 funds, and Fund Category B: 28 funds. “Science, Technology The designated areas are areas eligible for and Innovations,” to be applied to the solving of economic financial support from the Power Development problems, organized by the Science, Technology and Fund, covering Tambons, or sub-districts, Innovation Association of Thailand (STIA). around a power plant within a radius of 1, 3 or 5 kilometers, based on the amount of electricity generated in a given year. June 2011

• The ERC signed an agreement on cooperation with the Oregon Public Utilities Commission (OPUC) and Washington Utilities • The announcement on Thailand and Transportation Commission (WUTC), U.S.A., to carry electricity tariff structure to be enforced during out activities contributing to institutional capacity building 2011-2012, starting from the electricity billing on energy industry regulation and exchange of knowledge, round of July 2011 onwards. skills and experience to be on par with leading international energy regulatory agencies.

the Energy Regulatory Commission & Office of the Energy Regulatory Commission 29 August 2011 September 2011

• The OERC has signed a memorandum • Educational forums were organized to of agreement on cooperation with Mr. Charamporn create knowledge and awareness of energy (corporate Jotikasthira, President & CEO of the Stock Exchange of communication and provision of knowledge about the Thailand (SET), to strengthen entrepreneurs’ knowledge work on energy industry regulation) in Regions 1, 5 and understanding about fundraising in the SET and and 9, covering 18 provinces (Region 1: Chiang Rai, the MAI (Market for Alternative Investment), to increase Phayao, Lampang, Lumpoon, Mae Hong Son, Chiang the potential and strength of Thailand energy industry Mai/ Region 5: Ubon Ratchathani, Si Sa Ket, Mukdahan, and to facilitate energy business operators to access Amnat Charoen, Yasothon, Kalasin, Roi Et and Maha fundraising sources in the Stock Market with greater Sarakham/ Region 9: Kanchanaburi, Nakhon Pathom, convenience and efficient outcome. Suphanburi, Samut Sakhon), with approximately 2,300 participants altogether.

• ERC Chairman presided over the Grand • The OERC introduced three new Energy Opening “Energizing your experience with ERC Regulatory Commissioners, i.e. Mr. Boonsong e-Learning 2011” – the teaching modules and short-term Kerdklang (middle), Mr. Pisit Soontarerat (fourth from training via e-Learning, totaling 10 modules, to provide right) and Mr. Sun Vithespongse (second from right), the general public with comprehensive knowledge replacing the Commissioners who had retired from and understanding about energy through the website: office, who will regulate the electricity and natural gas www.erc.or.th/e-Learning. Other Energy Regulatory industry of the country to be secure, transparent and Commissioners and the OERC Secretary General also fair. attended the event at Chamchuri Square Building.

30 Annual Report 2011

Auditor’s Report

To: The Energy Regulatory Commission

The Office of the Auditor General of Thailand has audited the consolidated and separate statements of financial position of the Office of the Energy Regulatory Commission as at 30 September 2011 and 2010,the consolidated and separate statements of income of the Office of the Energy Regulatory Commission, the consolidated and separate statements of changes in capital position of the Office of the Energy Regulatory Commission, and the consolidated and separate statements of cash flows for the years then ended of the Office of the Energy Regulatory Commission and the Power Development Fund. The Entity’s management is responsible for the correctness and completeness of information presented in these financial statements. The responsibility of the Office of the Auditor General of Thailand is to express an opinion on these financial statements based on the audits.

The Office of the Auditor General of Thailand has conducted the audits in accordance with generally accepted auditing standards, which require that the Office of the Auditor General of Thailand plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. The audits include examination of the evidence supporting the items, both the amounts and disclosures of information, in the financial statements, the assessment of suitability of the accounting principles used and significant financial estimates made by the management, as well as evaluating the overall financial statement presentation. The Office of the Auditor General of Thailand believes that the audits provide a reasonable basis for the opinion.

32 Annual Report 2011 In the opinion of the Office of the Auditor General of Thailand, the aforementioned consolidated and separate financial statements of the Office of the Energy Regulatory Commission present fairly, in all material respects, the consolidated and separate financial position of the Office of the Energy Regulatory Commission as at 30 September 2011 and 2010, the results of consolidated and separate operations, and the consolidated and separate cash flows of the Office of the Energy Regulatory Commission for the years then ended of the Office of the Energy Regulatory Commission and the Power Development Fund, and of the Office of the Energy Regulatory Commission in accordance with generally accepted accounting principles.

(Mrs. Rungnapa Chareonkunwiwat) Director of Financial Audit Office

(Ms. Rutaichanok Sitthiphan) Auditor-in-Charge

the Energy Regulatory Commission & Office of the Energy Regulatory Commission 33 Office of the Energy Regulatory Commission and Power Development Fund Statement of Financial Position as at 30 September 2011 and 2010

Unit : Baht 2011 2010 Consolidated Separated Separated for Separated for OERC Power Development for OERC Note Fund Assets Current Assets Cash and cash equivalents 4 1,752,137,003.91 568,872,788.20 1,183,264, 215.71 574,388,057.05 Account receivable 5 408,358,313.69 13,671,030.56 394,687,283.13 3,093,711.97 Account receivable – internal borrowings 6 13,086,035.58 13,086,035.58 - 14,223,339.20 Accrued revenues 7 2,983,915,132.18 643,238.43 2,983,271,893.75 177,500.53 Short-term investment 8 501,931,506.86 - 501,931,505.86 - Supplies 9 770,716.03 770,716.03 - 1,449,145.31 Other current assets 10 7,872,784.43 7,872,784.43 - 9,970,147.54 Total Current Assets 5,668,071,492.68 604,916,593.23 5,063,154,899.45 603,301,901.60 Non-current Assets - Property, plant and equipment – Net 11 76,641,813.54 76,641,813.54 - 62,182,919.64 Total Non-current Assets 76,641,813.54 76,641,813.54 - 62,182,919.64 Total Assets 5,744,713,306.22 618,588,406.77 5,063,154,899.45 665,484,821.24 Liabilities and Capital Current Liabilities Account payable 12 24,643,061.19 24,643,016.19 - 20,779,878.84 Accrued expenses 13 2,399,224,879.68 12,971,035.58 2,386,253,844.10 14,224,739.20 Deferred state revenue to the Ministry of Finance 14 86,057,893.81 86,057,893.81 - 58,362,925.11 Other current liabilities 15 18,906,119.45 18,661,305.45 244,814.00 12,155,251.90 Total Current Liabilities 2,528,831,909.13 142,333,251.03 2,386,498,658.10 105,522,795.05 Total Liabilities 2,528,831,909.13 142,333,251.03 2,386,498,658.10 105,522,795.05 Capital Surplus to accumulated expense 3,215,881,397.09 539,225,155.74 2,676,656,241.35 559,962,026.19 Liabilities and Capital 5,744,713,306.22 681,558,406 .77 5,063,154,899.45 665,484,821.24

The accompanying notes are an integral part of these financial statements.

(Mr. Kawin Thangsupanich) (Mr. Kittipong Pinyotrakool) Secretary General, Office of the Energy Regulatory Commission Director, Administrative Department

34 Annual Report 2011 Office of the Energy Regulatory Commission and Power Development Fund Statement of Income and Expenditure for the Years Ended 30 September 2011 and 2010

Unit : Baht 2011 2010 Consolidated Separated Separated for Separated for OERC Power Development for OERC Note Fund

Operating Revenues Income from fees/contributions 16 15,842,587,019.40 662,059,045.51 15,180,527,973.89 591,856,242.15 Other incomes 17 22,482,264.27 8,977,121.31 13,505,142.96 5,023,865.25 Total Operating Revenues 15,865,069,283.67 671 ,036,166.82 15,194,033,166.85 596 ,880,107.40

Operating Expenses Expense on human resources 18 137,425,917.85 137,425,917.85 - 93,283,033.60 Expense on operations 19 425,251,088.68 425,251,088.68 - 299,653,348.27 Depreciation and amortization 11, 20 25,142,264.09 25,142,264.09 - 13,111,952.06 Cost subsidies 21 12,526,356,875.50 8,980,000.00 12,526,356,875.50 6,934,000.00 Other expenses 22 133,475.80 133,475.80 - - Total Operating Expenses 13,114 ,309,621.92 596 ,932,746.42 12,517,376,875.50 12,982,333.93 Surplus to Net Expenses 2 ,750,759,661.75 74 ,103,402.40 2 ,676,656,241.35 183,897,773.47

The accompanying notes are an integral part of these financial statements. *This financial statement includes the Power Development Fund which started operation in the 2011 fiscal year (as from 21 December 2010)

the Energy Regulatory Commission & Office of the Energy Regulatory Commission 35 Office of the Energy Regulatory Commission and Power Development Fund Statement of Changes in Capital Position for the Years Ended 30 September 2011 and 2010

Unit : Baht 2011 2010 Consolidated Separated Separated for Separated for OERC Power Development for OERC Note Fund

Surplus to accumulated expense at the beginning balance 559,962,026.19 559,962,026.19 - 450,966,882.95 Less Additional remittance of previous-year state revenue 14 (8,782,397.04) (8,782,397.04) - (16,539,705.12) 551,179,629.15 551,179,629.195 - 434,427,177.83 Surplus to net expenses 2,750,759,661,75 74,103,420.40 2,676,656,241.35 183,897,773.47 Less Deferred state revenue to the Ministry of Finance 14 (86,057,893.81) (86,057,8 93.81) - (58,362,925.11) Surplus to accumulated expense at the ending balance 3,251,881,397,09 539,225,155.74 2,676,656,241.35 559,962,026.19

36 Annual Report 2011 Office of the Energy Regulatory Commission and Power Development Fund Statement of Cash Flows for the Years Ended 30 September 2011 and 2010

Unit : Baht 2011 2010 Consolidated Separated Separated for Separated for OERC Power Development for OERC Note Fund Cash Flows from Operating Activities Surplus to net expenses 2,750,759,661.75 74,103,420.00 2,676,656,241.35 183,897,773.47 Adjustments for: Depreciation 11, A 25,002,375.08 25,002,375.08 - 13,027,206.36 Loss from asset amortization C 133,475.80 133,475.80 - - Interest income (21,383,642. 48) (7,878,698.68) (13,504,943.80) (4,409,368.80 Surplus to Net Expense from Operating 2,754,511,870.15 91,360,572.60 2,663,151,297.55 192,515,611.03 Activities before Changes in Operating Assets and Liabilities Decrease (Increase) in account receivable (405,264,601.72) (10,577,318.59) (394,687,283.13) 237,411.50 Increase in accrued revenues (2,974,056,268.23) - (2,974,056,268.23) - Decrease (Increase) in borrowing account receivable 1,137,303.62 1,137,303.62 - (9,724,310.18) Decrease (Increase) in supplies 678,429.28 678,429.28 - (1,252,875.49) Decrease (Increase) in other current assets 2,097,363.11 2,097,363.11 - (6,437,389.88) Increase in account payable (exclude asset payable) 8,326,232.38 8,326,232.38 - 11,964,875.53 Increase (Decrease) in accrued expenses 2,385,000,140.48 (1,253,703.62) 2,386,253,844.10 9,735,784.20 Increase in deferred state revenue to the Ministry of Finance (67,145,322.15) (67,145,322.15) - (43,848,434.04) Increase in other current liabilities 6,619,495.30 6,374,681.30 244,814.00 4,177,637.46 Cash Inflows from Operating Activities 1,711,904,642.22 30,998,237.93 1,680,906,404.29 157,368,310.13 Actual Interest Income 11,702,279.06 7,412,960.78 4,289,318.28 4,447,634.86 Net cash provided by operating activities 1,723,606,921.28 38,411,198.71 1,685,195,722.57 161,815,944.99 Cash Flows from Investing Activities Cash inflows from fixed asset amortization C 950,000.00 950,000.00 - - Cash payment for fixed assets B (44,876,467.56) (44,876,467.56) - (52,250,614.66) Short-term investment 8 (501,931,506.86) - (501,931,506.86) - Net cash used in investment activities (545,857,974.42) (43,926,467.56) (501,931,506.86) (52,250,614.66) Net Increase in Cash and Cash Equivalents 1,177,748,946.86 (5,515,268.85) 1,183,264,215.71 109,565,330.33 Cash and Cash Equivalents at Beginning of the Year 574,388,057.05 574,388,057.05 - 464,822,726.72 Cash and Cash Equivalents at Ending of the Year 4 1,752,137,003.91 568,872,788.20 1,183,264,215.71 574,388,057.05

the Energy Regulatory Commission & Office of the Energy Regulatory Commission 37 Office of the Energy Regulatory Commission and Power Development Fund Statement of Cash Flows for the Years Ended 30 September 2011 and 2010

Notes to the Statement of Cash Flows (exclusively for the OERC) A. The OERC’s depreciation cost of donated assets in 2011 was 139,889.01 baht. B. Asset payable at the beginning balance was at the amount of 4,851,291.03 baht. In 2011 the OERC purchased additional fixed assets at the amount of 72,988,500.81 baht (transfer of work in process at a value of 26,743,867.02 baht, equipment suspense account at 5,560,000 baht and assets from donation at 271,261.26 baht), with liability payment at 44,876,467.56 baht; as of 30 September 2011, the accrued asset payable was at the amount of 388,196.00 baht. C. In 2011, the OERC had one vehicle and transportation expense amortization, with the historical cost at 1,359,000 baht, accumulated depreciation at 275,524.20 baht, and accidental indemnity received at 950,000 baht; loss from amortization was, therefore, at 133,475.80 baht.

The accompanying notes are an integral part of these financial statements. *This financial statement includes the Power Development Fund, which started operation in the 2011 fiscal year (as from 21 December 2010).

38 Annual Report 2011 Office of the Energy Regulatory Commission and Power Development Fund Notes to Financial Statements for the Years Ended 30 September 2011 and 2010

1. Background and authoritative roles 1.1 Background The Energy Industry Act, B.E. 2550 (2007) (“the Act”), is a law enacted to accommodate the policy on national energy industry management restructuring, according to which the functions of energy policy making, regulation and energy industry operation are clearly separated from each other, aiming to enhance greater participation and roles of the private sector, communities and the general public as well as to achieve efficient, secure, adequate and extensive energy industry operation with fair pricing and standard quality responding to the demand and sustainable development of the country in terms of social, economic and environmental aspects; the Act has been effective since 11 December 2007. 1.2 Authoritative roles 1.2.1 The Energy Regulatory Commission (ERC) has been appointed under the provisions of the Act, to regulate the electricity and natural gas industry operation under the state policy framework, with the Office of the Energy Regulatory Commission (OERC) serving as the secretariat to the ERC. ERC Responsibilities include the issuance of energy industry operation licenses; regulation of engineering and safety standards in the energy industry operation; regulation of tariffs; providing opinions on the power development plan, the investment plan of the electricity industry, the natural gas procurement plan and the energy network system expansion plan; protection of energy consumers; including the issuance of secondary legislation to regulate the energy industry operation to be in compliance with the provisions of the Act. 1.2.2 The Office of the Energy Regulatory Commission (OERC) is a state agency which is not considered a government agency or state-owned enterprise under the law on budgetary procedure. The OERC is a juristic person under the supervision of the ERC, with an OERC Secretary General, selected and appointed by the ERC, to be responsible for the OERC operations and to be the commanding officer of the officials and employees of the OERC. OERC Responsibilities include the administrative work of the ERC; receiving fees as prescribed by law or specified by the ERC; receiving complaints about energy industry operation; studying, compiling, analyzing and disseminating information about energy industry operation, competitive conditions, electricity demand forecast (load forecast) and other relevant information; preparing revenue and expenditure estimates of the OERC; and performing any other task as assigned by the ERC. Revenues of the OERC consist of (1) The revenue or benefits derived from the exercise of authority and duties as assigned to the ERC and the OERC under the Act; (2) A general subsidy allocated by the government; (3) Money or assets donated; and (4) Interest or any benefit incurred from the money or assets of the OERC.

the Energy Regulatory Commission & Office of the Energy Regulatory Commission 39 All revenues, except money or assets donated, after deducting the operating expense of the OERC and other appropriate costs, will be remitted to the Ministry of Finance as state revenue. In the event that the OERC revenue is inadequate for the operating costs, the government will allocate government budget to the OERC at an amount deemed necessary. OERC expenses - The OERC budget of expenses shall be presented by the ERC to the cabinet for approval. As for the management and administration of the budget, assets and inventories of the OERC, this shall be in accordance with the regulations set forth by the ERC. 1.2.3 The Power Development Fund is established in the OERC according to Section 93 of the Act with objectives to provide financial support for electricity service extension to various localities; to decentralize development to locality; to enhance development of local communities which have been affected by power plant operation; to promote the use of renewable energy and technology which renders minimal impact on the environment with due consideration of balance of natural resources and fairness to energy consumers. The Power Development Fund commenced operation in the 2011 fiscal year, as from 21 December 2010 onwards, in accordance with the Regulation of the Energy Regulatory Commission on Power Development Fund, B.E. 2553 (2010). Revenue of the Power Development Fund, in accordance with Section 94, consists of: (1) The contributions received from electricity industry licensees in accordance with the ERC regulations prescribed under the policy framework of the National Energy Policy Council (NEPC). The contributions remitted to the Fund for expense under Section 97(1) shall be deducted from tariffs. The OERC shall allocate 95 percent of the contributions received from electricity industry operators with electricity generation licenses for expenses under Section 97(3) and the remaining five (5) percent for expense under Section 97(6). (2) The fines collected from electricity industry licensees under Section 128 and Section 140 (administrative fines). (3) Money or assets donated. (4) Interest or any benefit incurred from money or assets of the Fund. The money and assets of the Power Development Fund are not required to be remitted to the Ministry of Finance as state revenue in accordance with the law on treasury reserves and the law on budgetary procedure. The OERC shall receive, disburse, keep and manage the money of the Fund separately from the budget of the OERC. In this connection, the receipt, disbursement, keeping and management of the money of the Fund shall be in conformity with the regulations set forth by the ERC (Section 95). The establishment of the criteria, procedures and conditions for sending contributions to the Fund shall include the requirement for distinct separation of accounts according to the activities specified under Section 97 (1) (2) (3) (4) and (5), taking into account the impact on electricity consumers who have to absorb the burden resulting from the obligation of the electricity industry licensees in sending contributions to the Fund (Section 96, Clause two). Expenses of the Power Development Fund, - The Fund shall be used in accordance with Section 97 for the following activities: (1) to compensate and subsidize electricity industry licensees who have provided services for underprivileged power consumers or to enhance extensive electrification or to support the policy on the development decentralization to provincial areas (Section 97(1));

40 Annual Report 2011 (2) to compensate power consumers who have to pay more expensive electricity rate because licensees who operate electricity industry generate electricity according to the electricity system operator’s order which is unfair and discriminatory; (Section 97(2)); (3) to develop or rehabilitate localities affected by the operation of a power plant (Section 97(3)); (4) to promote the use of renewable energy and technologies for electricity industry operation that have minimal impact on the environment (Section 97(4)); (5) to increase knowledge, awareness and participation of the public in power-related issues (Section 97(5)); and (6) to pay for administrative cost of the Fund (Section97(6)). The spending of the Fund under Section 97(1) (2) (3) (4) and (5) shall comply with the regulations imposed by the ERC under the NEPC policy framework, and the accounts shall be explicitly separated by activity.

1.3 Preparation of the consolidated financial statements The Office of the Energy Regulatory Commission has prepared the consolidated financial statements of the OERC and the Power Development Fund, starting from the year ended 30 September 2011 onwards (“The Power Development Fund” came into operation in the 2011 fiscal year, pursuant to the ERC Regulation on Power Development Fund B.E. 2553 (2010) which came into force on 21 December 2010), by presenting the information separately to ensure clarity.

2. Basis of financial statement preparation These financial statements have been prepared by illustrating details in the statement of financial position, statement of income, statement of changes in capital position, and statement of cash flows of the Office of the Energy Regulatory Commission and the Power Development Fund according to the Generally Accepted Accounting Principles (GAAP) and the Regulation of the Energy Regulatory Commission on Finance and Accounting of the Office of the Energy Regulatory Commission, B.E. 2551 (2008). In this connection, for the sake of clarity of the consolidated financial statements, the presentation of information is separated into that of the OERC and that of the Power Development Fund.

3. Summary of significant accounting policy 3.1 Revenue and expense recognition based on the accrual basis 3.1.1 The income from fees of the OERC is the income or benefits derived from the execution of the authority and duties of the ERC and the OERC according to the Energy Industry Act, B.E. 2550 (2007), comprising license fees for electricity and natural gas industry operation, annual fees electricity and natural gas industry operation, fees for electricity and natural gas industry operation license renewal. The income is recognized when the ERC has approved license issuance and when the annual fee payments are due. 3.1.2 The revenue recognition of the Power Development Fund is recognized as revenue from electricity industry operation licensees, calculated at the rate specified by the ERC. In the 2011 fiscal year, there are two types of licensees, namely:

the Energy Regulatory Commission & Office of the Energy Regulatory Commission 41 (1) Electricity industry operation licensees - Revenue from electricity distribution licensees pursuant to Section 94(1) to spend under Section 97(1) for revenue compensation among the Power Utilities in accordance with the ERC Order No.76/2554 dated 27 December 2011, by collecting contributions from the Electricity Generating Authority of Thailand (EGAT) and the Metropolitan Electricity Authority (MEA) and paying as revenue compensation to the Provincial Electricity Authority (PEA). - Revenue from the electricity distribution licensees pursuant to Section 94(1) to spend under Section 97(1) to subsidize underprivileged power consumers using electricity no more than 90 units, in accordance with the ERC Order on Sending Contributions to and Disbursement of Money from the Power Development Fund by State Agencies dated 26 August 2011, starting 1 July 2011, by charging to EGAT, MEA, PEA and the Sattahip Electric Welfare (SEW) and disbursing subsidies to pay back to the MEA, PEA and SEW. (2) Electricity Generation Licensees Pursuant to the ERC Proclamation on Sending Contributions to Power Development Fund for Electricity Industry Licensees with Electricity Generation Licenses, 95 percent of the incomes from such licensees is allocated for expense under Section 97(3) exclusively for activities of the Power Development Fund in the locality where the concerned power plant is located and the remaining five (5) percent for expense under Section 97(6), i.e. administrative cost of the Fund. In the 2011 fiscal year, there has been no spending because the steps and process of recruitment of the Community Development Committees (CDC) in areas surrounding the power plants are still underway. 3.1.3 Interest income recognition is based on a proportional time basis, taken into consideration the interest rates specified by the banks. 3.1.4 Revenue from donation, for equipment with value per unit lower than 20,000 baht, is recognized on the date of acquisition. 3.1.5 Revenue from donation, for equipment with value per unit from 20,000 baht upwards, is recognized as unrealized revenue from donation on the date of acquisition and as revenue from donation in proportion of depreciation calculated for each type of equipment. As for donated money, it is recognized based on the donors’ objectives, and the write-off as revenue from donation will be made at donation payment. 3.1.6 Utilities expenses shall be recorded as recognized expenses in the fiscal year in which billing is received. 3.1.7 Expenditure requiring a borrowing or cash advance authorized in the present fiscal year to be used in the following fiscal year shall be recognized as an expense of the fiscal year in which the borrowing is authorized, as follows: - Travel expense for not more than 60 days - Other operating expenses for not more than 15 days 3.2 Supplies The total value of supplies is recorded as supplies account on the date of purchase or acquisition and the supplies account will be adjusted as expense when the supplies are used as at the end of accounting period. The method used for supply cost valuation is First In, First Out (FIFO). 3.3 Property, plant and equipment (PPE) The PPE is presented based on the costs as at the purchasing date or the date of acquisition or at completion of construction. 3.3.1 Record is made only for equipment with value per unit, when acquired, from 20,000 baht up.

42 Annual Report 2011 3.3.2 Depreciation of the PPE is calculated by using a straight-line method (estimated useful life basis) pursuant to the ERC resolution at its Meetings No. 26/2552 (2009) (65th) on 29 September 2009, and No. 24/2554 (2011) (133rd) on 30 June 2011, as follows:

(1) Office equipment - Mobile phones Lifetime 3 years - Others Lifetime 8 years (2) Office appliances Lifetime 5 years (3) Vehicles and transportation Lifetime 5 years (4) Audio-visual aids Lifetime 5 years (5) Electronic devices Lifetime 5 years (6) Computers - Computers Lifetime 3 years (Delivered since Fiscal Year 2009) - Computers Lifetime 5 years (Delivered in Fiscal Year 2008) (7) Sports equipment Lifetime 2 years (8) Building improvements Lifetime 3 years (Calculation of useful life is based on office space leasing contract.) 3.4 Deferred state revenue to the Ministry of Finance All revenue, except the revenue of the Power Development Fund and donated money or assets, after deducting operating expenses and other appropriate costs, shall be remitted to the Ministry of Finance as state revenue within the following fiscal year. However, while pending delivery of the remittance, the money can be disbursed as advanced money for expenses in the following fiscal year. The Regulation of the Energy Regulatory Commission on State Revenue Delivery and Operating Expenses and Other Appropriate Costs of the Office of the Energy Regulatory Commission, B.E. 2551 (2008), has defined appropriate costs as follows: 3.4.1 Obligated liabilities prior to the end of fiscal year through, for example, ordering the purchase of assets, hire of work, hire of construction work, consultant engagement or asset renting, with purchasing orders, hiring orders, contracts or agreements already made, but the payment for which could not be settled by the fiscal year end. Such purchasing orders, hiring orders, contracts or agreements are considered supporting documents for requesting reserves for outstanding disbursement in following fiscal years until such obligations expire. 3.4.2 Expenses which have not become obligated liabilities but a budget is to be reserved for their payment after the fiscal year end and for which reserves for outstanding disbursement in following fiscal years have been requested. 3.4.3 Other necessary obligated expenses, as approved by the ERC.

the Energy Regulatory Commission & Office of the Energy Regulatory Commission 43 3.5 Reserves for outstanding disbursement in following fiscal years Reserves for outstanding disbursement in following fiscal years refer to items of appropriate costs which are obligated liabilities of the OERC before the end of fiscal year but the payment for which could not be settled by the fiscal year end, or expenses which have not become obligated liabilities but a budget is to be reserved for their payment after the fiscal year end, pursuant to the Notes to Financial Statements Items 3.4.1 – 3.4.3, for which the ERC will have to approve the reserve of a budget for disbursement in following fiscal years according to the expense plan presented by the Secretary General, at the latest, before the last business day of the fiscal year. The amount of the reserved budget for outstanding disbursement in following fiscal years must be within the budget for the annual expense estimate, already approved by the cabinet. The total amount of the above-mentioned reserves for outstanding disbursement in following fiscal years is included in accounting item “Surplus to accumulated expense.”

4. Cash and cash equivalents include Unit : Baht 2011 2010 Consolidated Separated Separated for Separated for OERC Power Development for OERC Fund

Cash on hand and petty cash 200,000.00 200,000.00 - 378,670.70 Cash at bank - Savings deposits 594,493,144.03 263,145,355.49 331,347,788.54 371,553,602.19 Cash at bank - Current deposit 46,564.15 - 46,564.15 - Cash at bank - 3-month fixed deposit 1,157,397,295.73 305,527,432.71 851,869,863.02 202,455,784.16 Total 1,752,137,003.91 568,872,788.20 1,183,264,215.71 574,388,057.05

For the savings deposits, the interest rate is floated according to the rates specified by the financial institutes. For the 3-month fixed deposit of the OERC, the interest rates received are 3.60 percent and 3.605 percent per year, maturing on 26, 29 and 30 December 2011. For the 3-month fixed deposit of the Power Development Fund, the rates are 3.05 - 3.10 percent per year, maturing on 4 October and 30 November 2011.

5. Account receivable includes Unit : Baht 2011 2010 Consolidated Separated Separated for Separated for OERC Power Development for OERC Fund

Account receivable – Income from fees 13,671,030.56 13,671,030.56 - 3,093,711.97 Account receivable – Income from Electricity Industry Licensees 394,687,283.13 - 394,687,283.13 - Total 408,358,313.69 13,671,030.56 394,687,283.13 3,093,711.97

44 Annual Report 2011 6. Account receivable - internal borrowings includes Unit : Baht 2011 2010 Consolidated Separated Separated for Separated for OERC Power Development for OERC Fund

Account receivable Official domestic travel expense 3,204,126.00 3,204,126.00 - 2,334,077.09 Official overseas travel expense 4,845,366.58 4,845,366.58 - 9,265,048.00 Training and seminar expense 4,365,223.00 4,365,223.00 - 1,773,283.28 Meeting expense 100,000.00 100,000.00 - 226,210.00 Office operating expense 571,320.00 571,320.00 - 624 ,720.83 Total 13,086,035.58 13,086,035.58 - 14,223,339.20

7. Accrued revenues includes Unit : Baht 2011 2010 Consolidated Separated Separated for Separated for OERC Power Development for OERC Fund

Accrued revenue under Section 97(1) for revenue compensation 694,893,140.87 - 694,893,140.87 - Accrued revenue under Section 97(1) for underprivileged power consumers 2,091,442,866.43 - 2,091,442,866.43 - Accrued revenue from electricity generation licensees for Section 97(3) 178,334,247.88 - 178,334,247.88 - Accrued revenue from electricity generation licensees for Section 97(6) 9,386,013.05 - 9,386,03105 - Accrued interest 9,858,863.95 643,238.43 9,215,625.52 177,500 Total 2 ,983,915,132.18 643,238.43 2,983,271,893.75 177,500

the Energy Regulatory Commission & Office of the Energy Regulatory Commission 45 8. Short-term investment includes Unit : Baht 2011 2010 Consolidated Separated Separated for Separated for OERC Power Development for OERC Fund

6-month fixed deposit 501,931,506.86 - 501,931,506.86 - Total 501,931,506.86 - 501,931,506.86 - The short-term investment is made via a 6-month fixed deposit with a financial institute, with an interest rate of 3.40 percent per year, maturing on 4 January 2012.

9. Supplies include Unit : Baht 2011 2010 Consolidated Separated Separated for Separated for OERC Power Development for OERC Fund

Office supplies 432,584.91 432,584.91 - 660,012.53 Computer supplies 264,655.00 264,655.00 - 338,030.00 Office appliances 65,975.00 65,975.00 - 24,400.66 Electronic devices 7,501.12 7,501.12 - 6,141.12 Audio-visual aids - - - 420,561.00 Total 770,716.03 770,716.03 - 1,449,145.31

10. Other current assets include Unit : Baht 2011 2010 Consolidated Separated Separated for Separated for OERC Power Development for OERC Fund

Guarantee for lease and service contracts 6,117,584.43 6,117,584.43 - 5,648,336.44 Valued added tax - Input tax 278.63 278.63 - 6,445.38 Valued added tax - Deferred input tax 805,288.28 805,288.28 - 955,500.74 VAT surplus payment 949,6 33.09 949,633.09 - 3,319,864.98 Total 7,872,784.43 7,872,784.43 - 9,970,147.54

46 Annual Report 2011 11. Property, Plant and Equipment (PPE) – Net – (Separated for the OERC) includes Unit : Baht Account Balance Change during Year Account Balance as at Increase Decrease as at 10 October 2010 30 September 2011 Historical Cost Leasehold improvement 17,164,043.57 20,304,415.02 - 37,468,458.59 Equipment - Computers 14,802,311.32 13,638,299.07 - 28,440,610.39 Office equipment 6,347,227.64 2,587,539.94 - 8,934,767.58 Equipment - Office appliances 1,080,621.72 73,500.00 - 1,154,121.72 Equipment - Audio-visual aids 6,312,588.89 5,981,366.28 - 12,293,955.17 Equipment - Vehicles 27,720,130.84 1,341,000.00 (1,359,000.00) 27,702,130.84 Equipment - Sports equipment - 807,200.00 - 807,200.00 Assets from donations 254,200.00 271,261.26 - 525,461.26 Suspense account: Equipment – Computers 2,780,000.00 2,780,000.00 (5,560,000.00) - Work in process 1,539,947.78 25,203,919.24 (26,743,867.02) - Total 78,001,071.76 72,988,500.81 (33,662,867.02) 117,326,705.55 Less Accumulated depreciation Leasehold improvement (4,592,021.57) (9,798,174.64) - (14,390,196.21) Equipment - Computers (3,950,369.35) (6,711,938.94) - (10,662,308.29) Office equipment (736,430.83) (1, 069,860.74) - (1,806,291.57) Equipment – Office appliances (160,439.42) (221,057.53) - (381,496.95) Equipment – Audio-visual aids (809,819.98) (1,467,834.17) - (2,277,654.15) Equipment - Vehicles (5,472,291.66) (5,599,894.81) 275,524.20 (10,796,662.27) Equipment - Sports equipment - (133,614.25) - (133,614.25) Assets from donations (96,779.31) (139 ,889.01) - (236 ,668.32) Total (15,818 ,152.12) (25 ,142,264.09) 275 ,524.20 (40,684 ,892.01) PPE-Net 62,1 82,9 1 9 .64 76,6 41,813.54

Depreciation For the Year Ended 30 September 2011 (25,142 ,264.09) For the Year Ended 30 September 2010 (13,111 ,952.06)

the Energy Regulatory Commission & Office of the Energy Regulatory Commission 47 12. Account Payable Unit : Baht 2011 2010 Consolidated Separated Separated for Separated for OERC Power Development for OERC Fund

Account Payable – State agencies 11,157,758.47 11,157,758.47 - 524,558.55 Account Payable – External entities 13,485,257.7 2 13,485,257.72 - 20,255,320.29 Total 24,643,016.19 24 ,643,016.19 - 20,779,878.84

13. Accrued expenses include Unit : Baht 2011 2010 Consolidated Separated Separated for Separated for OERC Power Development for OERC Fund

Subsidy expense 2,386,253,844.10 - 2,386,253,844.10 - Travel expense 8,049,492.58 8,049,492.58 - 11,599,125.09 Meeting expense 100,000.00 100,000.00 - 66,010.00 Training and seminar expense 4,250,223.00 4,250,223.00 - 1,773,283.28 Meeting allowance expense - - - 161,600.00 Supplies expense - - - 34,070.00 Utilities expense - - - 54,962.59 Other expenses 571,320.00 571,320.00 - 535,688.24 Total 2,399,224,879.68 12,971,035.58 2,386,253,844.10 14,224,739.20

48 Annual Report 2011 14. Deferred state revenue to the Ministry of Finance (Separated for the OERC) includes Unit : Baht 2011 2010

Beginning surplus to accumulated expense 559,962,026.19 450,966,882.95 Less Additional state revenue sent during the year (8,782,397.04) (16,539,705.12) 551,179,629.15 434,427,177.83 Operating revenues 671,036,166.82 596,880,107.40 Operating expense (596,932,746.42) (412,982,333.93) 625,283,049.55 618,324,951.30 Plus Accumulated depreciation of purchased equipment 40,448,223.69 15,721,372.81 665,731,273.24 634,046,324.11 Less Reserves for outstanding disbursement in following fiscal years (Note 23) (454,228,634.68) (486,517,234.39) Supplies at end of year (770,716.03) (1,449,145.31) Guarantee for lease and service contract* (6,117,584.43) (5,648,336.44) Valued added tax (VAT) - Input tax (278.63) (6,445.38) VAT - Deferred input tax (805,288.28) (995,500.74) VAT - Surplus payment (949,633.09) (3,319,864.98) Leasehold improvement (37,468,458.59) (17,164,043.57) Work in process - (4,319,947.78) Equipment purchase expense (79,332,785.70) (56,262,880.41) Deferred state revenue to the Ministry of Finance 86,057 ,893.81 58,362,925.11

* Guarantee for lease and service contract must be remitted as state revenue when the contract maturity date is due.

the Energy Regulatory Commission & Office of the Energy Regulatory Commission 49 15. Other current liabilities include Unit : Baht 2011 2010 Consolidated Separated Separated for Separated for OERC Power Development for OERC Fund

VAT – accrued output tax 894,366.49 894,366.49 - 202,392.36 Accrued vouchers 1,630,278.96 1,630,278.96 - 1,409,704.29 Accrued social insurance 290,700.00 290,700.00 - 220,238.00 Retention, contract guarantee and other guarantees 14,074,188.79 14,074,188.79 - 9,154,143.04 Deferred withholding tax (Por Ngor Dor 1) 1,053,896.08 1,053,896.08 - 749,679.32 Deferred withholding tax (Por Ngor Dor 3) 1,053,896.08 1,053,896.08 - 749,679.41 Deferred withholding tax (Por Ngor Dor 53) 169,425.44 169,425.44 - 259,648.79 Deferred revenue from donation (debt) 526,442.79 288,792.94 237,649.85 157,420.69 Transferred money awaiting checking 246,100.00 246,100.00 - - Other current liabilities 7,164.15 - 7,164.15 - Total 18,906,119.45 18,661,305.45 244,814.00 12,155,251.90

16. Income from fees/contributions include Unit : Baht 2011 2010 Consolidated Separated Separated for Separated for OERC Power Development for OERC Fund

Fees from electricity industry licenses 2,315,000.00 2,315,000.00 - 4,675,000.00 Fees from natural gas industry licenses 500,000.00 500,000.00 - - Fees from electricity industry operation 416,062,190.30 416,062,190.30 - 428,301,189.85 Fees from natural gas industry operation 198,181,855.21 198,181,855.21 - 158,880,052.30 Contributions from electricity distribution licensees under Section 97(1) for revenue compensation among Power Utilities 9,904,995,067.92 - 9,904,995,067.92 - Contributions from electricity distribution licensees under Section 97(1) for subsidizing underprivileged power consumers 3,153,872,738.79 - 3,153,872,738.79 - Contributions from electricity generation licensees for Section 97(3) 2,042,234,619.86 - 2,042,234,619.86 - Contributions from electricity generation licensees for Section 97(6) 79,4 25 ,5 47 .32 - 79,425,5 47 .32 - Total 15,842,587,091.40 662,059,045.51 15,180,527,973.89 591,856,242.15

50 Annual Report 2011 Contributions from electricity distribution licensees pursuant to Section 94(1) to spend under Section 97(1) for revenue compensation among the Power Utilities, as per the ERC Order No. 76/2554 dated 27 December 2011, was collected from the Electricity Generating Authority of Thailand (EGAT) and the Metropolitan Electricity Authority (MEA) in Fiscal Year 2011, starting from 1 January 2011 onwards, accounting for 9,904,995,067.92 baht, and revenue compensation was paid to the Provincial Electricity Authority at a total amount of 9,706,956,506.00 baht. Contributions from electricity distribution licensees pursuant to Section 94(1) to spend under Section 97(1) to subsidize underprivileged power consumers using electricity no more than 90 units, as per the ERC Order on Sending Contributions to and Disbursement of Money from the Power Development Fund by State Agencies dated 26 August 2011, was collected from EGAT, the MEA, the PEA and the Sattahip Electric Welfare (SEW) in Fiscal Year 2011, starting 1 July 2011 onwards, accounting for a total amount of 3,153,872,738.79 baht, and disbursement for subsidization was paid back to the MEA, PEA and SEW at a total amount of 2,810,420,315.50 baht. As for the contributions from electricity generation licensees pursuant to Section 94(1) to spend under Section 97(3), the amount obtained includes the remaining 533,149,209.95 baht under the former Community Development Fund in areas surrounding the power plants, transferred from EGAT on 16 March 2011 in accordance with the resolution of the National Energy Policy Council at its Meeting No. 2/2553 (2010) (131st) on 28 June 2010. In the 2011 fiscal year, starting1 January 2011 onwards, the money received from licensees amounted to 1,588,510,957.23 baht, consisting of contributions from electricity generation licensees to spend under Section 97(3) at 95 percent, or 1,509,085,409.91 baht, and to spend under Section 97(6) at 5 percent, or 79,425,547.32 baht. However, in the 2011 fiscal year, there has been no spending because the steps and process of recruitment of the Community Development Committees (CDC) in areas surrounding the power plants are still underway. In this connection, the money to be spent under Section 97(3) will be used exclusively for activities of Power Development Funds in individual designated areas where the power plants are located.

17. Other incomes include Unit : Baht 2011 2010 Consolidated Separated Separated for Separated for OERC Power Development for OERC Fund

Interest income from financial institutes 21,383,642.48 7,878,698.68 13,504,943.80 4,409,368.80 Income from donation 158,389.01 158,389.01 - 84,745.70 Other incomes 383,138.01 382,938.85 199.16 65,537.48 Income from returned budget in previous year (return from internal borrowings) 557,094.77 557,094.77 - 464 ,213.27 Total 22,482,264.27 8,977,121.31 13,505,142.96 5,023,865.25

the Energy Regulatory Commission & Office of the Energy Regulatory Commission 51 18. Expense on human resources includes Unit : Baht 2011 2010 Consolidated Separated Separated for Separated for OERC Power Development for OERC Fund

Salary and wage 93,503,1750.28 93,503,175.28 - 65,921,877.47 Board compensation and other benefits 21,750,000.00 21,750,000.00 - 21,750,000.00 Overtime compensation 1,659,163.21 1,659,163.21 - 1,788,380.93 Special compensation 11,717,494.71 11,717,494.71 - 3,774,042.00 Severance pay and termination pay 2,174,883.66 2,174,883.66 - 25,855.20 Medical treatment expense 46,505.82 46,505.82 - 22,878.00 Other human resource expenses 1,834,629.82 1,834,629.82 - - Welfare expense 4,740,065.35 4,740,065.35 - - Total 137,425,917.85 137,425,917.85 - 93,283,033.60

19. Expenses on operations include Unit : Baht 2011 2010 Consolidated Separated Separated for Separated for OERC Power Development for OERC Fund

Meeting allowance 5,632,050.00 5,632,050.00 - 4,607,950.00 Other compensation 1,953,500.00 1,953,500.00 - 1,512,950.00 Official domestic travel 22,354,989.33 22,354,989.33 - 8,636,125.11 Official overseas travel 26,149,540.67 26,149,540.67 - 23,991,632.23 Meetings and training/seminars 19,461,271.06 19,461,271.06 - 15,667,879.13 Office lease and services 30,602,105.91 30,602,105.91 - 26,698,335.22 Office equipment rent 3,871,663.24 3,871,663.24 - 1,994,398.93 Contribution to social insurance and Provident Fund 6,168,372.81 6,168,372.81 - 4,245,151.51 Health insurance, accidental insurance and life insurance 3,328,368.16 3,328,368.16 - 4,625,934.72 Contracted services 66,283,157.51 66,283,157.51 - 33,348,831.23 Engagement of consultants and experts 216,111,616.34 216,111,616.34 - 162,674,452.03 Miscellaneous expense 5,060,754.95 5,060,724.95 - 1,613,747.29 Supplies expense 6,762,387.21 6,762,387.21 - 3,384,884.04 Equipment with value lower than specified standard 6,168,433.94 6,168,433.94 - 3,605,100.58 Utilities expense 5,342,907.55 5,342,907.55 - 3,045,975.85 Total 425,251,088.68 425,251,088.68 - 299,653,348.27

52 Annual Report 2011 20. Depreciation and amortization include Unit : Baht 2011 2010 Consolidated Separated Separated for Separated for OERC Power Development for OERC Fund

Leasehold improvement 9,798,174.64 9,798,174.64 - 3,298,097.99 Equipment - Computers 6,711,938.94 6,711,938.94 - 3,473,415.09 Equipment - Vehicles and transportation 5,599,894.81 5,599,894.81 - 4,719,274.80 Equipment - Office equipment 1,069,860.74 1,069,860.74 - 657,601.80 Equipment - Office appliances 221,057.53 221,057.53 - 118,356.86 Equipment - Audio-visual aids 1,467,834.17 1,467,834.17 - 760,459.82 Equipment - Sports equipment 133,614.25 133,614.25 - - Assets from donation 139,889.01 139,889.01 - 84,745.70 Total 25,142,264.09 25,142,264.09 - 13,111,952 .06

21. Cost subsidies include Unit : Baht 2011 2010 Consolidated Separated Separated for Separated for OERC Power Development for OERC Fund

Cost subsidies 8,980,000.00 8,980,000.00 - 6,934,000.00 Cost subsidies for revenue compensation among the Power Utilities 9,706,956,560.00 - 9,706,956,560.00 - Cost subsidies for underprivileged power consumers -2,810,420,315.50 - 2,810,420,315.50 - Total 12,526,356,875.50 8,980,000.00 12,517,376,875.50 6,934,000.00

the Energy Regulatory Commission & Office of the Energy Regulatory Commission 53 22. Other expenses include Unit : Baht 2011 2010 Consolidated Separated Separated for Separated for OERC Power Development for OERC Fund

Loss from vehicle amortization Equipment - Vehicle and transportation (cost price) 1,359,000.00 1,359,000.00 - - Less Accumulated depreciation (275,524.20) (275,524.20) - - Balance 1,083,475.80 1,083,475.80 - - Less Accidental Indemnity (950,000.00) (950,000.00) - - Loss from asset amortization 133,475.80 133,475.80 - -

23. Reserves for Outstanding Disbursement in Following Fiscal Years (exclusively for OERC) include Unit : Baht 2011 2010 Beginning Reserves for Outstanding Disbursement in Following Fiscal Years 486,517,234.39 428,784,498.73 Less Disbursement during the year (325,110,236.19) (255,065,280.87) Obligated liabilities (153,128,642.76) (142,866,611.62) Non-obligated liabilities (171,981,593.43) (112,198,669.25) Additional delivery as at 30 September (9,512,791.14) (16,959,705.12) Additional delivery during the year (8,402,657.47) (16,539,705.12) Deferred additional delivery (1,110,133.67) (420,000.00) Balance of reserves for outstanding disbursement from previous year 151,894,207.06 156,759,512.74 Plus Present year reserves for outstanding disbursement in following fiscal years 302,334,427.62 329,757,721.65 Obligated liabilities 158,652,182.62 151,052,621.65 Non-obligated liabilities 143,682,245.00 178,705,100.00 Ending reserves for Outstanding Disbursement in Following Fiscal Years at 30 September 454,228,634.68 486,517,234.39

The amount of reserves for outstanding disbursement is included in “cash and cash equivalents” and “surplus to accumulated expense” items. According to the Minutes of the Meeting No. 36/2011 (145th) on 28 September 2011, the ERC approved the reserves in Fiscal Year 2011 at a total amount of 302,334,427.62 baht, consisting of non-obligated liabilities at the amount of 143,682,245.00 baht and obligated liabilities at 158,652,182.62 baht.

54 Annual Report 2011 As for the balance of reserves for outstanding disbursement from previous years, accounting for 151,894,207.06 baht, this comprises the reserve for outstanding disbursement in the year 2009, for obligated liabilities, at the amount of 30,524,000.00 baht, and that in the year 2010 at the amount of 121,370,207.06 baht, divided into obligated liabilities at 114,470,207.06 baht and non-obligated liabilities at 6,900,000.00 baht. In this connection, the ERC has approved further reserve for non-obligated liabilities at the same deliberation. According to the Minutes of the Meeting No.26/2010 (100th) on 28 September 2010, the ERC approved the reserves in Fiscal Year 2010 at a total amount of 329,757,721.65 baht, consisting of non-obligated liabilities at the amount of 178,705,100.00 baht and obligated liabilities at 151,052,621.65 baht, the details of which can be shown as follows:

Unit : Baht 2011 2010 Obligated Liabilities Office management and administrative expense 19,894,434.73 25,814,115.15 Capital budget expense 2,795,910.00 8,150,094.90 Other expenses 135,961,837.89 117,088,411.60 Total Obligated Liabilities 158,652 ,182.62 151,052,621.65 Non-obligated Liabilities Human resources expense 15,300,000.00 11,340,300.00 Office management and administrative expense 13,593,800.00 20,252,800.00 Capital budget expense - 19,562,000.00 Other expenses 114,788 ,445.00 178,705,100.00 Total Non-obligated Liabilities 143,682 ,245.00 178,705,100.00 Total 302,334,427.62 329,757,721.65

Details of the reserves for outstanding disbursement in following fiscal years as at 30 September 2011 and 2010, by fiscal year in which the reserves were made, are as follows:

Unit : Baht 2011 2010 Reserves for outstanding disbursement in FY 2008 - 214,000.00 Reserves for outstanding disbursement in FY 2009 30,524,000.00 156,545,512.74 Reserves for outstanding disbursement in FY 2010 121,370,207.06 329,757,721.65 Reserves for outstanding disbursement in FY 2011 302,334,427.62 - 454,228,634.68 486,517,234.39

the Energy Regulatory Commission & Office of the Energy Regulatory Commission 55 24. Staff Provident Fund The OERC has established the Staff Provident Fund for all OERC permanent staff members, pursuant to the provision of the Provident Fund Act, B.E. 2530 (1987). Staff members and the OERC contribute to the Fund under this scheme at a rate of 5-10 percent of individual staff salaries. The staff members will be beneficiaries of contributions made to the Fund by the OERC pursuant to the regulation and rules of the Fund and subject to the length of service of each staff member. The OERC has appointed a fund manager to manage the Fund, as required by the Provident Fund Act (1987). The OERC’s contributions to the Provident Fund for the year ended 30 September 2011 amounted to 4,565,920.81 baht.

25. Circumstance after the reporting period On 27 December 2011, the Order of the Energy Regulatory Commission No.76/2554 (2011) on Sending Contributions to and Disbursement of Money from the Power Development Fund under Section 97(1) for Revenue Compensation among the Power Utilities for the Year 2011 was issued, resulting in the change in contribution rates to the Power Development Fund under Section 97(1), with retroactive effect as from the electricity billing in January 2011 onwards. In these financial statements, the revenues and subsidies have already been adjusted to comply with the mentioned order.

26. Approval of financial statements These financial statements were approved by the Secretary General of the Office of the Energy Regulatory Commission on 8 May 2012.

......

56 Annual Report 2011

Action Plan for Fiscal Year 2012

In preparing the 1. Proactive Energy Industry Action Plan for Fiscal Year Regulation 2012, the ERC together with the OERC has set The ERC has underscored proactive energy the conceptual framework industry regulation by developing the monitoring to be in line with (1) the and inspecting systems of energy industry energy policy that the operations, as well as analyzing and improving Prime Minister (Ms. Yingluck Shinawatra) had energy industry regulation to be more efficient. delivered to the Parliament of Thailand on 23 August Also to be included is the analysis of regulatory 2011, which recognized the importance of promoting impact so that the issuance of regulations and the energy industry to be able to generate income regulatory criteria would be made with prudence for the country, by making Thailand a regional and would lead to practical adaptation of the energy center for the energy business, reinforcing energy industry in the right direction. This will support the security, regulating energy prices to be reasonable government energy policy, including the national and fair, promoting the generation, consumption security policy, which emphasizes energy security and development of renewable and alternative readiness of the country. energy, and comprehensively promoting energy conservation, and (2) the implementation framework Ì Up-to-standard, transparent and in accordance with the Strategic Plan for Energy auditable energy industry regulation Industry Regulation, No. 1 (2008-2012) that was In the 2012 fiscal year, consideration of approved by the Cabinet on 2 December 2008, so energy industry licensing will be fully streamlined as to achieve the “Development of Principles and via the electronic system, or e-Licensing, to Guidelines on Energy Industry Regulation to be facilitate and increase efficiency of the licensing up to international standards and more modern.” as well as the submission of reports on energy With a view to building confidence and recognition of industry performance, by reducing steps in filing an stakeholders in the energy sector, such as energy application together with attached documents and consumers, entrepreneurs (the licensees) and reducing redundancy or discrepancies in recording policy-makers, the ERC together with the OERC has the details. In addition, improvement will be made developed the Action Plan, based on the Strategic jointly with concerned agencies on the licensing Plan, by dividing the tasks into three major aspects process for the power generation facility operation as follows: under Section 48 of the Energy Industry Act to 1. Proactive Energy Industry Regulation enhance effectiveness of energy industry regulation 2. Promotion of Energy Consumers’ and the development of energy industry, including participation in Energy Industry Regulation speeding up the issuance of the regulation on the Development code of practice for environmental management 3. Organizational Development for the facilities with a generation capacity below 10 MW to regulate the environmental management standards so that power plants can co-exist with the community in a sustainable manner, and preparing recommendations on the guidelines on energy service quality improvement. 58 Annual Report 2011 Expected results : • The licensing system is transparent, fast and efficient. • The licensing is up to standard and auditable. • Energy industry operators provide services that meet standards, both service quality standards and engineering & safety standards. • Complaints resulting from the energy industry operation can be prevented.

Ì Regulation of energy industry to enhance its efficiency The ERC will analyze the reports on the improve the operational efficiency of power plants, operation of energy industry facilities and random in terms of both safety and operational standards, check the facilities, in terms of the engineering including the capacity of energy industry operation and safety standards, environment and impact on facilities, to be comparable to the international the community as well as the performance and standards. Moreover, the energy network systems efficiency of the facilities, according to the manual and the electricity system operator will be regulated for monitoring and inspecting energy industry in order that electricity dispatch would be more operation facilities. Also, the codes of practice for efficient and fair. power plant operation will be reviewed in order to

Expected results : • Efficiency will be increased in the operation of electricity and natural gas generation, transmission system, and distribution system businesses. • An integrated system for quality monitoring, assessment and improvement will be established. • The quality of electricity services will be improved based on the outcome of the survey on satisfaction towards service provision so that the service provision would be up to standard and would be of better quality.

Ì Regulation of energy tariff for fairness to stakeholders The ERC will regulate the electricity tariff to including the analysis of investment plans, relevant be in compliance with the electricity tariff structure expenditure costs and an appropriate rate of for the period 2011- 2015, which was approved on return, with due consideration on the operators’ 13 July 2011, and will undertake a thorough review efficiency improvement, to develop a simulation of the cost of electricity service provision from of the electricity tariff structure of Thailand for July 2011 to July 2013, to configure the electricity the period 2013-2015, that will lead to the energy tariff that better reflects the genuine cost, to be tariff determination that is reasonable and fair. In applied in the period 2013-2015. In this regard, addition, a study will be conducted on the guidelines an analysis study will be undertaken on power for introducing Third Party Access to the energy consumption behavior, the criteria for cost allocation network systems, including the tariff for energy in each type of electricity industry businesses, network system utilization (Wheeling Charges).

the Energy Regulatory Commission & Office of the Energy Regulatory Commission 59 Expected result : • Tariff regulation will be suitable and fair, taking into consideration the efficiency improvement of the energy industry operation.

Ì Regulation to ensure energy security In the 2012 fiscal year, the ERC will to the society (Universal Service Obligations: conduct the following: (1) regulating the electricity USO), conducting surveys on underprivileged procurement pursuant to the PDP 2010, including electricity consumers’ access to electricity service any revised PDP in the future, by focusing on the to support the state policy on provision of extensive outcome of the study on the criteria and privileges energy services; and (3) organizing the technical in return for offering a location for large power seminar, or Regulator Forum, No. 3/2012, to create plant development, the study on the guidelines for technical cooperation to enhance sustainability of use of power plants of which PPAs have expired, energy security; and (4) establishing the standard and the promotion of electricity generation from for data interconnection of Smart Grid devices renewable energy in accordance with the state so that the operation of the three Power Utilities policy, to reduce opposition to power project would be carried out along the same line, as well development; (2) establishing the criteria and as establishing the regulatory guidelines for Smart processes for regulating energy service provision Grid development in Thailand.

Expected results : • The criteria and processes for regulating the USO will be established. • The security and reliability of the power system will be strengthened, and energy supply will meet the demand of the country. • Monopoly of the operators’ service provision will be prevented so that the use of energy infrastructure could be optimized and the investment opportunity would be open, with a cost-effective return in both financial and economic terms. • The use of immovable property for energy network system construction will be managed to maximize the benefit to energy provision to regional areas, while ensuring fairness for the property owners.

Ì Regulation to ensure fairness The ERC will conduct public relations RECC Strategic Plan in order to establish guidelines campaigns on the channels for lodging complaints and concrete cooperation procedures among the about unfair collection of service fee or difficulties RECCs, OERC Regional Offices and the ERC; caused by the energy industry operation, through RECC capacity building, on a continuous basis; both the central and regional media. Support will organization of seminars to improve the complaint also be given to enhance duty execution of the handling process; and the set-up of an information OERC Regional Offices’ staff and the RECCs so center on energy industry-related laws to manage that they could effectively handle the complaints, the knowledge database on laws related to the using the same standards in all 13 regions; this energy industry and to be able to keep track of the includes support for the operation pursuant to the status of complaints. 60 Annual Report 2011 Expected result : • Energy consumers and persons affected by the energy industry operation will be treated with fairness.

2. Promotion of Energy Consumers’ Participation in Energy Industry Regulation Development In the 2012 fiscal year, the ERC will of community participation in the preparation of emphasize the decentralization of management and local development plans as well as the follow-up administrative powers to the regions, expansion of and evaluation of the use of money from the Power the rights protection networks of stakeholders in Development Fund to be in line with the objectives the energy industry operation, and the promotion specified in the Energy Industry Act.

Ì Creating mechanisms encouraging participation of various sectors The ERC, via the OERC, will continue the energy industry regulation and operation. scaling up the establishment of the rights protection Also to be conducted is a survey on satisfaction networks of stakeholders in the energy industry towards the energy industry regulation in various operation in three more regions in continuation of aspects, such as the organizational image and the the 2011 fiscal year implementation, including the efficiency of energy industry regulation; the survey development of the network database systems, outcomes will be used for improving the issuance to be a key mechanism to create participation of of regulations, announcements and requirements various sectors in the protection of stakeholders and related to the energy industry regulation. to serve as a channel to reflect satisfaction towards

Expected results : • Stakeholders in all sectors are involved in the management and inspection of energy industry operation and in the development of energy industry regulation. • The society has knowledge and understanding about energy and energy industry regulation, and hence will be ready to support the work of the ERC. • The energy industry regulation will be up to international standards.

Ì Determination of the role the Power Development Fund (the Fund) In the 2012 fiscal year, the OERC will altogether will be publicized so that the general screen the local development or rehabilitation public and stakeholders would be informed; this projects under Section 97 (3) as well as follow is to encourage community participation in the up and evaluate the results of the project preparation of local development plans, which will implementation, including preparing guidelines on lead to the acceptance of the Fund operation carried the use of the Fund under Section 97 (4), (5) of out by the ERC and the Community Development the Energy Industry Act, so that the use of money Committees (CDCs) in areas surrounding the would be effective and meet the objectives of the power plants. Fund. The Fund implementation in 57 provinces the Energy Regulatory Commission & Office of the Energy Regulatory Commission 61 Expected results : • Money expenditure is effective and meets the Fund objectives. • The community is encouraged to participate in the preparation of local development plans, which will lead to the acceptance of the Fund operation carried out by the ERC and the Community Development Committees (CDCs) in areas surrounding the power plants.

3. Organizational Development Importance will be given to the OERC of energy industry regulation, including institutional management system development to enhance its development to be a learning organization, to efficiency, transparency and auditability, and to support the ERC in carrying out the task of energy capacity building of human resources in the field industry regulation.

Ì Organizational development to meet the PMQA criteria The ERC, via the OERC, will continuously engineering, legal, and social, community & carried out its activities based on the PMQA criteria cultural dimensions which are crucial to the energy by integrating the institutional management to industry regulation; personnel development; control be systematic, with regard to strategic planning; and improvement of duty execution processes; survey on satisfaction towards the energy as well as risk management and internal audit, industry regulation; knowledge management aiming at increasing the operational efficiency, within the organization, involving both information with transparency and accountability, so that the technology and knowledge needed for energy organization could render qualified products and industry regulation in terms of energy economics, services to consumers and stakeholders.

Expected result : • The organization will be developed pursuant to the PMQA criteria, to raise the operational quality standards to meet the international standards.

Ì Knowledge management on the Energy Industry Regulation The ERC will encourage the application of through the electronic media (e-Learning) to the IT system (KM Portal) to support interoperability reinforce knowledge of the staff members and the within the OERC, and with the Regional Offices, general public, targeting at the enrolment of about and will disseminate teaching materials on energy 10,000 students in the 2012 fiscal year.

Expected result : • OERC personnel are equipped with knowledge on the energy industry regulation, in the context of both energy economics and engineering techniques that are essential to carrying out energy industry regulation.

62 Annual Report 2011

Abbreviation

ERC Energy Regulatory Commission NEPC National Energy Policy Council MEA Metropolitan Electricity Authority EGAT Electricity Generating Authority of Thailand PEA Provincial Electricity Authority RECC Regional Energy Consumer Committee CDC Community Development Committee TDC Tambon Development Committee The Managing Committee Managing Committee on Power Generation from Renewable Energy Promotion The Act The Energy Industry Act of B.E. 2550 (A.D. 2007) PTT PTT Plc. EPPO Energy Policy and Planning Office The Office/OERC Office of the Energy Regulatory Commission

Ft Automatic Power Tariff Adjustment Mechanism EIA Report Environmental Impact Assessment Report IEE Report Initial Environmental Examination Report ONEP Office of Natural Resources and Environmental Policy and Planning Adder Additional energy purchasing price COD Commercial Operation Date IPP Independent Power Producer or Large-scale Power Producer PDP 2010 Thailand Power Development Plan for 2010–2030 ROIC Return on Invested Capital SCOD Scheduled Commercial Operation Date SPP Small Power Producer VSPP Very Small Power Producer WACC Weighted Average Cost of Capital

64 Annual Report 2011 Appendix 1 Summary of the Energy Regulatory Commission Meetings in Fiscal Year 2011

Number of Meeting Attendance of the ERC in Fiscal Year 2011 1. The 1st Set of ERC, with duty execution in FY 2011 from 1 October 2010 - 3 July 2011 No. of Meeting Attendance/ Name - Surname Position Total No. of Meetings Professor Emeritus Dr. Direk Lavansiri Chairman of the ERC 32/33 Mr. Nopadon Mantajit Commissioner 30/33 Mr. Chalit Ruengvisesh Commissioner 27/33 Dr. Pallapa Ruangrong Commissioner 31/33 Mr. Chongchet Boonkerd Commissioner 32/33 Lt. Thaksin Limsuvan Commissioner 25/33 Dr. Supichai Tangjaitrong Commissioner 29/33

2. The 2nd Set of ERC, with duty execution in FY 2011 from 4 July - 30 September 2011 No. of Meeting Attendance/ Name - Surname Position Total No. of Meetings Professor Emeritus Dr. Direk Lavansiri Chairman of the ERC 11/12 Mr. Nopadon Mantajit Commissioner 12/12 Dr. Pallapa Ruangrong Commissioner 10/12 Lt. Thaksin Limsuvan Commissioner 11/12 Mr. Boonsong Kerdklang Commissioner 11/12 Mr. Pisit Soontarerat Commissioner 11/12 Mr. Sun Vithespongse Commissioner 11/12

Remarks : 1. Three Commissioners (Mr. Chalit Ruengvisesh, Mr. Chongchet Boonkerd and Mr. Supichai Tangjaitrong) retired from office according to Section 17, Clause Two, of the Energy Industry Act, and their replacements (Mr. Boonsong Kerdklang, Mr. Pisit Soontarerat and Mr. Sun Vithespongse) have been graciously appointed by HM the King as from 4 July 2011 onwards. 2. In Fiscal Year 2011, there were altogether 45 ERC Meetings -- 33 meetings during the office of the 1st Set of ERC and 12 meetings during that of the 2nd Set of ERC.

the Energy Regulatory Commission & Office of the Energy Regulatory Commission 65 Summary of the Minutes of ERC Meetings in Fiscal Year 2011 In Fiscal Year 2011, the Energy Regulatory Commission (ERC) convened meetings to consider matters and carry out its tasks as defined in the Energy Industry Act (the Act), which can be summarized as follows:

st Meeting No. 27/2010 (101 ) project, according to Section 26 of the Act, by publicizing 7 October 2010 the project information via the OERC website for at least 7 days. 1. Give consent to the opinions on various projects 2. Approve the methodology for establishing the as provided by the Sub-committee Regulating Energy criteria for determining tariffs for storage and transformation Network Systems and Energy Network System Operator at of natural gas from liquid to gas, consisting of the the latter’s meeting No. 5/2010 (11th) on 10 September 2010, assumptions for calculation, the calculation formula structure for submission to the Minister of Energy for consideration and the calculation method. and further presentation to the cabinet, pursuant to Section 3. Approve the criteria for allocating the remaining 11 (5) of the Act, of which the details are as follows: corporate expenditure budget of the Corporate Administration 1.1 Provide support for EGAT’s project on Group and the Development Group to the Generation Group renovation and expansion of aged transmission systems, and the Transmission System Group of EGAT in the year Phase 1: high-voltage substations because the project will 2009, based on the Cost Driver basis, by allocating the increase the capacity of aged high-voltage substations to remaining corporate expenditure budget of the Corporate be able to continuously and efficiently supply electricity and Administration Group and the Development Group to the to increase the reliability and security of the power system. Generation Group from formerly 64.45 percent to 65.39 However, in improving the high-voltage substations, the percent, and to the Transmission System Group from installation of control equipment, monitoring equipment formerly 35.55 percent of 34.61 percent. and meters should be considered to accommodate future 4. Approve the energy industry license issuance technologies. In this regard, the project implementation will and other matters related to permission granting, which not require a hearing pursuant to Section 26 of the Act as can be summarized as follows: the implementation would be undertaken within the areas of 4.1 Four power generation facility operation existing high-voltage substations, and no new construction licenses, with a total engine power of 203,628.160 will be made outside such areas, but EGAT will need to set horsepower (HP); seven electricity generation licenses, with up preventive measures against the impact caused by the a total installed capacity of 157.262 MW; seven regulated construction and to periodically report on the project plan energy production licenses (new application), with a total and progress to the ERC after EGAT gets approval from generator rating of 154,797.00 kilovolt-ampere (kVA); two the cabinet to carry out the project. electricity distribution system licenses; and two electricity 1.2 Provide support for the PEA’s construction retail licenses. of 115-kV transmission system with submarine cables, 3rd 4.2 Approve the reduction of installed generation circuit, to Samui Island in Suratthani Province, because capacity of Siam Power Generation Public Company Limited the project will enhance continuous and efficient power from the previously approved capacity of 450.75 MW to supply as well as increase the reliability and security of 169.55 MW. the power system. In this connection, the PEA has to take 4.3 Approve the issuance of a natural gas various measures as specified in the Initial Environmental storage and transformation of liquid to gas license to PTT Examination (IEE) report, and has to strictly take action LNG Co., Ltd. In this regard, the OERC is assigned to collect according to the suggestions/recommendations received from the company the annual energy industry operation fee, from the public hearing on the project, as well as to starting from June 2011 onwards, as the company has been periodically report on the project plan and progress to the commercially operated since then. ERC. In addition, the PEA will have to prepare the diagram 4.4 The ERC has considered PTT’s joint venture showing detailed characteristics of the direction and right- in the electricity industry with B. Grimm BIP Power Ltd. of-way boundaries for laying the energy network system and with Bangpa-in Cogeneration Co., Ltd., and views that for submission to the ERC for approval under Section 106 such an act is not the merger that will lead to monopoly, of the Act, after approval is granted by the cabinet to carry lessening or restriction of competition in energy service out the project and the route or location of the energy provision. Consequently, the ERC will not object to PTT’s network system is selected. In this regard, the OERC is joint ventures with the two companies. In this regard, assigned to arrange a hearing of public opinions on the additional licensing conditions will be specified, requiring that

66 Annual Report 2011 PTT equally treat other electricity industry operators, without bear the burden resulting from the exemption of minimum causing monopoly, lessening or restriction of competition electricity tariff charge; (3) estimated impact on the PEA in energy service provision and connection to energy and MEA caused by the policy implementation; and (4) the network systems of PTT. Moreover, PTT will be required management of the grants for affected business facilities. to submit to the OERC the information demonstrating that 7. Acknowledge the problems of and impact on no discriminatory practice is taken against other operators power producers resulting from the measure promoting applying for the use of natural gas in nearby areas, and power generation from renewable energy, especially that no monopolistic behavior, lessening or restriction of solar power, pursuant to the NEPC resolution, including competition in the provision of energy services occur, for the comments of the Renewable Energy Industry Club of OERC consideration and further investigation. the Federation of Thai Industries, which will be notified to In addition, the OERC is tasked to review the EPPO, being the Secretariat to the NEPC, to take relevant ERC Regulation on Establishment of Criteria to Prevent action. Approval is also given to the Distribution Utilities Merger, Competition Lessening or Restriction in Energy to review and amend the regulation for the purchase of Service B.E. 2552 (2009) to cover the case of both licensees power from VSPPs and the draft model of Power Purchase and energy industry operators applying for a license and Agreement (PPA) currently in use, to be appropriate and will be considered licensees too. correspond with the changing legal context in accordance 4.5 Acknowledge the delegation of responsibility with the ERC guidance given to EGAT when amending for the measures set out in the EIA report of the project the regulation for the purchase of power from SPPs on production capacity expansion of the pulp mill of the (2007) and with the cabinet resolution of 28 July 2009 on Advance Agro Public Company Limited (Pulp Mill 2). In this Contract Execution between Government Agencies and the regard, the Expert Review Committee on environmental Private Sector, and it is agreed to have a sub-committee impacts of industrial activities and supporting utilities, at appointed to consider, screen and analyze problems arising its meeting No. 17/2010 on 14 July 2010, has passed a from the implementation in compliance with the power resolution approving the delegation of responsibility for the purchase regulations and the PPAs of SPPs and VSPPs, measures set out in the EIA report of the mentioned project, for presentation to the ERC for further consideration. i.e. the National Power Plant 11 Co., Ltd. (NPP 11) will be 8. Acknowledge the revision to EGAT’s 2007 responsible for the measures related to the power plant, and Regulation for the Purchase of Power from SPPs, Using the Double A (1991) Public Company Limited (Pulp Mill 2) Cogeneration System (2010 Revision). will be responsible for those related to the pulp production 9. Approve the appointment of the Audit Committee, mill. In this connection, the OERC will use the measures effective as from 7 October 2010 for a period of one specified in the EIA report as the conditions in granting an year, comprising: (1) Mr. Chongchet Boonkerd, as electricity generation license to NPP 11. Chairman; (2) Mr. Chalit Ruengvisesh, as Member; (3) 5. Acknowledge the inspection of a fire incident at Mrs. Pallapa Ruangrong, as Member; (4) Mr. Samart the Tha Tako substation in Nakhon Sawan Province and Buranawattanachoke, as Member; and (5) Mrs. Kunphas require that EGAT, being the electricity transmission system Vajanarat, as Secretary. licensee, submit a report to the ERC, without delay, on the nd details of the incident, emergency measures taken and the Meeting No. 28/2010 (102 ) impact of the incident. 14 October 2010 6. Acknowledge the cabinet resolution on 14 September 2010 about the result of the Council of Economic 1. Approve the energy industry license issuance Ministers’ Meeting No. 10/2010 on tourism rehabilitation and other matters related to permission granting, which measures and assistance to tourism industry operators can summarized as follows: affected by domestic political crisis (request for cancellation 1.1 Approve the license granting to existing of minimum electricity tariff charge) and assign the OERC energy industry operators prior to the enforcement of the to liaise with the MEA and PEA to consider the impact and Energy Industry Act, as follows: one electricity generation determine details of the consideration framework as well as license, with a total installed capacity of 143.00 MW; one the implementation guidelines for further submission to the electricity distribution system license; one electricity retail ERC for consideration, as follows: (1) the determination of license. scope and clear definitions of business facilities affected by 1.2 Approve the expansion of installed generation the domestic political crisis that have been exempted from capacity of Kawna Power Supply Co., Ltd., from the the payment of minimum electricity tariff charge, pursuant to previously approved capacity of 9.90 MW to 17.90 MW. the government policy; (2) the number of affected business 2. Approve the diagram showing detailed facilities, in both regional and metropolitan areas, and characteristics of the direction and right-of-way boundary the financial amount that the PEA and MEA may have to for laying the 115-kV Phichit - Phetchabun transmission line the Energy Regulatory Commission & Office of the Energy Regulatory Commission 67 of EGAT, at the section of 115-kV Phichit - Akara Mining Rayong, Nikhomphatthana, Ban Khai and Pluak Daeng, in (revised section) for a distance of about 1.8 kilometers, Rayong Province. with the width of the right-of-way of the network system, rd measured both sides from the center of the transmission Meeting No. 29/2010 (103 ) line poles at a distance of 12 meters each. 4 November 2010 3. Approve the results of appeal deliberation regarding compensation for impacts caused by the natural 1. Give consent to the opinions on various projects gas network system, i.e. the 4th natural gas transmission as provided by the Sub-committee Regulating Energy pipeline project (Rayong – Kaeng Khoi) of PTT, in Network Systems and Energy Network System Operator at accordance with the opinion of the Sub-committee on the latter’s meeting No. 6/2010 (12th), held on 10 September Deliberation of Compensation at its meeting No. 8/2010, on 2010, for submission to the Minister of Energy for further 8 October 2010, which can be summarized as follows: (1) to presentation to the cabinet, pursuant to Section 11 (5) of adjust the price of land compensation to be twice as much the Act, of which the details are as follows: as the land price appraisal announced for use in the period 1.1 Support the PEA’s implementation of the 2008 - 2011, for 14 appellants; (2) to affirm the compensation project on speeding up extension of electrification areas to for a building for one appellant because the price is deemed cover households which, currently, still have no electricity, appropriate and fair; (3) to decline consideration of appeal because the project will help 91,527 households in 73 for land compensation of one appellant because the appeal provinces across the country to have access to electricity was filed after the timeframe specified by law; (4) to increase services, which will bring about development and help the compensation for spring onions for three appellants, disseminate prosperity to regional areas nationwide and but to decline consideration of the issue that the appellants which is in compliance with the intention of the Act that asked for compensation for spring onions grown outside aims to provide extensive energy services and to provide the natural gas network system and for the lost opportunity energy services for the underprivileged. The PEA is required cost of growing spring onions during the natural gas pipeline to prepare and disseminate detailed information about the construction, as the matter is beyond the ERC jurisdiction; number of electrified households and those still without however, the OERC is assigned to refer the matter to PTT electricity access across the country after the project to consider as appropriate; (5) to assign the OERC, together completion. In this regard, the project operation does not with an appellant and PTT, to re-examine the facts about the require a hearing of public opinions under Section 79 of amount of land covered by the natural gas network system the Act as the power distribution system expansion will be of the appellant; PPT will have to pay the appellant land along the existing road right-of-way of the Department of compensation in accordance with the amount of land verified Rural Roads and will not be carried out in any restricted by the re-examination; (6) to decline consideration of appeal zones, Class 1 A watershed areas, conserved forest areas, issues on land compensation, land filling, compensation for or other forest areas, and the project shall not affect the plants which are outside the natural gas network system electricity tariff that people have to pay, and the PEA has as well as for the loss of use, lodged by eight appellants, to periodically report its operation plan and progress to the because the matters are beyond the ERC jurisdiction, but to ERC after the project gets approval from the cabinet. assign the OERC to refer the matters to PTT to consider as 1.2 Support EGAT’s transmission system appropriate; (7) to give permission to one appellant to grow development project for power purchase from Mai-khot spring onions in the natural gas network system area; (8) thermal power plant because the project supports the to drop an appellant’s petition objecting to the construction government’s policy on overseas power purchase under of natural gas pipelines as there is no sufficient reason to the PDP 2010-2030, and helps stabilize the electricity justify reconsideration. tariffs, because the power purchase agreement from this 4. Agree to review the ERC resolution at the coal-fired power project is along term one, covering a period meeting No. 17/2010 (91st) on 22 June 2010, approving of 25 years, which can reduce the volatility of the power the application of land price appraisal, announced for generation cost in the future. The OERC is assigned to use during 2008 to 2011 as the criteria for calculating arrange a public hearing on the project pursuant to Section compensation payments to land owners for land covered 79 of the Act, by disseminating the project operation by the natural gas network system, i.e. the 4th natural gas information to provide the project details, procedures and the transmission pipeline project (Rayong – Kaeng Khoi) of rights of local people in areas covered by the transmission EGAT, by applying, instead, the price twice as much as lines, via the OERC website for a period of at least 7 days. the land price appraisal announced for use during 2008 to 1.3 Support EGAT’s implementation of the 2011 as the criteria for PTT to calculate land compensation main power transmission system expansion project to payments to land owners who have not yet been paid such accommodate 2,000–MW power purchase from SPP compensation and who are in the following districts: Muang cogeneration power plants, because the project supports

68 Annual Report 2011 the government’s policy on the purchase of power generated the projects, as proposed by the Ministry of Interior, and by cogeneration system, which encourages efficient that, in implementing the projects, the PEA shall strictly power generation under the PDP 2010-2030 and will also comply with the comments of the Ministry of Finance, the enable more power purchase from renewable SPPs using Bureau of Budget, the Office of the National Economics and wind energy in areas with high potential of wind energy. Social Development Board, and the ERC. Moreover, the Accordingly, the OERC is assigned to arrange a public PEA is directed to give first priority tothe implementation hearing on the project pursuant to Section 79 of the Act, by of electrification expansion to Pan Yi Island in Phang Nga disseminating the project operation information to provide Province, according to the proposal of the Minister of Health. the project details, procedures and the rights of local people 4. Approve the approach to the financial transfer in areas covered by the transmission lines, via theOERC (revenue compensation) among the three Power Utilities website for a period ofat least7 days. (Pus) in 2011 as follows: 2. Acknowledge the outcome of the public hearing 4.1 The ROIC of the three PUs shall be about PEA’s construction of a 115-kV transmission system determined at a level close to the WACC of each electricity with submarine cables, 3rd circuit, to Samui Island, Surat business. In determining the financial transfer among the Thani Province, that no comment on the project has been PUs in 2011, consideration shall be made whether it is received from the public; and acknowledge the opinions of appropriate to also take into consideration the amount of the Office of Natural Resources and Environmental Policy money derived from electricity tariff reduction due to the and Planning (ONEP) on the IEE report of the project, PUs’ investments that were lower than those proposed in according to which, in short, the presentation of the project their plans (clawback) during 2008-2009. details is unclear on many issues, such as, the period of 4.2 Allow, mutatis mutandis, the application of time and season when the survey on natural resources the financial transfer implementation plan among the PUs and environmental data along the submarine cable route in the year 2011, in the same manner as that in the year was undertaken have not been specified; no data analysis 2010, for the time being, by making the payment through and a summary of the study outcome have been provided; the Power Development Fund, under Section 97 (1) of the and it is still unclear whether the measures to prevent and Act. When the system for collecting contributions to the Fund correct the environmental impact and the impact monitoring is operational, the implementation plan shall be revised in and inspection measures as presented in the IEE report accordance with the system. will be mandatory or not; therefore, it is viewed that the 4.3 The OERC is directed to take into improvement and provision of the measures on various consideration ERC’s observations and comments when aspects should be made. taking actions as follows: (1) in calculating the WACC of Moreover, the cabinet, at its meeting on 3 March each electricity business, the Beta value (the β) to be used 2010, passed a resolution on the Master Plan for Coral in the calculation must be appropriate and accountable, and Reef Management of Thailand by demarcating the utilization should be the value that encourages the PUs to improve zones along the coral reefs at Samui Island in Surat Thani their operations with greater efficiency. The sources of β Province, for tourism and recreation, with the measures value to be used for calculating the WACC should befrom prohibiting such activities as dredging or changing seabed the β value of each electricity business, both domestic and characteristics within a distance of one kilometer from the overseas markets. In addition, in obtaining various figures coral reefs, except acts for safety of navigation. However, for calculating the revenue compensation of each PU, or in from the data in the IEE report, the coral reefs are found to using the concept of applying various assumptions, there be close to the submarine transmission cables, at a distance must be clear criteria in order to provide clear options of about 150 meter. Therefore, if the PEA constructs the for the ERC to make a decision. In this connection, the submarine transmission cables in such areas, the operation OERC should explore relevant information from as many will be against the Master Plan for Coral Reef Management. sources as possible to get the β value comparable to that In this regard, the PEA will have to seek for exemption from of the international market, to be used for calculating the the mentioned cabinet resolution. In this case, the ONEP WACC; (2) in calculating the WACC for the licensees, the has asked the PEA to avoid constructing the submarine same standards should be applied to be equally fair to transmission cables near exuberant coral reef areas and to all licensees; and (3) the OERC is tasked to expedite the strictly comply with the preventive and corrective measures issuance of the regulation as well as the compensation against impacts on the coral reefs. and subsidization criteria under Section 97 (1) of the Act, 3. Acknowledge the 12 October 2010 cabinet to enable the implementation of the Power Development resolution on the Projects on Submarine Cable Distribution Fund by January 2011. Once the criteria are operational, System Construction to Various Islands (Maphraoand Nakha the implementation plan shall be reviewed accordingly. Yai Islands in Phuket Province and Phra Thong Island in 5. Approve the consideration principle of electricity Phang Nga Province), that approval has been given to tariff reduction, resulting from the investment that was the Energy Regulatory Commission & Office of the Energy Regulatory Commission 69 lower than that proposed inthe plans of the three PUs in of a partnership to a private company, i.e. from “Nowarat 2008-2009, using the approach similar to the one applied Beverage Partnership Ltd.” to “Naowarat Beverage Co., for the implementation of such a matter in 2006-2007, and Ltd.” assign the OERC to consult with concerned agencies and In addition, the ERC makes a remark on power thoroughly check the completeness and accuracy of the distribution by SPPs having been granted electricity retail information in order to recommend the tariff reduction due licenses from the ERC; however, the licensing conditions to the lower investment than planned during 2008-2009 of do not cover the regulation of electricity tariffs that the the three PUs for the ERC consideration. In this connection, SPPs sell to their direct customers. Therefore, the ERC the OERC is directed to take the following actions according has a resolution to have the OERC study the approach to to the observations and comments of the ERC : (1) check, enable regulation of electricity tariffs that SPPs sell to direct in details, the reasons why the investment was higher or customers as well. lower than that in the plans of the three PUs, and invite the 6.4 Approve the guidelines on the three PUs to jointly consider the electricity tariff reduction implementation pursuant to Section 67, Clause two, of the resulting from the investment that was lower than their Constitution, by issuing ERC regulations to accommodate 2008-2009 plans; and (2) calculate additional figure options licensing consideration of a projector an activity that for the tariff reduction consideration due to the PUs’ lower maycausesevereimpact on the communitypursuant investment than planned in 2008 and 2009, based on the toSection 67, Clause two, of the Constitution, of which the actual cost and the cost following the CPI – X framework. contents will cover the criteria, procedures, regulations and In calculating the figure in the year 2008, the ROIC based implementation guidelines, including operational expenses; on the NEPC resolution on 17 October 2010 shall be used, the expenses for organizing a public hearing, as actually and for that in the year 2009, the ROIC from the revenue incurred, shall be collected from the energy industry compensation in 2009, which was approved by the NEPC, license applicants who fall under Section 67, Clause two shall be used. of the Constitution. In this regard, the OERC is tasked to 6. Approve the issuance of energy industry licenses screen the regulations, proclamations and criteria, including and matters relating to licensing, which can be summarized advantages and disadvantages of the proposed guidelines as follows: on revising related ERC regulations and proclamations, in 6.1 Approve seven power generation facility order that practical implementation could be undertaken, operation licenses, with a total engine power of 302,922.480 and present to the ERC for consideration. HP; six electricity generation licenses with a total installed 7. Acknowledge the result of the hearings on the capacity of 32.992 MW; twenty-five regulated energy regulations and announcements related to the Power production licenses as follows: (1) fourteen regulated energy Development Fund, and approve that the ERC regulation production licenses (new application) with a total generator on the Power Development Fund, B.E. …., be published rating of 2,670,305.18 kVA (2) six regulated energy in the Government Gazette. As for the ERC Proclamation production licenses (renewal) with a total generator rating on Sending Contributions to Power Development Fund for of 1,981,260.00 kVA (3) two regulated energy production Electricity Industry Licensees with Electricity Generation licenses (generating capacity expansion) ) with a total Licenses B.E. …., the OERC is instructed to revisethe generator rating of 57,465.00 kVA and (4) three regulated definition of “Station Service” to be “electricity energy which energy production licenses (renewal and generating capacity is used in generating or supporting generation process in expansion) renewal with a generator rating of 85,450.00 order to acquire electricity energy of such generation plant, kVA and generating capacity expansion with a generator for example equipment and machinery used in generating rating of 21,550.00 kVA. electricity as well as fuel management system, pollution 6.2 Approve the issuance of electricity industry treatment system or environment quality preservation licenses to existing energy industry operators prior to et cetera”. This is to make it clearer before having the the enforcement of the Act, consisting of one electricity proclamation published in the Government Gazette. distribution system license and one electricity retail license. 8. Acknowledge the drafting of the criteria for 6.3 Grant approval for two operators to revise setting tariffs under Section 65 of the Act, which is the the items in essence formerly licensed as follows: (1) PTT implementation pursuant to the NEPC resolutions of12 Utility Company Limited (the Central Utilities Center 1) to March 2010. In this regard, the OERC has coordinated expand the installed capacity from the previously approved with EPPO and the PEA to prepare the criteria for setting capacity of 154.10 MW to 230.04 MW and to expand the special tariffs for the electrification expansion project with power distribution system and to distribute power, in order submarine cables for electricity consumers on Sri Bo Ya, to sell electricity to one more power consumer who is not Puand Phi Phi Don Islands in Krabi Province. When the a licensee, from previously permitted 12 cases; and (2) project iscompleted, the formula and tariff calculation method Naowarat Beverage Partnership Ltd. to change the status will be made public, and the licensees will be allowed to

70 Annual Report 2011 propose the tariffs to the ERC for approval.Also, a public Mae Sai, Mae Yang Ho and Mae Yang Rong Sub-districts; hearing will be arranged and then proclamation will be in Song District, comprising Daen Chumphon, Hua Mueang made accordingly. For the determination of special tariffs and Huai Mai Sub-districts; in Nong Muang Khai District, for electricity consumers on other islands, the OERC will comprising Thung Khaeo Sub-district; and in Long District, expedite the study ona new electricity tariff structure for comprising Wiang Ta, Ta Pha Mok, Ban Pin Sub-districts; Maprao Island and Nakha Yai Island in Phuket Province, and (2) Lampang Province : in Mae Moh District, comprising and Phra Thong Island in Phang-nga Province, including Na Sak, Sop Pat and Mae Moh Sub-districts. Pan Yi Island in Phang-nga Province. In this connection, the width of safety zone for 9. Acknowledge the OERC’s handling of the issue energy transmission of both electricity network systems is on the impact on power plants due to the adjustment of designated at 30 meters, measured each side from the natural gas quality, by having sent a letter to the Association center of power transmission towers (making the total width of Private Power Producers (APPP) on 22 October of 60 meters). 2010 advising that the power producers who have been 3. Acknowledge the results of the human rights adversely affected by such natural gas quality adjustment violation investigation by the National Human Rights should officially send a complaint letter to PTT to have Commission regarding impacts of EGAT’s high-voltage a discussion and negotiation arranged on the issue of transmission wiring in the year 2006 and instruct the OERC expenditures incurred from the adjustment of natural gas to inform EPPO, in writing, the ERC operation results as quality, with evidences attached and reasons thereof. If follows: (1) the ERC has issued the ERC Proclamation on the negotiation can not be settled, the power producers, Criteria, Procedures and Conditions of Determination and being energy industry licensees, can bring the case to the Payment of Compensation, B.E. 2552 (2009), dated 3 April ERC for consideration, in accordance with Section 120 of 2009, in which compensation has been increased from the the Act. rates previously set by the EGAT at 50 percent and 70 th percent for farmland and horticultural land, respectively, to Meeting No. 30/2010 (104 ) be at the same rate for both types of land, i.e. 90 percent, 12 November 2010 effective since 23 April 2009; and (2) in Fiscal Year 2011, the OERC will undertake a study on the forms of and 1. Approve the diagram showing details of the approaches for compensation payment, resulting from the direction and right-of-way boundary for laying the electricity infringement upon the general public’s rights on properties, network system, as requested by EGAT to revise the in order to reflect the economic, social and environmental boundary of the 500-kV transmission line, linking Pluak costs, both in the present and in the future, including the form Daeng - 500-kV Nong Chokgrid connection point – Wang of actual compensation payment to concerned individuals. Noi, Line 2 (Revised Section), for a distance of about 423.95 The information obtained will be used to determine a meters, with the width of the electricity network system area framework for compensation payment for the infringement of 30 meters, measured each side from the center of the upon the general public’s rights on properties, to be suitable transmission towers (making the total width of 60 meters). and fair toall parties. The study is expectedto take about 2. Approve the electricity network system right- one year and the outcome will be presented to the NEPC of-way boundaries of the power transmission system for acknowledgement. development projects for power purchase from Hongsa In addition, the OERC is directed to inform EGAT, Lignite thermal power plant, as proposed by EGAT,as in writing, that the ERC has considered the issue of follows: speedy follow-up on the Ministerial Regulation issuance 2.1 The 500-kV Border (in Nan Province) - Nan regarding the exemption from inclusion in the revenue tax 2 transmission line, starting from the border area of Nan calculation the compensation that a person has received Province to Mueang Nan District, covering a distance of in compensation for the infringement upon his rights on about 60 km and passing across the following local areas the land covered by the construction of EGAT’s electricity : (1) Song Khwae District, comprising Chon Daen and Na network systems. The meeting views that this matter has Rai Luang Sub-districts; and (2) Tha Wang Pha District, been dealt with at the policy level by the Ministry of Energy comprising Pha To, Saen Thong, Pa Kha, Si Phum and and has been referred to the Ministry of Finance, which Tan Chum Sub-districts. has directly responsibility. Therefore, the ERC wishes to 2.2 The 500-kV Nan 2 - Mae Moh 3 transmission advise EGAT to further follow up the status of the matter line, starting from the border between Nan Province and with the Ministry of Finance. Phrae Province to Mae Moh District in Lampang Province, 4. The ERC has considered the implementation covering a distance of about 104 km and passing across the guidelines and the determination of the rates of contributions following local areas : (1) Phrae Province : in Rong Kwang to the Power Development Fund for expenditures under District, comprising Huai Rong, Phai Thon, Rong Kwang, Sections 97 (4) and 97 (5) of the Act, and has the opinion the Energy Regulatory Commission & Office of the Energy Regulatory Commission 71 that the OERC should revise and re-submit the following 2. Acknowledge the hearing outcome on EGAT’s to the ERC for reconsideration : (1) clear objectives of the main power transmission system expansion project to contribution collection and the goals of utilization of money accommodate 2,000-MW power purchase from SPP from the Power Development Fund for implementation cogeneration power plants, and instruct the OERC to notify of activities according to Sections 97 (4) and 97 (5); (2) concerned parties of the ERC opinion accordingly, i.e. suitability analysis of the determination of contribution rates the ERC supports EGAT’s implementation of the project to the Power Development Fund, with relation to the goals because it supports the government’s policy to purchase of money utilization, benefits that people and the nation will power generated by cogeneration system,which encourages receive, and the impact on electricity tariffs; (3) the forms efficient power generation under the PDP 2010-2030 and of subsidy provision that should be widely opened in order will also enable more power purchase from renewable to support incentive measures, in terms of pricing, to boost SPPs using wind energy in areas with high potential of investment in renewable energy projects as well as other wind energy. forms of renewable energy promotion and support that will 3. Approve the issuance of energy industry be introduced in the future, such as Feed-in-Tariff Measure, operation licenses and other related issues as follows: etc.; (4) the approach for integrated project consideration 3.1 Approve six electricity generation licenses between the OERC and the Ministry of Energy to promote with a total installed capacity of 24.393 MW; three regulated renewable energy; and (5) the follow-up, inspection and energy production licenses as follows: (1) two regulated evaluation of the outcome of the Power Development Fund energy production licenses (new application) with a total utilization. generator rating of 5,450 kVA and (2) one regulated energy 5. Acknowledge the progress of the Power production license (renewal) with a total generator rating of Development Fund establishment in accordance with 8,250 kVA. the Act, and instruct the OERC to further report to the 3.2 Consider and acknowledge, in principle, NEPC. The OERC shall take into consideration the the draft ERC Proclamation on Criteria, Procedures and ERC’s observations when reviewing the Power Purchase Conditions for Suspension or Revocation of Energy Industry Agreement (PPA), so that the cost pass-through, i.e. on Licenses, B.E. …., and instruct the OERC to revise the the cost incurred from sending contributions to the Power draft proclamation as per the following comments and re- Development Fund of the three Power Utilities’ power submit to the ERC for consideration : (1) The determination plants and the increasing expense resulting from the PPA of license suspension period shall take into account the review, would be fair to electricity consumers. Since the period according to the service quality standard; therefore, mentioned review allows that the amount of contributions it is appropriate to apply the period in accordance with the sent to Power Development Fund, on the part of the sale to service quality standard to the consideration of the license the PUs, can be passed through to the electricity tariffs in suspension period to be compatible with each other; (2)

accordance with the Ft formula, some operators may receive As there are many types of energy industry licenses under refunds from the PUs that are higher than the contributions the ERC regulation, it is deemed appropriate to consider they sent to the Power Development Fund. Therefore, the licensesuspension and revocationto be applied to each type, PPA review should be thoroughly considered with prudence based on the Regulatory Impact Assessment; (3) In the case because it is related to the electricity tariff structure and the where a licenseelacks qualifications or fails to comply with

mechanism for calculating the Ft. the ERC regulations issued under Section 50 of the Act, but th where no serious damage is caused to the public interest, Meeting No. 31/2010 (105 ) the ERC shall notify the licensee, in writing, to conduct or 18 November 2010 make correction within 15 days. If the 15-day period is over and the licensee has still not conducted or improved the 1. Acknowledge the hearing outcome on EGAT’s matter, the ERC shall give a written warning to the licensee power transmission system projectfor power purchase from to conduct or improve the matter within 15 days, and also Mai-khot thermal power plant, and instruct the OERC to order the suspension of his license, for a period defined notify concerned parties of the ERC opinions accordingly, by the ERC, including determining the administrative fine. i.e. the ERC supports the project because it supports the If the 15-day period is over and the licensee has not yet government’s policy on oversea power purchase under the conducted or improved the matter, the ERC shall order PDP 2010-2030, and helps stabilize the electricity tariffs, as revocation of his license. In this connection, an operation the power purchase agreement from this coal-fired power manual or a manual for adjudication of a serious case project is a long term one, covering a period of 25 years, should be prepared; and (4) The ERC shall consider whether which can reduce the volatility of the power generation cost any lack of qualifications or any non-compliance with ERC in the future. regulations causes serious damage tothe public interest,

72 Annual Report 2011 or not. The ERC order delivered in such a case shall be projects have in place the measures to control and mitigate treated as final. the environmental impact, as specified by law. In this regard, 4. Approve the review of the ERC resolution EGAT will have to request permission to operate the projects reached at the meeting No. 23/2010 (97th), on 19 August pursuant to related laws as well as the extension of the 2010 on appeal deliberation regarding compensation for generation capacity specified in the electricity generation land covered by the right-of-way of EGAT’s 500-kV Nam licenses, as specified by all related laws before starting the Phong 2 – Udon Thani 3 transmission line, by : (1) to supply of electricity into the system. increase the compensation for land of one appellant to 2. Approve the registration of neutral agencies to 264,000.00 baht per rai, for the whole land parcel to be carry out measurement of the indicator of the ability to use equal to the land compensation for land parcels nearby; and primary energy in the power and heat generation process (2) to dismiss the appeal for compensation for eucalyptus (Primary Energy Saving: PES), as follows: trees of one appellant, since the trees were planted after 2.1 Approve the applicants to be enlisted as the announcement on the electricity network system area registered neutral agencies for PES measurement (PES had been made; therefore, the case is not eligible for neutral agencies), totaling 4 agencies, as follows: (1) compensation in accordance with the ERC Proclamation on Bright Management Consulting Co., Ltd., (2) Direction Plan Criteria, Procedures and Conditions of Determination and Co., Ltd., (3) Energy Research Institute, Chulalongkorn Payment of Compensation, B.E. 2552 (2009), as amended University, and (4) Arun Chaiseri Consulting Engineers up to No. 2, B.E. 2553 (2010), and instruct the OERC to Co., Ltd., for EGAT and SPPs (contract parties) to jointly refer the matter to EGAT for consideration and assistance select a PES neutral agency to carry out activities pursuant according to EGAT regulations. to the PPA terms and to measure the PES ratio, based 5 Assign the OERC to undertake a study on the on the Manual for Measuring Efficiency of the Combined energy industry regulatory approach to promote the increase Heat and Power System and Calculating the PES Ratio of in projects related to Clean Development Mechanism (CDM), Cogeneration SPPs (Efficiency Measurement Manual). In Environmental Management, and Global Climate Change, this regard, EGAT is assigned to check that the mentioned in consultation with the Ministry of Energy. PES neutral agencies do not have common interests th with any SPPs which are contract parties with EGAT in Meeting No. 32/2010 (106 ) connection with the PES measurement before proceeding 25 November 2010 with next steps in the process. 2.2 Direct the OERC to announce the list of Approve the issuance of energy industry operation applicants that are approved by the ERC to be PES neutral licenses as follows: agencies on the OERC website and to carry out public 1. Approve the issuance to an existing electricity relations work, via the OERC website, to encourage more industry operator that operates the business prior to the entities interested to be registered as PES neutral agencies enforcement of the Act as follows: one electricity generation to submit their applications there of. In examining the license with a total installed capacity of 39.50 MW; one qualifications of the applicants, the criteria for PES neutral electricity distribution system licenses; one electricity retail agency procurement, as approved by the ERC, shall be license. applied. 2. Approve one power generation facility operation 2.3 Assign the OERC to set the criteria for license with a total engine power of 1,616.79 HP; one monitoring the implementation of the PES neutral agencies, regulated energy production licenses (new application) with with the ERC comments on the matter as follows: (1) a PES a total generator rating of 5,805.00 kVA. neutral agency should be required to prepare an annual th report on the PES measurements, according to the Efficiency Meeting No. 33/2010 (107 ) Measurement Manual and the calculation of the PES ratio 7 December 2010 of Cogeneration SPPs; and (2 ) a penalty clause should be set out in such a way that, for example, if the inspection 1. Approve the comments made on Wang Noi of PES neutral agency implementation reveals that any Power Plant Project, Block 4, and Chana Power Plant person on the PES neutral agency list, with approval from Project, Block 2, for submission to the Minister of Energy the ERC, has moved out or quitted the concerned PES for consideration and further presentation to the Cabinet, neutral agency without notifying the OERC or the ERC, which is in accordance with Section 11 (5) of the Act, that the ERC can delete the name of that PES neutral agency is, the ERC supports the implementation of the two projects from the PES neutral agency list. because they are financially and economically cost-effective, 3. Approve EGAT’s presentation of the 2nd draft and respond to the power demand of the country as well as amended PPA and draft additional amendment to the enhance the national power system security. Moreover, the agreement of Siam Energy Co., Ltd. to the EGAT Board the Energy Regulatory Commission & Office of the Energy Regulatory Commission 73 for consideration and then to the ERC for re-consideration. relevant laws, and propose to the ERC for consideration. Moreover, the OERC is instructed to check the return on 5. Acknowledge the public hearing results on the investment again to ensure that it is not higher than that draft ERC Regulationon the Power Development Fund for of the project in the original location and to check the PPA Development or Rehabilitation of Localities Affected by amendment that is beyond the NEPC framework. EGAT is Power Plant Operation, B.E. ...., and instruct the OERC required to give accompanied opinions to affirm that such to take the obtained comments into consideration when amendments will not result in increased costs and will not improving the draft regulation for further submission to the affect the essence of competitive bidding, and then inform ERC for approval. concerned parties to act accordingly and present the matter 6. Acknowledge the result of drawing lots to to the ERC for further consideration. discharge from office members of the Energy Regulatory 4. Approve the issuance of energy industry Commission pursuant to Section 17 of the Act, as follows: (1) operation licenses and other related issues as follows: Mr. Chalit Ruengvisesh, expert in electrical energy; (2) Mr. 4.1 Approve four power generation facility Chongchet Boonkerd, expert in finance and accounting; and operation licenses with a total engine power of 29,592.73 (3) Mr. Supichai Tangjaitrong, expert in natural resources HP; three electricity generation licenses with a total installed and environment or consumer protection. capacity of 44.399 MW and; two regulated energy production th licenses (new application) with a total generator rating of Meeting No. 34/2010 (108 ) 16,975.00 kVA. 14 December 2010 4.2 Approve the issuance to an existing electricity industry operator that operates the business prior 1. Approve the result of power purchase proposal to the enforcement of the Act as follows: one electricity consideration, involving 22 projects with a total proposed generation licenses with a total installed capacity of 15.00 sale capacity of 1,980 MW, which is within the power MW and; two gas retail licenses through natural gas purchase framework of approximately 2,000 MW, following distribution system which total sent out volume in 2011 is the NEPC resolution of 24 August 2009, as presented 21,814,390.25 BTU. by EGAT. The EGAT is instructed to inform those who 4.3 Approve changes of previously licensed have been selected of the consideration results and also items of three licensees, as follows: (1) Erawan Power Co., the condition that EGAT reserves the rights to determine Ltd., to expand its installed capacity from the previously the scheduled commercial operation date (SCOD) of the approved capacity of 15 MW to 24 MW; (2) Mitr Phu Wiang selected projects to correspond with Thailand PDP. Sugar Factory Co., Ltd.,to expand its electricity distribution 2. Approve the assumptions used to estimate the system to distribute electricity to one more electricity financial status in the period 2010-2011 of the three Power consumer who is not a licensee, for its electricity distribution Utilities (PUs) and assign the OERC to examine relevant system license and electricity retail license; and (3) Phukhieo information so as to determine an appropriate Beta value (β Bio-Energy Co., Ltd., to expand its installed capacity from value) for use in calculating the WACC, and to coordinate the the previously approved capacity of 52.94 MW to 76.94 MW implementation in detail with the PUs before submission to and to have four more customers. In addition, the ERC has the ERC for further consideration. The following comments a resolution acknowledging the change in address of the shall also be taken into consideration : power generation facility of Naowarat Beverage Co., Ltd. 2.1 Details and comparison between the pros 4.4 The ERC has considered the request for a and cons of each method for determining the β value review of the annual fee collection for the energy industry must be clearly prepared, both the β value calculated by operation (Natural Gas Storage and Transformation of the Ministry of Finance and that calculated by the OERC. Liquid to Gas License) in the case of PTT LNG Co., Ltd., Moreover, the OERC should examine the average β value in accordance with the ERC resolution at the meeting No. from a sample group of companies operating the power 27/2010 (101st) on 7 October 2010, which accounts for industry in foreign countries, where the power industry an amount of 25,000,000.00 baht, excluding VAT. The structure is similar to Thailand’s, and should limit the number company has requested to pay part of the amount first of sample group to be at an appropriate level. because its project is still under construction and hence 2.2 In the case that the Ministry of Finance unable to run the system. The ERC views it appropriate requires the PUs to send the remittance at a rate of 45 to collect the annual fee for the energy industry operation percent of the net profit, it is a relatively high proportion, as per the rate specified. Moreover, the ERC passes an and such an amount will become a component of the additional resolution to have the OERC review the criteria, electricity cost. If the proportion of the remittance to the procedures and conditions for disbursement of the license state is reduced, electricity tariffs can also be reduced. fees and annual energy industry operation fees so as to lay 2.3 The financial transfer implementation plan down practice guidelines that are suitable and comply with among the PUs in the year 2011, as proposed by the

74 Annual Report 2011 OERC, provides a broad framework. However, there must have to bear and that can be passed through to consumers; be details about the issuance of proclamations and/or (2) the balance between the use of legal measures and regulations related to Section 97 of the Act regarding the tax measures -- the operators should be motivated to implementation procedures of financial transfer among the manage the pollution originated from their own sources PUs. Therefore, the OERC is also tasked with this matter. before emitting it into the environment; and (3) there 2.4 Different calculation of the financial internal should be promotional measures for the operators who can rate of return (FIRR) should be applied to normally effectively control the amount of environmental impact, with operated businesses and those which are the Universal reasonable benchmarks, and support measures for those Service Obligation (USO) or the Public Service Obligation who can successfully meet the benchmarks.In this regard, (PSO) in determining the financial transfer among the PUs. the criteria for determination of units for taxation and fee However, it should be allowed, mutatis mutandis, to use collection must be actually measurable and reliable, and the average rate of return (single rate per business) for the consideration must be made on the agencies that will jointly time being because,in calculating the FIRR of each PU, perform data checking too. both normal businesses and USO/PSO have been taken 3.4 The penalty in terms of imprisonment and into consideration, including fairness to both producers and finerates should be reviewed. consumers. 3.5 The scope of law should be reviewed as 2.5 The calculation of the β value should be it is widely enforced, but still no clarity on principles and revised, by selecting the average value from a sample practice guidelines. Also, amendment should be made group of similar businesses in other countries, of which the on the effectiveness of the law, i.e. to take effect after 90 information must be up-to-dateand best represent the PUs. days as from the date ofits publication in the Government 2.6 It may not be appropriate to use the β value Gazette, and the transitory provisions should be added to of the Ministry of Finance to calculate the WACC as the reduce problems in practice at the initial stage. objectives of its usage are different. Therefore, reference 4. Approve, in principle, the proposal to revise the should be made to domestic electricity businesses or similar draft ERC regulations draft on the Power Development overseas electricity businesses; and the β value taken as Fund for local development or rehabilitation affected by the reference should be the latest one that is compatible with operation of the power plant, B.E. …. the current situation. th 3. Acknowledge the essence of the Draft Act on Meeting No. 35/2010 (109 ) Fiscal Measures for the Environment, B.E. ...., and provide 27 December 2010 comments on the Draft Act, at a meeting on 7 December 2010, which can be summarized below : 1. Give consent to the following opinions on various 3.1 Public sector members from the following projects, as advised by the Sub-committee Regulating three agencies should be added tothe Committee Monitoring Energy Network Systems and Energy Network System Fiscal Measure Policy for the Environment, i.e.the Operator at the latter’s meeting No. 7/ 2010 (13th) held on Permanent Secretary of Energy, the Permanent Secretary 22 December 2010, for submission to the Minister of Energy of Transportation and Communications, and the Permanent for further presentation to the Cabinet for consideration, Secretary of Agriculture and Cooperatives. In addition, a which is in accordance with Section 11 (5) of the Energy review should be made on the authority and duties that Industry Act: may be redundant and confusing in practice, particularly on 1.1 Support PEA’s Distribution System Reliability the part related to the sources of pollution and the use of Improvement Project, Phase 3, because the project will natural resources, which is under the authority and duties of strengthen security and reliability of the power transmission the National Environment Board and the Ministry of Natural and distribution systems and is in accordance with the Resources and Environment. Power System Development Plan of the PEA under the 3.2 The Environmental Tax and Fee Fund should 10th National Economic and Social Development Plan be reviewed as it may duplicate the Environmental Fund (2007-2011). The PEA will have to officially report the and the Power Development Fund, which would create improvement plan and results of the operation to the ERC an undue burden for operators and consumers (or energy on a quarterly basis. Moreover, the PEA must revise the users). amount of the project investment cost for the Cabinet 3.3 Criteria on taxation and fee collection need consideration if the total investment costis higher than to be appropriately designed in order to create fairness the approved budget. However, no public hearing on the and notto increase the cost to the country without solving project under Section 79 of the Act will be required, as the problems. The fundamental components that should be project activities, that is,the substation improvement--which taken into account are : (1) the ratio between the Polluter will use the same construction method as that for general Pays Principle and the increasing burden that the operators building construction--and the poling and wiring–which will the Energy Regulatory Commission & Office of the Energy Regulatory Commission 75 be carried out in the are as along the highways and which quality, energy tariffs and efficiency of the investment project, require limited construction sites and a short construction so as to be the associated information for consideration by duration, will not render the project to be considered as the ERC.

a project that will affect the main interest of the public. 2. Approve the report on Ft calculation factors However, during the construction period, the public maybe for the round of June-September 2010, pursuant to the affected by noise, dust and waste that may be higher in resolution of the Sub-committee Regulating Energy Tariffs amount than those in the normal time. Therefore, the PEA and Service Charges at its Meeting No. 3/2010 (14th) on 24 must prepare measures to mitigate such impacts, including December 2010. The accumulated difference (AF) between

control measures to ensure safety during the construction. the actual Ft (derived from calculation) and the Ft charged 1.2 Support PEA’s Transmission System and in the month of September 2010, which was 63.23 satang Substation Development Project, Phase 9, as the project per unit, or a sum of 7,781.62 million baht, will be carried will increase power supply capacity of the system, which will over as the AF in the month of October 2010, at about 62.88 enhance adequate and efficient electricity service provision, satang perunit. This information will be taken into account

increase the electricity service quality owing to the security when considering the Ft adjustment for the billing round of and reliability of the power system, and reduce problems January- April 2011.

of power system operation and maintenance. Besides, 3. Approve the Retail Ft estimation for the billing the project complies with the Power System Development round of January- April 2011 at a rate of 86.88 satang per th Plan of the PEA under the 10 National Economic and unit; approve the Wholesale Ft calculation for charging Social Development Plan (2007-2011). In carrying out the to the MEA and PEA in January-April 2011 at 86.53 project, the PEA will have to comply with relevant laws, and 86.74 satang perunit, respectively; and approve the that is, to prepare the EIA report of the project in Part 1 for implementation pursuant to Section 67 of the Act, that is, submission to the ONEP for consideration and comments, to arrange a hearing on the electricity tariffs according to

to be accompanied with the project presentation to the the Ft formula for the billing round of January-April 2011 via Cabinet for approval, as the project involves the construction the OERC website from 28 December 2010 to 5 January passing through 1A and 1B watersheds, and to take action 2011 by 16.30 hrs. in accordance with the opinions of the National Cooperative 4. Acknowledge the NEPC resolution at its Meeting Development Board on the revision of project cost, and to No. 3/2010 (132nd) on 25 November 2010, and instruct the further present the revised Power System Development Plan OERC to take relevant action to comply with the policy as under the 10th National Economic and Social Development follows: Plan (2007-2011) to the Cabinet for consideration. In this 4.1 Agree with the approach for implementing connection, it is not necessary to arrange a hearing under measures to reduce power tariff burden of flood victims, Section 79 of the Act, as the project activities, i.e. the as proposed by the Ministry of Energy, and assign EGAT, poling and wiring, will be carried out in the areas along MEA and PEA to implement the measures accordingly. The the highways, which require limited construction sites and ERC is assigned to regulate the implementation to ensure a short construction duration, thus the project will not be its compliance with the policy. considered as a project that will affect the main interest 4.2 Assign the OERC to consider reviewing the of the public. However, during the construction period, the definition of “public electricity tariff” in the study onthe new public may be affected by noise, dust and waste that may be electricity tariff structure, to be appropriate and fair. higher in amount than those in the normal time. Therefore, 4.3 Approve the increase in “Adder” provision the PEA must prepare measures to mitigate such impacts, to the VSPPs and SPPs that generate electricity from including control measures to ensure safety during the renewable energy in Chana, Thepha, Saba Yoi, and Na construction. For Part 1 of the project, which fails within the Thawi Districts in Songkhla Province, by increasing the requirement for the EIA Report preparation, the PEA shall Adder for wind energy projects and solar energy projects strictly comply with relevant regulations and requirements by 1.50 baht per kWh and for biomass, biogas, small for submission to the ONEP for further consideration. hydropower and waste energy projects by 1.00 baht per Moreover, the ERC has an additional resolution kWh. This will be applicable to projects that have not yet on the issue related to the project consideration, that is, received purchase power notifications in the mentioned four the ERC approves, in principle, for a licensee who wishes districts and renewable energy projects that will offer the to propose a plan or investment project in the energy sale of electricity in the future. industry, or an energy network system plan to the ERC for 4.4 Approve the proposed operational approach consideration, shall present the result of energy industry of the Community Development Fund in are as surrounding regulation impact analysis such as the energy service the power plants during the transitional period, with the

76 Annual Report 2011 following steps : (1) to prepare a report on the survey of measures on tourism rehabilitation and assistance to tourism existing property by 31 December 2010; (2) to prepare a industry operators affected by domestic political crisisas well report on the operations result and a financial report by 31 as the request for cancellation of minimum electricity tariff March 2011; and (3) to take action to revoke concerned charge, by assigning the MEA to take relevant actionand committees and donate the money and property of the instruct the OERC to notify the Secretariat of the Cabinet, Community Development Fund to the Power Development the Ministry of Energy and the MEA for acknowledgement Fund within 15 days after the money and property account and further action in related matters. closure. Moreover, it is deemed appropriate to suspend 6. Approve the issuance of energy industry money transfer to the Community Development Fund as operation licenses and other related issues as follows: from 1 December 2010 onwards. EGAT is tasked to keep 6.1 Thirty-one power generation facility operation all remaining money of the Community Development Fund licenses with a total engine power of 687,018.92 HP; five for the time being and to coordinate the money delivery to electricity generation licenses with a total installed capacity the OERC for further allocation to the Power Development of 21.963 MW; five regulated energy production licenses as Fund. follows: (1) two regulated energy production licenses (new 4.5 Approve, inprinciple, the power transmission application) with a total generator rating of 8,805.00 kVA system expansion project to accommodate SPPs using and (2) three regulated energy production licenses (renewal) cogeneration system and renewable energy, and instruct with a total generator rating of 1,023,791.00 kVA. EGATto take comments of concerned agencies to further 6.2 Approve the issuance of two electricity act in accordance with related regulations and laws, and generation licenses with a total installed capacity of 59.00 also instruct concerned agencies to expedite the work on MW to an existing electricity industry operator that operates their part so that EGATcould implement and complete the the business prior to the enforcement of the Act. project by 2015, as planned. 6.3 Approve the change of licensed item of Khon 4.6 Approve the policy and approach for Kaen Sugar Power Plant Co., Ltd. (Bo Phloi), by expanding calculating the LNG price and LNG terminal service tariff. the installed capacity from 45.00 MW to 90.00 MW. The LNG price structure formula can be summarized below. 6.4 Acknowledge the progress report in

PLNG = LNG content price + LNG terminal September 2010 and that in October 2010 on the service tariff implementation to improve measures on environmental whereby: LNG content price = imported LNG impact prevention, remedy and mitigation, as well as price (monthly weighted average) + import cost environmental quality monitoring and inspection, in the and acknowledge the criteria framework for points that failed to comply with those specified in the EIA calculating the LNG terminal service tariff. In this regard, report of the 74-MW combined cycle power plant project of the ERC is assigned to determine the criteria framework for the Advance Agro Public Company Limited, and approve calculating the LNG terminal service tariff, in accordance a 3-month extension ofthe implementation duration for with Section 65 of the Act. National Power Plant 5 Co., Ltd.,to improve measures on 4.7 Approve the revision to the short-term environmental impact prevention, remedy and mitigation, program of power plant projects in order to meet the as well as environmental quality monitoring and inspection, increasing electricity demand, i.e. approving the approach in the points that failed to comply with those specified in to solving problems in the immediate term, namely : (1) the EIA report of the 74-MW combined cycle power plant expedite the development of EGAT’s North Bangkok Power project of the Advance Agro Public Company Limited, from Plant, Block 2 (800 MW); (2) revise the plan for power previously 9 months (ending December 2010) to 12 months purchase from cogeneration SPPs, with firm contracts, (ending March 2011). by increasing the purchase amount by about 1,500 MW 7. Approve the draft ERC regulation on the Power from the initial 2,000 MW, thus making a total purchase Development Fund for local development or rehabilitation of about 3,500 MW, and to consider from the 2010 power that has been affected by the operation of the power plant, sale proposals from cogeneration SPPs, with firm contracts, B.E. …., to be published in the Government Gazette, which are under consideration by the ERC; and (3) expedite and assign the OERC to coordinate with the Secondary the development of EGAT’s Wang Noi Power Plant Project, Legislation Drafting Working Group to consider the Unit 4 (800 MW), and Chana Power Plant Project, Unit 2 possibility to give priority to staff and employees under the (800 MW). The Ministry of Energy and EGAT are assigned former Community Development Fund to apply to be staff to take further action to be in line with Thailand PDP. and employees under the Power Development Fund in each 5. Approve the scope, the number of affected designated area. business facilities and the financial assistance budget for the

the Energy Regulatory Commission & Office of the Energy Regulatory Commission 77 Meeting No. 1/2011 (110th) After that, EGAT is allowed to include the total amount of 6 January 2011 assistance in the calculation according to the Ft formula. 4.2 For the measure on reduction of people’s 1. Approve the principle of the draft criteria for cost of living burden (electricity bills), the implementation determining service tariffs fornatural gas storage and will follow the Cabinet resolution of 21 December 2010, transformation of liquid to gas, and instructthe OERC which has designated the responsible state enterprises to to improve and add detailed requirements about the carry out the measure, by getting aloan to compensate the operational standards of the business, including improving revenue due to the implementation of the measureover the the implementation plan for the development of the draft extended period (from 1 February 2009 - 30 September criteria to correspond with the operation, for submission to 2010), and which has instructed the Bureau of the Budget the ERC for consideration. to consider allocating the annual expenditure budget to

2. Approve the Ft rate adjustment for the billing repay the principal, loan interest and othercosts of loan to round of January-April 2011, as follows: the responsible state enterprises. In this connection, for 2.1 Acknowledge the hearing outcome on the the burden incurred which is caused by the extension of

electricity tariff according to the Ft formula for the billing the measure, the MEA and PEA may have to get loans to round of January-April 2011. undertake the measure following the government policy;

2.2 Approve the Retail Ft rate for charging to hence the government will later repay the principal, loan electricity consumers in the billing round of January-April interest and other costsof loan to the PUs. 2011 at 86.88 satang perunit (excluding VAT), divided into 4.3 The implementation guidelines of the

Ft for the generation business, transmission business and Distribution Utilities include: distribution business at a rate of 93.40, -2.41, and -4.11 4.3.1 The calculation of electricity tariffs is per unit, respectively. divided into 2 cases, based on 4.1 and 4.2 above. The

2.3 Approved the Wholesale Ft rate for charging electricity tariff reduction pursuant tothe measure to reduce to the MEA and PEA in the billing round of January-April people’s cost of living burden and the reduction pursuant 2011 (excluding VAT), at 86.53, and 86.74 satang per unit, to the measure to help flood victims (flood discount) are respectively, different in the following aspects : (1) the calculation 3. Instruct the OERC to examine the appropriate β method—the tariff discount forflood victims is considered value to be used for calculating the WACC which will serve as a commercial discount that the PUs will reduce the as an assumption in preparing the financial status estimation electricity chargeas pertheactual expense, but no more in the period 2010-2011 of the three Power Utilities (PUs) than 100 baht, before the VAT calculation, (flood discount

in the consideration of revenue compensation among the = electricity tariff + Ft + service charge), but the discount PUs in 2011, for re-submission to the ERC. under the measure to reduce the cost of living burdenis 4. Approve the approach for implementing the the reduction of people’s electricity expense burden that measure on electricity tariff reduction for flood victims and the government will entirely absorb; therefore, the PUs the measureon reduction of people’s cost of living burden, will reduce the electricity charge by the amount of all as follows: actual expenses, including VAT, (burden absorbed by

4.1 For the measure on electricity tariff reduction the government = electricity tariff + Ft + service charge + for flood victims, it is agreed to use the approach following VAT); and (2) the sources of fund -- for the electricity tariff the NEPC resolution, which can be briefed as follows: (1) discount for flood victims, the actual cost is calculated in

determine the groups eligible for assistance, such as all the Ft formula, but for the cost of living reduction measure, residential electricity consumers in the flooded areas, based the government will absorb the burden or will seek other on the report on disaster situations of the Department of sources of fund to support the implementation. Disaster Prevention and Mitigation, Ministry of Interior; 4.3.2 Consideration of electricity tariff (2) exercise the electricity tariff reduction for residential reduction for electricity consumers who are eligible for the electricity consumers in accordance with the specified tariff reduction under both measures–electricity consumers criteria for a period of 3 months (January-March 2011) at who are eligible for the tariff reduction under both measures the amount actually paid by the electricity consumers, but are residential consumers in the flood-hit areas, with not more than 100 baht; and (3) as for the source offund electricity consumption not exceeding 90 units per month. for the implementation, it is deemed appropriate that EGAT If the electricity tariff reduction calculated from the actual reduces the wholesale electricity tariffs charged to the consumption is applied to such consumers, the amount MEA and PEA in the round of January-March 2011, by of the electricity tariff discount under the people’s cost of the amounts following the MEA and PEA implementation living burden reduction measure will be higher than the pursuant to the criteria of above-mentioned measures. amount under the flood victim assistance measures (the

78 Annual Report 2011 latter caps the support at 100 baht). So, the discount that round, RPCL and IPPs from the 2007 bidding round, and gives maximum benefits should be applied, as follows: (1) in it is proposed that additional amendment be made to the the case where electricity consumption does not exceed 90 PPAs to include the tariff adjustment on the part of the units, the discount under the cost of living burden reduction Power Development Fund contribution burden, as their measure shall be applied (the tariff is calculated based PPA conditions are different; for SPPs, they will bedivided onthe actual consumption), and (2) in the case where the into two types, i.e. SPPs with firm contracts and SPPs with consumption is over 90 units, the flood discount at 100 baht non-firm contracts, and into two systems, i.e. cogeneration per month shall be applied. system and renewable energy system. Accordingly, EGAT is 4.3.3 In the electricity bill, the following assigned to apply the mentioned approach to the negotiation information will be indicated : (1) in the case where power on PPA amendment with the contract parties, and report consumption does not exceed 90 units and where the cost to the ERC for information. of living reduction measure is applied, “the government 5.2 Approve the PPA revision approach to deal absorbs the burden” will be indicated, which is in line with with renewable energy SPPs with non-firm contracts and the existing practice; however, a Cabinet resolution shall be VSPPs as follows: (1) agree to increase the power purchase awaited as to which source of fund will be used to support price by an amount equal to the contribution sent to the this measure; and (2) in the case where power consumption Power Development Fund, based on the amount of energy exceeds 90 units and where the flood discount is applied, supplied to the PU systems, pursuant to the NEPC resolution “flood discount” will be indicated. of 28 June 2010; (2) agree to adjust the formula for power 4.3.4 For new electricity consumers who purchase price calculation in order to reflect the burden of apply for electricity services as from January 2011 onwards, sending contributions to the Power Development Fund, by they shall not be eligible for the flood victim assistance leaving out first the average Fund burdeninthe Wholesale measure (flood discount), since the flood incident has passed Ft, then plus the contribute on to the Fund burden of each since November 2010. Persons who are entitled to the flood Non-Firm SPP and VSPP; and (3) the MEA and PEA shall discount must be the existing electricity consumers only. revise the regulation for the purchase of power from VSPPs, 4.3.5 In the case where electricity consumers currently effective, on the part of the power purchase price obtain special rights to electricity tariff reduction, e.g. under the contract, to be used as an annex to the PPA in the veteran discount, the tariff deduction from the place of the former regulations. veteran discount rights will be made first, followed by 6. Approve of EGAT’s announcement on the the implementation guidelines set forth, that is, further electricity network system exploring zones for two tariff reduction will be based on the amount of electricity transmission systems to accommodate power purchase consumption. If the consumption does not exceed 90 units, from the Mai-khot thermal power plant project in Myanmar, the discount under the cost of living burden measure will namely : (1) the 230-kV border (in Chiang Rai Province) - be applied (calculated from the actual consumption but not Mae Chan electricity network system exploring zone, with a exceeding the remaining electricity tariff). If the consumption distance of about 30 km covering areas in Mae Sai, Chiang is more than 90 units, the flood discount will be applied to Saen and Mae Chan Districts in Chiengrai Province; and the remaining electricity tariff, but no more than 100 baht. (2) the 230-kV Mae Chan - Chiang Rai electricity network The OERC is instructed to inform the MEA system exploring zone, with a distanceof about 50 km and PEA to take further relevant action so that the two covering areas in Mae Chan District, Doi Luang Minor- PUs could adjust the program for printing electricity bills for district, Chiang Rung Minor-district, Wiang Chai District residential consumers to be completed in time for printing and Mueang Chiang Rai District in Chiang Rai Province. electricity bills for the month of January 2011. The announcement on electricity network system exploring 5. Approve the implementation following the zones shall be in effect for a period of two years as from NEPC resolution regarding Cost Adjustment on Sending the date of announcement. Contributions to the Power Development Fund for the 7. Approvethe appointment of the Committees on Electricity Generation Licensees, as follows: Land and Property Price for Chonburi and Chachoengsao 5.1 Approve, in principle, the revision approach Provinces to deal with the 4th natural gas transmission to the PPA between the EGAT and the existing power pipeline project (Rayong - KaengKhoi) of PTT, with the producers (RPCL and IPPs), and new power producers appointment of a licensee representative to act as Assistant (Cogeneration SPPs, with firm contracts, and Cogeneration Secretary to the provincial Committees on Land and SPPs, with non-firm contracts),that still have not included Property Price, and assign a licensee representative to serve the cost of sending contributions to the Power Development as Secretary to the district-level Working Groups on the Fund, as proposed by EGAT. That is, for IPPs, they will be Survey and Checking of Land and Property Prices, including divided into three types, i.e. IPPs from the 1994 bidding assigning the OERC to liaise with other related agencies,

the Energy Regulatory Commission & Office of the Energy Regulatory Commission 79 for submission to the Chairman of the Committee on Land 2.2 Approve the change of licensed item of and Property Price for consideration and appointment of the IRPC Public Company Limited, by expanding the installed concerned Committees on Land and Property Price, with capacity from 143.00 MW to 370.83 MW. the committee components as per the ERC Proclamation 2.3 Approve the issuance of electricity industry on Criteria for an Appointment and Execution Procedures operation licenses to an existing electricity industry operator of the Committee on Land and Property Price, B.E. 2552 that operates the business prior to the enforcement of the (2009), in each area, with no need to seek ERC approval Act as follows: one electricity generation license with a before each submission for appointment. This shall be total installed capacity of 187.03 MW and; one electricity practiced in dealing with energy network system areas for distribution system license. all energy network system licensees, starting with the 4th 2.4 Approve, in principle, the approach natural gas transmission pipeline project (Rayong – Kaeng for granting an energy industry operation license to Khoi) of PTT in the areas of Chonburi and Chachoengsao Kijroongruang Tapioca Factory Limited Partnership, and provinces. Thai Biogas Energy Company Limited (TBEC), according st to which TBEC and Kijroongruang Tapioca Factory Meeting No. 2/2011 (111 ) Limited Partnership will have to conduct the following : (1) 13 January 2011 Kijroongruang Tapioca Factory Limited Partnership must transfer its PPA to TBEC; and (2) TBEC must apply for 1. The ERC has considered the draft revised PPA a regulated energy production license (new application) and the draft additional amendment to the agreement, 2nd while Kijroongruang Tapioca Factory Limited Partnership revision, of SIAM Energy Co., Ltd. (the company), passed must request cancellation of its former regulated energy a resolution acknowledging the activities and approving production license – both have to be submitted for the PPA revision and the additional amendment to the consideration at the same time. When such requirements agreement, 2nd revision, pursuant to the resolution of EGAT have been done, the energy industry operation license will Board of Directors atthe latter’s meeting on 20 December be issued to TBEC. The OERC shall apply this principle of 2010, which complies with the framework of the NEPC energy industry operation license granting to TBEC to the resolution of 28 June 2010. EGAT is instructed to present granting of licenses to other similar cases. the mentioned draft revised PPA and draft additional 2.5 Acknowledge the objection to the issuance amendment to the agreement, 2nd revision, to the Office of of a power generation facility operation license to Bua the Attorney General to further check the draft PPA and Sommai Biomass Co., Ltd., and assign the OERC to take the draft agreement. In this regard, the ERC also approves further action on the objection according to the procedures the determination of expiry date of the approved EIA report of appeal deliberation. of the project to be on 1 December 2012, and views that 3. Approve the resolution of the Sub-committee EGAT, PTT and the company should accelerate negotiating Deliberating Complaints of Stakeholders in the Energy the amendment to the natural gas sales agreement (GSA) Industry, at its Meeting No. 2/2010 on 22 December 2010, with PTT for presentation to the PTT Board of Directors on the complaints about the MEA’s pole installation and for approval, and then submit the draft GSA to the Office wiring in the right-of-way of EGAT’s 230-kV transmission of Attorney General for further check. system, at the Bangkapi – South Bangkok section, across 2. Approve the issuance of energy industry the land of Mrs. Patcharin Tatpayak and Mrs. Sompong operation licenses and other related issues as follows: Saiyaithong, as follows: 2.1 Ten power generation facility operation 3.1 The OERC is tasked to inform the petitioners licenses with a total engine power of 98,030.99 HP; one regarding the MEA’s exercise of the rights of pole installation electricity generation license with a total installed capacity and wiring on the land underneath the EGAT’s 230-kV of 5.940 MW; six regulated energy production licenses as transmission system right-of-way, at the section from follows: (1) three regulated energy production licenses (new South Bangkok Terminal Station to Sukhumvit Road, that application) with a total generator rating of 225,065.00 kVA the MEA has already requested permission from EGAT (2) one regulated energy production license (renewal) with and that EGAT has got access to the mentioned areas a total generator rating of 13,000.00 kVA. (3) one regulated by virtue of the power indicated in the clarification of the energy production license (generating capacity expansion) Yanhee Electricity Authority regarding Exploration for Pole with a total generator rating of 11,250.00 kVA and; (4) Installation and Wiring of High Voltage Transmission Line one regulated energy production license (renewal and of the Yanhee Electricity Authority, No. 3. As for the MEA’s generating capacity expansion) renewal with a generator act, EGAT has conducted a survey and arranged for the rating of 2,300.00 kVA and generating capacity expansion safety zone right-of-way for the construction of the MEA with a generator rating of 350.00 kVA with a total generator transmission line, by exploring an additional distance of rating of 2,650.00 kVA. 5 meters from each side of the EGAT’s boundary. In this

80 Annual Report 2011 regard, the MEA has paid additional compensation through onshore natural gas transmission pipeline project, covering EGAT, and EGAT has paid the compensation to the owners a distance of about 225 km in the areas of Wang Noi, Bang or occupying personsof the property or the right holders at Sai, Bang Pa-in, Mueang Phra Nakhon Si Ayutthaya, Uthai, that time. The amount of compensation has included the Nakhon Luang, Bang Pahan, Maha Rat, and Bang Ban additional compensation that the MEA has already paidto Districts in Phra Nakhon Si Ayutthaya Province, Pa Mok, EGAT. In addition, examination of the transmission line Mueang Ang Thong, and Chaiyo Districts in Ang Thong system has been carried out by the MEA, and it is found Province, Phrom, Mueang Sing Buri, In Buri Districts in that the system is secure, strong and safe. Sing Buri Province, Tha Wung District in Lopburi Province, 3.2 The EGAT is instructed to inform the Sapphaya, Mueang Chai Nat Districts in Chai Nat Province, petitioners about the investigation of data and related and Phayuha Khiri, Krok Phra, Mueang Nakhon Sawan evidence, including the balance sheet on page 15 on Districts in Nakhon Sawan Province. demands for compensation, which reveals that the exercise 6. Approve the draft ERC proclamations on of EGAT’s rights by allowing the MEA to carry out pole recruitment of the general public sector representatives in installation and wiring along the mentioned transmission a community development committee in areas surrounding line, at the section of South Bangkok Terminal Station a power plant as follows: (1) Draft ERC Proclamationon - Sukhumvit Road, including the payment of additional Recruitment of the General Public Sector Representatives compensation for land used for poling and wiring of the in a Community Development Committee, B.E. ….; (2) MEA, that was made through EGAT, to be included in the Draft ERC Proclamation on Recruitment of the General compensation payment to the then land owners, have been Public Sector Representatives in a Tambon (Sub-district) correctly performed. Development Committee, B.E. …. Hearings on the draft 4. Approve the appointment of competent officials proclamations shall be arranged via the OERC website pursuant to Section 112 of the Act, as follows: during 13 - 31 January 2011. 4.1 Appoint Mr. Kawin Thangsupanich (Secretary th General) and Mr. Atiluck Attapich (Deputy Secretary General) Meeting No. 3/2011 (112 ) as competent officials for the granting of permission, as set 18 January 2011 forth in Section 112, Clause one, of the Act. 4.2 Appoint of Mr. Surasak Ruangchan (Director 1. Assign the OERC to study more information for of Land and Property Management Department), Mr. Prapas determining the appropriate β value for the calculation of Tammapala (Senior Professional of Land and Property WACC in the assumptions for the preparation of financial Management Department), Mr. Warapat Meelarp (Senior status estimates of the three Power Utilities in the period Professional of Land and Property Management Department), 2010-2011, which will be the information for considering the and Mr. Kijjar Limsaengchai (Senior Professional of Land revenue compensation (financial transfer) approach among and Property Management Department), as competent the PUs in the year 2011, for resubmission to the ERC for officials for the use of administrative measures under the consideration. law on administrative procedure as set forth in Section 112, 2. Approve the revision to the draft criteria for Clause three, of the Act. determining service charges for natural gas storage and Moreover, the ERC has an additional resolution transformation of liquid to gas, and the implementation that the OERC should propose staff members of the OERC plan for the criteria development. Accordingly, the OERC Regional Offices to be appointed as competent officials to is instructed to work on this matter in detail, in order to work jointly with the competent officials under Item 4.2. arrange a public hearing on the draft criteria, according to 5. Grant approval for PTT to issue the following the implementation plan. notifications on demarcation of natural gas network system 3. Approve that the Sub-committee Regulating exploration zones, which will be in force for two years as Energy Tariffs and Service Charges oversees the study from the date of notification : project on the natural gas transmission service charges. 5.1 Notification on demarcation of natural gas 4. Agree with the opinion of the Sub-committee network system exploring zone for the Nakhon Ratchasima Regulating Power Purchase from Small Power Producers onshore natural gas transmission pipeline project, covering and Very Small Power Producers at the latter’s Meeting a distance of about 150 km in the areas of Kaeng Khoi no. 1/2011 (9th) on 17 January 2011 regarding the Draft and Muak Lek Districts in Saraburi Province, and Pak PEA Proclamationon Adder Provision, following the NEPC Chong, Sikhiew, Sung Noen, Pak Thong Chai, Kham Thale resolution of 25 November 2010, that the PEA should So and Mueang Nakhon Ratchasima Districts in Nakhon consider revising the content of the mentioned draft Ratchasima Province. proclamation in order to make it clear that, in the case of 5.2 Notification on demarcation of natural gas solar power projects, the PEA has suspended acceptance network system exploring zone for the Nakhon Sawan of power sale applications, as per the NEPC resolution of the Energy Regulatory Commission & Office of the Energy Regulatory Commission 81 28 June 2010. When the revision is complete, the PEA capacity of 5.940 MW; five regulated energy production shall inform the ERC about the proclamation. This Draft licenses as follows: (1) two regulated energy production Proclamation on Adder Provision prepared by the PEA is licenses (new application) with a total generator rating of an addition to the Proclamation on Adder Provision dated 7,690.00 kVA; (2) two regulated energy production licenses 19 August 2009 to be in line with the NEPC resolution of 25 (renewal) with a total generator rating of 34,125.00 kVA; November 2010, according to which special adder rates are (3) one regulated energy production license (renewal and provided for projects in four districts in Songkhla Province, generating capacity expansion) renewal with a generator i.e. Chana, Thepha, Saba Yoi and Na Thawi Districts, rating of 28,007.50 kVA and generating capacity expansion which will be enforced on projects in the four districts, that with a generator rating of 26,000.00 kVA with a total have not yet received the notification of power purchase generator rating of 54,077.50 kVA. acceptance, including renewable energy projects wishing 3.2 Approve a significant change in licensed to sell electricity in the future. items of the TPI Polene Power Co., Ltd., by expanding 5. Acknowledge the outcome of the consideration of the installed capacity from 40.00 MW to 60.00 MW and applications and power sale proposals from Cogeneration add electricity industry operation licenses as follows: (1) SPPs, with firm contracts, pursuant to the 2010 solicitation electricity distribution system licenses and (2) electricity of power purchase, at an additional capacity of about 1,500 retail license. MW, and the determination of SCOD of the whole 3,500-MW 3.3 Approve, in principle, to require three more supply from SPPs.The Sub-Committee Regulating Power documents to be attached to the notification of energy Purchase from Small Power Producers and Very Small industry operations that are exempted from the energy Power Producers is tasked with the consideration of the industry operation licensing, i.e. (1) a factory operation matter, for further submission to the ERC. license, if considered as an industrial factory under the th Factory Act, B.E. 2535 (1992); (2) a PPA, in the case Meeting No. 4/2011 (113 ) where electricity is sold to electricity consumers or supplied 28 January 2011 to the MEA or PEA power network systems; and (3) a copy of licence for professional practice of the operation 1. Postpone deliberating the outcome of the and maintenance engineer (in accordance with the law consideration of applications and power sale proposals from on Engineers). This requirement shall be specified in the Cogeneration SPPs, with firm contracts, pursuant to the notification form, and the OERC is assigned to coordinate 2010 solicitation of power purchase, at an additional capacity with the MEA and PEA, to consider that the acceptance of about 1,500 MW, to wait for the deliberation result of SPP notice of the notification of energy industry operations that complaints about this matter, and assign the Sub-committee are exempted from the energy industry operation licensing on Deliberation of Problems Arising from Compliance is an important document for granting permission to the with Power Purchase Regulations and Power Purchase electricity retail business operators to connect the energy Agreements of Small Power Producers and Very Small network systems, as this will help monitor the energy Power Producers to handle the complaints. Accordingly, industry operation to be legitimate. the OERC is instructed to notify the Ministry of Energy and 3.4 Approve that an order be issued to Bang EGAT that the ERC is deliberating the complaints, and once Pakong Power Plant to take the same action as that the deliberation outcome is reached, the ERC will accelerate ordered by the Department of Industrial Works, that is, Bang further consideration of the outcome of the consideration of Pakong Power Plant shall prepare additional EIA Report, applications and power sale proposals from Cogeneration while immediate revocation of the energy industry operation SPPs, with firm contracts, pursuant to the 2010 solicitation license will be suspended; however, the following licensing of power purchase, at an additional capacity of about 1,500 conditions will be specified and will be considered as an MW. integral part of the license. 2. Instruct the OERC to explore the guidelines 3.4.1 Improvement is to be made to the for implementing the public policy on free electricity up to EIA report to completely comply with the Notification of the 90 units per month in order to comply with the guidelines Ministry of Natural Resources and Environment on Criteria, specified by law, and the OERC shall periodically report Procedures, Methods and Guidelines for Preparation of the the implementation progress to the ERC. Environmental Impact Assessment Report for Projects or 3. Approve the issuance of energy industry Activities Which May Seriously Affect the Community with operation licenses and other related issues as follows: respect to Quality of Environment, Natural Resources and 3.1 Six power generation facility operation Health, dated 29 December 2009, within 180 days as from licenses with a total engine power of 54,008.88 HP; the receipt date of a written notice. one electricity generation license with a total installed

82 Annual Report 2011 3.4.2 If the project fails to comply with Item by the 230-kV transmission network system area at the 3.4.1within the time period specified, the license will be cross-section of the 230-kV Nakhon Sawan – Bhumibol revoked. In case any project or activity cannot complete the Dam transmission line to Tak 2 Sub-Station, as follows: required implementation within the period specified in Item 6.1 Dismiss considering the issue of land 3.4.1, a written request for an extension of time shall be compensation appeal of the appellant because the appellant submitted, prior to the end of the 180-day deadline as per is not entitled to receive the compensation; therefore, he has Item 3.4.1, for a period of time in which the implementation no right to appeal, as stipulated by the ERC proclamation. is expected to complete; however, the cause of delay shall However, it is agreeable that EGAT considers providing not be due to the mistake of the project. assistance, as appropriate. 3.4.3 In the event that the project or activity 6.2 Consider the compensation appeal for trees has completed the EIA report improvement pursuant to Item ofthe appellant as he has the right to appeal, as stipulated 3.4.1, but the report is, by a final decision, turned down by by the ERC proclamation, by agreeing to increase the the Expert Review Committee, its license shall be deemed compensation price for coconut trees without fruit to 1,650 to be ineffective. baht per tree, and high-breed mango trees with fruits to 4. The ERC has considered the Draft ERC 4,770 baht per tree. Accordingly, EGAT is instructed to Regulationon Hearings, B.E. …., and instructed the OERC to pay the additional compensation to the appellant within 45 revise the draft for submission to the ERC for consideration. days as from the date of receipt of a written notice from 5. Approve the results of appeal deliberation on the OERC. If the compensation payment cannot be made compensation in relation to EGAT’s 230-kV Ratchaburi within the specified period of time, EGAT shall pay interest 3 - SamutSakhon 4 transmission line, as follows: to the appellant at the maximum fixed deposit interest rate 5.1 Dismiss considering appeals against land of the Government Saving Bank as from the date over compensation of two appellants because the appellants the specified period, until the additional compensation is have already received the compensation without reserving paid. For the other tree items, the compensation prices are the right to appeal; therefore, they are considered ineligible affirmed as prescribed, as they are considered appropriate to lodge an appeal, as stipulated by the ERC proclamation. and fair. 5.2 Pay land compensation to one appellant, 7. Grant approval for PTT to issue a notification according to the specified compensation price as the price on demarcation of natural gas network system exploring is considered reasonable and fair. zone for the Alpha Tech – Suwinthawong natural gas 5.3 Increase land compensation for two transmission pipeline project, in areas of Wang Takhian appellants to be in line with the judgment of the Supreme and Khlong Nakhon Nueang Khet Sub-districts, Mueang Administrative Court. For the issue that the appellant has Chachoengsao District in Chachoengsao Province, for a asked for compensation for land that is outside the electricity distance of approximately 2.25 km. Accordingly, PTT shall network system area, consideration is dismissed because prepare the mentioned notification, which will be in force the matter is beyond the ERC jurisdiction. However, the for two years as from the date of notification, and shall take OERC is instructed to refer the matter to EGAT to consider action in accordance with the provisions of Section 105 of according to the EGAT regulations. the Act and the criteria pursuant to the ERC Proclamation on 5.4 Increase land compensation for one Criteria of Exploring or Locating a Site for Energy Network appellant because the land location is adjacent to a public System, B.E. 2553 (2010). canal, hence the land has better potential than that without th access. Meeting No. 5/2011 (114 ) 5.5 Increase compensation for high-breed rose 3 February 2011 apple tree (Tubtim Chan) for two appellants and affirm the compensation price for high-breed mango trees for one 1. Acknowledge the existing facts and problems in appellant. relation to the operation of power generation using biomass Accordingly, EGAT is instructed to pay the as fuel, and instruct the OERC to conduct a study and additional compensation to the appellants within 45 days as prepare detailed implementation guidelines to troubleshoot from the date of receipt of the OERC’s written notice. If the the problems on biomass power generation, for presentation compensation payment cannot be made within the specified to the Sub-committee Regulating Power Purchase from period of time, EGAT shall pay interest to the appellants at SPPs and VSPPs for consideration, prior to presenting to the maximum fixed deposit interest rate of the Government the ERC for further consideration. Saving Bank as from the date over the specified period, 2. Approve the issuance of energy industry until the additional compensation is paid. operation licenses as follows: 6. Approve the results of appeal deliberationon 2.1 Two power generation facility operation compensation for land and trees of one appellant affected licenses with a total engine power of 38,540.48 HP; two the Energy Regulatory Commission & Office of the Energy Regulatory Commission 83 electricity generation license with a total installed capacity the license of the same type as that of PTT during the of 159.112 MW; eight regulated energy production licenses construction period, for enforcement up on the company as follows: (1) two regulated energy production licenses as well. (new application) with a total generator rating of 4,390.00 2. Approve the results of appeal deliberation on kVA; (2) four regulated energy production licenses (renewal) compensation in relation to the 230-kV transmission network with a total generator rating of 520,517.50 kVA and; (3) system area at the cross-section of the 230-kV Nakhon two regulated energy production licenses (generating Sawan – Bhumibol Dam transmission line to Tak 2 Sub- capacity expansion) with an expansion of generator rating Station, as follows: of 81,250.00 kVA. 2.1 Increase land compensation prices for two 2.2 Approve the issuance of electricity industry appellants to be in line with the judgment of the Supreme operation licenses to an existing electricity industry operator Administrative Court. that operates the business prior to the enforcement of the 2.2 Affirm the specified land compensation prices Act as follows: one electricity generation license with a total for two appellants, as the prices are reasonable and fair. installed capacity of 28.50 MW; one electricity distribution 2.3 Affirm the land compensation prices for two system license and; one electricity retail license. appellants, in the exploring land parcel no. A020, A022, 3. Approve, in principle, the approach to solve the A024 and A073, as the prices are reasonable and fair. For problems of electricity generation business operators about the exploring land parcel no. A021, is the compensation the sending of contributions to the Power Development shall be increased to 141,000 baht per rai, and for no. A069, Fund (the Fund) during the construction of a power plant, it shall be increased to 287,500 baht per rai, to be in line as follows: with the judgment of the Supreme Administrative Court. 3.1 For IPPs that have been selected from the 2.4 Dismiss considering the land compensation 2007 competitive bidding round, an ERC proclamation appeal of one appellant, because the appellant has no will be issued to provide additional instruction on sending right to receive the compensation and hence has no right contributions to the Fund for electricity generation business to appeal, as stipulated by the ERC proclamation. operators, of which the PPA conditions have indicated that 2.5 Dismiss considering the appeal issues of the contributions be sent tothe Community Development two appellants, asking for the payment for the land located Fund in the area around the power plant, that they shall outside the electricity network system area, because the send contributions to the Fund during the construction after matter is not within the ERC jurisdiction. However, the receiving an electricity generation license, following the OERCis instructed to refer the matter to EGAT to consider method to be notified by the OERC. according tothe EGAT regulations. 3.2 For SPPs and VSPPs having obtained the 2.6 Increase compensation prices for three tree construction licenses before the ERC Regulation on Power items to the appellants, i.e. (1) for coconut trees with fruits, Development Fund, B.E. 2553 (2010) took effect, the compensation is increasedto 3,300 baht per tree, and for contributions to the Fund during the power plant construction those without fruit, to1,650 baht per tree; (2) for high-breed shall be collected too. In such implementation, the NEPC mango trees with fruit, to 4,770 baht per tree, and for those policy on sending contributions to the Fund and the law without fruit, to 2,340 baht per tree; and (3) for fragrant enforcement up on those who obtained the construction coconut trees withfruit, to 5,000 baht per tree, and those licenses before 21 December 2010 shall be taken into without fruit, to 2,500 baht per tree. For the other 25 tree consideration. In the event that amendments are made to the items, the compensation prices are affirmed as prescribed, ERC Proclamation relating there to, reference to the license as the prices are appropriate and fair. For teak trees, the issuance by the OERC shall be made. In this regard, the compensation shall be paid to the appellants in accordance OERC is assigned to conduct a study and prepare detailed with the criteria set forth by the Royal Irrigation Department. recommendation for ERC consideration. However, if the calculated compensation price is lower than th the formerly offered one, the compensation payment shall Meeting No. 6/2011 (115 ) be based on the latter. 10 February 2011 Accordingly, EGAT is instructed to pay the additional compensation to the appellants within 45 days 1. Approve the issuance of the natural gas as from the date of receipt of the OERC’s written notice. transportation license through pipeline natural gas system If the compensation payment cannot be made within the to Saraburi B. Cogeneration Power Plant Co., Ltd. for the specified period of time, EGAT shall pay interest to the Natural Gas Transmission Pipeline Project to Industrial appellants at the maximum fixed deposit interest rate of Cogen Power Plant and Saraburi B. Cogeneration Power the Government Saving Bank as from the date over the Plant, with the addition of licensing conditionson to specified period, until the additional compensation is paid.

84 Annual Report 2011 th Meeting No. 7/2011 (116 ) bill printing will be fast and correct, which helps reduce 11 February 2011 errors in the consumption unit recording. In addition, major electricity consumers can conveniently and quickly check 1. Agree with the deliberation result of the complaint the information of power consumption by themselves in about the selection of power purchase from cogeneration order to improve operational efficiency of their entities. The SPPs pursuant to the 2010 SPP solicitation, lodged by Glow Meeting has the following observations for the PEA to take Energy Public Company Limited. The Meeting views that the further action : consideration of applications and power sale proposalsby 1.1.1 The PEA should prepare an overall EGAT has complied with the 2010 regulations for power investment plan in the power businesses for the ERC purchase from SPPs using cogeneration system, under firm to consider and provide opinions on various investment contracts, and the manual for consideration of applications projects under the plan. In the case where any investment and power sale proposals from SPPs, using cogeneration is beyond the plan approved by the Cabinet, the PEA should system, under firm contracts, as approved by the ERC, and present the updated plan to the ERC for consideration too. that the consideration is fair to all parties. Accordingly, 1.1.2 The PEA should prepare a EGAT is instructed to respond to the complaintof Glow comprehensive work plan together with the budget for AMR Energy Public Company Limited to clarify the matter. Also, system installation, to cover all major electricity consumers. a resolution is reached for EGAT to consider the approach In the next phase, the PEA may issue a regulation for new for power purchase and improving the power system to major electricity consumers to install an AMR system as a accommodate power procurement from power plant projects standard meter. that are ready to supply electricity to the system, which will 1.1.3 The PEA should promote and develop enhance the power system security in the areas with high the domestic production [of meters] to reduce costs and electricity demand. foster the long-term development of the AMR system in the 2. Approve the outcome of the consideration of country. This shall include the study on consumers’ energy applications and power sale proposals from SPPs, using consumption behavior after the AMR installation, whether cogeneration system, under firm contracts, pursuant to the their energy efficiency is increased, or the load management 2010 SPP solicitation, for an additional capacity of about is more appropriate; the data of which can be used in 1,500 MW, as presented by the Ministry of Energy, involving analyzing and planning other aspects of work, such as the a total of 17 projects with a total proposed sale capacity of promotion of technology to meet consumers’ power demand 1,530 MW, and acknowledge the SCOD of 39 SPPs, with (Demand Response), the extension of project application the proposed sale capacity to the grid at approximately 3,500 to cover other electricity consumer categories, the analysis MW. In addition, EGAT is instructed to notify the deliberation of future power demand, the assessment of the need for results to all applicants having offered to sell electricity. For more power station construction and the development of those who have obtained a power purchase acceptance power transmission lines, etc. notification, if the project SCOD is to be changed, EGAT 1.2 Provide support for the following hydropower reserves the right to reset the SCOD to comply with the projects : Klong Tron Dam, Kiu Kho Ma Dam and PDP 2010. For those who failed to be selected, EGAT shall downstream of the Chulabhorn Dam, because they can state the reasons for the consideration thereof. use the remaining potential of hydropower plants to th produce more electricity from renewable energy sources. Meeting No. 8/2011 (117 ) In this regard, EGAT will have to obtain permission for 23 February 2011 the implementation pursuant to relevant laws, including preparing preventive measures to mitigate impacts during 1. Approve the opinions on the following projects for the construction, and control measures to ensure the safety submission to the Minister of Energy for further presentation of the project construction. to the Cabinet for further consideration,whichis performed 3. Approve the issuance of energy industry in accordance with Section11 (5) of the Act : operation licenses and other related issues as follows: 1.1 Provide support for the PEA’s Automatic 3.1 Five power generation facility operation Meter Reading (AMR), Development Project, Phase 2, which licenses with a total engine power of 15,714.56 HP; three accounts for a total investment amount of 1,477.91 million electricity generation licenses with a total installed capacity baht, as it is an investment to support the development of of 9.662 MW; one regulated energy production license (new Smart Grid in the long term and increase the operational application) with a total generator rating of 2,430.00 kVA. efficiency of the PEA, which can save the operation time and 3.2 Delay considering the issuance of power reduce the cost of meter reading and checking. Moreover, generation facility operation for two applicants because they the recording of electricity consumption units and electricity have not yet been notified of power purchase acceptance

the Energy Regulatory Commission & Office of the Energy Regulatory Commission 85 by the PEA, which may affect their business operation the following conditions : (1) any SPP wishing to sign the feasibility in case the PEA can not accommodate power PPA before the EIA report approval shall place the power purchase from them. purchase application and proposal security (the proposal 3.3 Disapprove the licensing for power generation security) on the PPA signing date, which must be valid facility operation of one applicant since the project is located until the date the PPA takes effect and the proposal in the area prohibited by the Ministerial Regulation, No. security amount shall be double the amount specified 2, issued under the Factory Act (1992). Therefore, the in the Regulations. When the PPA becomes effective, a application for a license fails to comply with the specified PPA security shall be placed instead with EGAT before criteria. However, if the applicant wishes to appeal against the date of supplying electricity to the grid at the amount the ERC order, he can file an appeal within 30 days as from prescribed by the Regulations. In this connection, EGAT the date of receipt of the ERC order, pursuant to Section is assigned to determine suitable conditions and terms of 121 of the Act. security placement. The EIA report must be approved no 3.4 Approve the issuance of one electricity less than two years prior to the SCOD. If the EIA report generation license to a power industry operator under is not approved within the prescribed period, EGAT shall the sugar industry category, who has been operating the cancel the power purchase; and (2) the SPP is prohibited business prior tothe enforcement of the Energy Industry from changing the plant location. Act, with an installed capacity of 23.00 MW. 5.1.2 For SPPs of which the SCOD in 3.5 Approve the change in the item in essence the year 2018 or 2019 and which do not request PPA formerly licensed, by permitting Bangkok Solar Power signing before the EIA report approval, amendment to the Co., Ltd., to change the address of its business operation Regulations should be made to extend the time frame of facility from “No. 72 Moo 4, Sam Mueang Sub-district, PPA signing from originally within two years as from the Sida District, Nakhon Ratchasima Province” to “No. 72/1 date of EGAT’s notification of power purchase acceptance Moo 4, Sam Mueang Sub-district, Sida District, Nakhon to no less than two years before the SCOD, in order to Ratchasima Province,” with effectiveness in both the solve the problem of the validity period of the EIA report. electricity generation license and the regulated energy 5.2 EGAT shall revise the PPA model to comply production license. with the revised Regulations and submit it to the Office of 3.6 Approve the collection of annual energy the Attorney General to consider the PPA model before industry operation fees, for the year 2011, from the signing PPAs with the SPPs. agencies under Section 150 of the Act as follows: (1) 5.3 All EGAT’s undertaking here after in relation EGAT, by business type, including VAT, at a total amount of to the PPAs, such as the PPA drafting, the improvements 164,740,783.01 baht; (2) MEA, by business type, including on and/or changes to the PPAs, shall be undertaken in VAT, at 56,060,996.96 baht; (3) PEA, by business type, compliance with relevant Regulations, criteria, requirements including VAT, at 123,784,326.72 baht; and (4) PTT, by and Cabinet resolutions, and EGAT shall present the business type, including VAT, at 182,682,609.45 baht. matter to the Office ofthe Attorney General to consider 4. Acknowledge the hearing results on the Draft before proceeding with the next steps and shall notify the ERC Proclamation on the Recruitment of a Community implementation result to the ERC for acknowledgement. Development Committee, B.E. …., and the Draft ERC 6. Approve, in principle, the extension of the period Proclamationon the Recruitment of a Tambon (Sub-district) of time for sending contributions to the Power Development Development Committee, B.E. …., and approve both of the Fund, for electricity generation licensees supplying Draft ERC Proclamation; further process shall be undertaken electricityto the Power Utility systems. Such licensees are to have them published in the Government Gazette. allowed to send contributions to the Fund within 30 days as 5. Approve the process in response tothe proposed from the date following the completion of PPA amendment. relaxation in implementing the regulations for the purchase 7. Approve the criteria for determining designated of power from SPPs using cogeneration system, with firm areas of a Power Development Fund for activities pursuant contracts, as follows: to Section 97 (3) of the Act, as follows: 5.1 Approve that EGAT revises the Regulation 7.1 Approve the principles for determining for the Purchase of Power from SPPs, Using Cogeneration designated areas, as proposed by the OERC as follows: System, under firm contracts, B.E. 2553 (2010), (the 7.1.1 In the case of an electricity generation Regulations) to bean alternative for SPPs to consider licensee with the establishment of a Community Development prior to PPA signing with EGAT, according to the following Fund, as formerly required, and with energy generation over guidelines : 100 million kWh per year, the sub-districts in the inner 5.1.1 Amend the Regulations to allow area of the existing Community Development Fund shall EGATto sign PPAs with selected SPPs wishing to sign be considered as areas surrounding the power plant in the PPAs before obtaining approval of the EIA report, with the former radius of 5 km and shall be proclaimed as the

86 Annual Report 2011 designated areas, in order not to infringe on the rights of to the number of state representatives nominated by the citizens in the formerly designated inner area of the power Provincial Governor under Item 7.2.2. plant. In the case where the inner area of an existing 7.3 Approve the Draft OERC Proclamation on Community Development Fund was determined by village, Determination of Designated Areas, Categories of the Power the determination of designated areas shall cover the whole Development Fund Management in Designated Areas, and areas of the sub-districts to which those villages belong. Number of a Community Development Committee, B.E. …. 7.1.2 For other electricity generation 7.4 Approve the determination of designated licensees, the surrounding sub-districts in a radius of 1, areas and the number of CDC in the case of an electricity 3 or 5 km from the center of the power plants, pursuant generation licensee with the establishment of a Community to the ERC Regulation on the Power Development Fund Development Fund, as formerly required, and with energy for Development or Rehabilitation of Localities Affected by generation over 100 million kWh per year as follows: (1) Power Plant Operation, B.E. 2553 (2010) (Regulation), shall the total number of a CDC shall be odd number for the constitute the designated areas. In determining such areas, sake of voting of the CDC; (2) for a Category A Fund, the reference point of the power plant that is the center the number of CDC shall be as many as possible, to of pollution emission or causes impact on the community encourage participation of all concerned sectors in the Fund around the plant needs to be identified. administration; and (3) for a Category B Fund, the number 7.1.3 Where there is an overlapping area of CDC shall be moderate to be appropriate and fit the of the designated areas due to the proximity of the power amount of Fund allocated. The number of CDC members plants, following the Regulation, the implementation from each sector shall be determined. guidelines are as follows: (1) if the power plants are in th the same industrial estate, the designated areas shall Meeting No. 9/2011 (118 ) be combined; (2) if the power plants are located in the 24 February 2011 samesub-district, the designated areas shall be combined; (3) if the designated area of a power plant overlaps or is 1. Approve the issuance of energy industry licenses contiguous with the designated area of another power plant, and matters relating to licensing, which can be summarized and ifthe central points of the power plants are located in as follows: the overlapping designated area, the designated areas of 1.1 Issue one electricity generation license both power plants shall be combined together; and (4) if the to an existing electricity industry operator that operates designated area of a power plant overlaps the designated the business prior to the enforcement of the Act, with an area of another power plant, but the central points of the installed capacity of 6.00 MW. In addition, another resolution power plants are not located in the overlapping designated is passed to have the OERC prepare an implementation area, the OERC shallprep area recommendation to the ERC plan and methods to monitor and check the energy industry for consideration. licensees, for submission to the ERC for approval. 7.2 Approve the principles for determining the 1.2 Approve the change in the items in essence number of CDC members, as proposed by the OERC, that formerly licensed to the operators as follows: is : (1) the total number of a CDC shall be odd number 1.2.1 Change in the licensed items of Glow for the sake of voting of the CDC; (2) for a Category A Energy Public Company Limited as follows: (1) issue Fund, the number of CDC shall be as many as possible, an electricity generation license to Glow Energy Public to encourage participation of all concerned sectors in the Company Limited (Project 4, Phase 5), with an installed Fund administration; and (3) for a Category B Fund, the capacity of 382 MW; and (2) permit Glow Energy Public number of CDC shall be moderate to be appropriate and Company Limited to expand the power distribution system fit the amount of Fund allocated, and the determination of to distribute electricity to three new customers and to adjust/ CDC members from each sector shall be as follows: change the customers of its affiliated companies. 7.2.1 For the general public representatives, 1.2.2 Change in the licensed items of Infinite the number of representatives of each sub-district in the Green Co., Ltd., i.e. permitting the company to expand the designated areas shall be equal. installed capacity from formerly licensed 2.016 MW to 4.644 7.2.2 For the state representatives, this shall MW. include : (1) one representative from the OERC; (2) two 1.3 Approve the transfer of rights pursuant to representatives from the Ministry of Energy for a Category the electricity generation license of Kaset Thai Sugar Co, A Fund and one for a Category B Fund; (3) no less than Ltd. to Kaset Thai Sugar Industry Co, Ltd., effective from onestate representative nominated by the Provincial 1 March 2011, simultaneously with the regulated energy Governor. production license and other related contracts in the energy 7.2.3 For the number of qualified persons, industry operation of Kaset Thai Sugar Co, Ltd. If Kaset 1-3 persons shall be allowed, which is less than or equal Thai Sugar Industry Co, Ltd., wants to continue operating the Energy Regulatory Commission & Office of the Energy Regulatory Commission 87 the business after the expiration of the right following this Utilities as per the above-mentioned resolution, and propose license, the company shall act in accordance with the ERC to the ERC for consideration again. Regulation on Application for License and Permission for 5. Approve, in principle, that EGAT or those Energy Industry Operation B.E. 2551 (2008). registered as neutral agencies to carry out the measurement 1.4 Approve six regulated energy production of the performance index of primary energy utilization in the licenses as follows: (1) three regulated energy production generating process of combined electrical and heat energy licenses (new application) with a total generator rating of (PES), pursuant to the 2007 Regulations for the Purchase 67,360.00 kVA; (2) two regulated energy production licenses of Power from SPPs, Exclusively for the Generation Using (renewal) with a total generator rating of 53,906.00 kVA and; Cogeneration System, under Firm Contracts, (as revised (3) two regulated energy production licenses (generating in 2009), comprising : (1) Bright Management Consulting capacity expansion) with an expansion of generator rating Co., Ltd., (2) Direct Plan Co., Ltd., (3) Energy Research of 284,790 kVA. Institute, Chulalongkorn University, and (4) Arun Chaiseri 2. Acknowledge the resolution of the Managing Consulting Engineers Co., Ltd., to act as neutral agencies Committee on Power Generation from Renewable Energy to undertake the measurement of the heat energy ratio of Promotion (the Managing Committee) at its Meeting No. the use of supplementary fuel of the regulated renewable 1/2011 (6th) on 27 January 2011 regarding the guidelines power producers, based on the manual for reporting on for revoking PPAs of the generation from solar energy, supplementary fuelutilization in small power generation and assign the OERC to draft a detailed operation plan to systems using renewable energy. However, this is for a be used for monitoring the implementation of renewable temporary basis until the registration of neutral agencies energy projects that have requested Adder and to prepare to act in accordance with the Regulations for the Purchase the guidelines for regulating the power purchase from of Power from Small Power Producers, Exclusively for the renewable power producers undertaken by EGAT, MEA and Generation from Renewable Energy, B.E. 2550 (2007) (as PEA,which are energy industry licensees under the ERC. revised in 2009), is completed. Moreover, Dan Chang Bio- The Sub-committee Regulating Power Purchase from SPPs Energy Co., Ltd. and EGAT (contract parties) are instructed and VSPPs shall screen the plan and guidelines before to jointly select one of the mentioned neutral agencies to presenting to the ERC for consideration. further carry out the implementation as per the PPA terms. 3. Acknowledge the problem on power purchase In addition, the ERC has an additional resolution from biomass power producers, and instruct the OERC to ordering the OERC to expedite the development of examine the approach to amending the power purchase criteria for neutral agency procurement, to serve on regulations to help troubleshoot the power purchase from the the measurement of the heat energy ratio of the use of biomass power producers. Moreover, a letter shall be sent supplementary fuel and/or the PES measurement, pursuant to the Permanent Secretary of Energy and the Chairman of to the above-mentioned SPP Regulations, for submission the Managing Committee to explain the facts and problems to the ERC for approval. as well as provide suggestions regarding consideration th of power purchase from biomass power producers, i.e. Meeting No. 10/2011 (119 ) in screening the power purchase from biomass power 10 March 2011 producers using rice husk and wood chips, the Managing Committee should take into consideration, as a key factor, 1. Approve the issuance of energy industry the fuel supply potential of such power producers. However, operation licenses and other related issues as follows: the ERC will also revise the power purchase regulations to 1.1 Approve two power generation facility reduce such problems. operation licenses with a total engine power of 292,288.42 4. Approve the progress report on the deliberation HP; four electricity generation license with a total installed on the financial transfer among the Power Utilities in 2011 capacity of 13.212 MW; six regulated energy production and the assumptions used for the preparation of financial licenses as follows: (1) four regulated energy production status estimation for the year 2010-2011 of the three Power licenses (new application) with a total generator rating of Utilities, by giving consent to the Asset Beta of EGAT for the 482,210.00 kVA and; (2) two regulated energy production generation business at 0.61, and the transmission system licenses (renewal) with a total generator rating of 12,753.00 business at 0.49, and the Asset Beta of the distribution kVA; one electricity distribution system licenses and; one system businesses of the MEA and PEA at 0.30, as electricity retail license. proposed by the OERC. However, these values are to be 1.2 Approve one natural gas transportation used temporarily while the study on the new electricity tariff license through pipeline natural gas system under the structure is still ongoing, and the OERC shall calculate the project on natural gas transmission pipeline to Saraburi A revenue compensation among the Power Utilities in 2011, Cogeneration. based on the Beta value assumption of the three Power

88 Annual Report 2011 1.3 Approve the issuance of energy industry of liquid to gas, to be used for calculating the tariffs of natural operation licenses to an existing energy industry operator gas storage and transformation of liquid to gas licensees that operates the business prior to the enforcement of the th Act as follows: one electricity distribution system license Meeting No. 11/2011 (120 ) and; one electricity retail license. 18 March 2011 1.4 Allow of the PEA’s payment for the annual energy industry operation fees in the year 2011 into two 1. Approve the outcome of appeal deliberation installments as follows: 1st installmentat the amount of regarding an electricity network system area (network 30,946,082.04 baht (including VAT) by 18 March 2011, system area) and the objection to the locations of EGAT’s and 2nd installment at the amount of 92,838,244.68 baht pole installation, as opined by the Sub-committee on (including VAT) by 18 April 2011. Deliberation of Appeals on an Energy Network System Area, 1.5 Delay the issuance of a regulated energy at its Meetings No. 2/2010 on 6 August 2010; No. 3/2010 production license to Mama Development Co., Ltd., of on 30 November 2010; No. 4/2010 on 23 December 2010; which the biogas digester exploded, until the repair and and No. 1/2011 on 9 February 2011, as follows: improvement of the tapioca starch production plant and the 1.1 Confirm the judgment on the electricity biogas digester is completed to ensure their safety standards network system area related to eight appellants, because and readiness for operation. Accordingly, the company the announced network system area is deemed appropriate is instructed to take into consideration the results of the in terms of engineering and economic aspects, and the incident inspection in determining an approach to make the social and environmental impacts have also been taken improvement and in establishing the criteria for preventing into account. accidents and fire, as well as to review the maintenance 1.2 Adjust the network system area, following plan to enhance greater safety. the appeal of five appellants, to alleviate the impact on the In addition, the ERC has also passed are appellants and the adjacent land parcels. Moreover, the solution to have the OERC undertake a study whether network system area adjustment is feasible according to there are engineering criteria and conditions for biogas the engineering reasoning, and all of the landowners who digester construction or not, to be used as information for will be affected by the adjustment have given their consent, consideration by the ERC on the energy industry operation which is in line with the criteria for deliberating appeals on licensing. Moreover, in preparing such information for an energy network system area. licensing consideration, the information should be presented 1.3 Dismiss the appeal against the network chronologically and the analysis on project risk assessment system area of one appellant because the appeal was should be provided as well. not filed within 30 days after the date of receipt of written 2. Give consent to the comments on EGAT’s new notification from the licensee, pursuant to Section 9 of the transmission system interconnection project between Su- ERC Regulation on Criteria, Procedures and Conditions of ngai Kolok high-voltage substation and Rantau Panjang Lodging of Appeals and Appeals Deliberation, Objection high-voltage substation of Tenega Nasional Berhad Co., and Objection Deliberation B.E. 2552 (2009). Ltd., as provided by the Sub-committee Regulating Energy 1.4 Dispose of the appeals against the network Network Systems and Energy Network System Operator system area of two appellants out of the case-list of energy at its Meeting No. 1/2011 (14th) on 8 February 2011, by network system area appeals because the appellants have agreeing to support the project as it will enhance the security submitted to the ERC their written requests for appeal and efficiency of power supply in case of emergency or cancellation, causing the appeals to terminate, coupled terrorism, because power can be supplied to consumers with the fact that the appellants have already accepted the in Narathiwat Province from an additional supply source in compensation for the land covered the electricity network Malaysia, hence reducing power black-out in broad areas. system area. Accordingly, the OERCis ordered to conduct a hearing 1.5 Confirm the locations for installing six power process, following Section 79 of the Act, by publicizing poles, related to five appellants, because the determined the project operation information to explain the details, positions are deemed appropriate. operational steps and the rights of people living in the areas 1.6 Adjust the locations for installing three power covered by the transmission lines, via the OERC website poles, related to two appellants, as the location adjustment for at least 7 days, and submit the feedback to the ERC following the request of the appellants is feasible in the for consideration. engineering terms and will reduce the impact on land 3. Acknowledge the hearing results of the draft utilization by the appellants. criteria for calculating tariffs for natural gas storage and 1.7 Dismiss the objection deliberation on the transformation of liquid to gas and approve the criteria for pole location of one appellant, because the objection was determining tariffs for natural gas storage and transformation notfiled within 30 days as from the date of receipt of written the Energy Regulatory Commission & Office of the Energy Regulatory Commission 89 notification from the licensee, pursuant to Section 9 of the matter toEGAT for consideration, according to relevant ERC Regulation on Criteria, Procedures and Conditions of EGAT regulations. Lodging of Appeals and Appeals Deliberation, Objection 2.8 Increase the compensation for 706 eucalyptus and Objection Deliberation B.E. 2552 (2009). trees of one appellant, and adjust the height of the trees 1.8 Dispose of the objection to the locations for from initially less than 4 meters to 4 meters or higher, to pole installation of 25 appellants out of the case-list of energy be 250 baht per tree, and confirm the compensation price network system area appeals because the opponents have for lemon trees of another appellant at 5,000 baht per tree submitted to the ERC their written requests for objection because the price is reasonable and fair. cancellation, causing the objection to terminate, coupled 2.9 Instruct EGAT to pay the additional with the fact that the opponents have already accepted the compensation to the appellants within 45 days as from compensation for the land to be used for pole installation the date of receipt of the OERC’s written notice. If the and allowed EGAT to enter the land to carry out the pole compensation payment cannot be made within the specified installation. period of time, EGAT shall pay interest to the appellants at 2. Approve the outcome of deliberation on appeals the maximum fixed deposit interest rate of the Government for compensation regarding EGAT’s electricity network Saving Bank as from the date over the specified period, system, as opined by the Sub-committee on Deliberation until the additional compensation is paid. of Appeals for Compensation, at its Meeting No. 2/2011, 3. Approve the sending of contributions to the on 23 February 2011, as follows: Power Development Fund to be imposed on electricity 2.1 Confirm the determined prices for land generators, using waste heat from the production process compensation to be paid to two appellants because the of industrial or agricultural products as fuel, at a rate of 1 prices are reasonable and fair. satang per unit. The OERC shall coordinate with EPPO to 2.2 Confirm the determined prices for land propose the policy on sending contributions to the Power compensation for Survey Plots No. A055, A056, A057 Development Fund for waste heat fuel derived from the and A058 to be paid to one appellant because the price production process of industrial or agricultural products, is reasonable and fair. For Survey Plot No. A054 of the following the aforementioned resolution to the ERC. appellant, the price shall be increased and applied to the 4. Approve the issuance of energy industry whole plot of land at 60,000 baht per rai, to be in line with operation licenses and other related issues as follows: the judgment of the Supreme Administrative Court. 4.1 Approve two power generation facility 2.3 Confirm the determined price for operation licenses with a total engine power of 5,057.32 compensation for land to be used for pole location to be HP; three electricity generation licenses with a total installed paid to one appellant, because the price is reasonable and capacity of 5.874 MW; two regulated energy production fair, and instruct EGAT to pay the compensation for land licenses (new application) with a total generator rating of within the electricity network system area, but outside the 2,775.00 kVA. location of the power poles, at a rate of 65 percent of the 4.2 The OERC is instructed to accelerate the determined price to the appellant. study on the approach to promote Solar Rooftop to achieve 2.4 Increase the land compensation for Survey practical results. Plots No. E063 and E064 to one appellant, to 1,000,000 4.3 The National Power Plant Co., Ltd., is baht per rai, in order to comply with the criteria specified allowed to extend the implementation duration period to by the ERC. As for Survey Plots No. E061 and E062 of improve measures on environmental impact prevention, the appellant, the price is confirmed as it is reasonable and remedy and mitigation, as well as environmental quality fair. monitoring and inspection, in the points that failed to comply 2.5 Dismiss the land compensation appeals of with those specified in the EIA report of the 74-MW combined four appellants, as the appellants have already received cycle power plant project of the Advance Agro Public the compensation without reserving the right to appeal; Company Limited, for 3 more months, from previously 12 moreover, the appeals were lodged after the specified 30- months (by March 2011) to 15 months (by June 2011). The day period pursuant to the ERC regulation. company is required to inform the implementation results 2.6 Dispose of appeals filed by three appellants or progress of the improvement to the ERC on a monthly who have submitted written requests to cancel the appeals. basis. If the company can not complete the improvement 2.7 Dismiss the consideration of land price and as scheduled, it willbe deemed fit to propose to the ERC to demolishing expensefor residences outside the electricity revisitthe ERC resolution at the Meeting No. 8/2010 (82nd) network system area, and the issue on request for personal on 18 March 2010, on the suspension or revocation of the income tax payment based on the obtained compensation electricity industry operation license, under the electricity amount of three appellants, as they are not within the ERC generation license category, pursuant to Section 56 of the jurisdiction. However, the OERC is instructed to send the Act.

90 Annual Report 2011 5. Disapprove the issuance of power generation as Neutral Agencies to Measure the Heat Energy Ratio of facility operation for one applicant, as the plant location the Use of Supplementary Fuel and the Performance Index is inan inappropriate site, which violates the city planning of Primary Energy Utilization in the Generating Process codes, pursuant tothe Ministerial Regulation No.2 (1992), of Combined Electrical and Heat Energy (Primary Energy Item 4, issued under the Factory Act (1992). Saving : PES),” and instruct the OERC to proceed with the st announcement of the solicitation. Meeting No. 12/2011 (121 ) 1.3 In the case where a neutral agency can not 22 March 2011 be procured in time for the SCOD, or the scheduled date for the measurement of the heat energy ratio of the use Approve the requirement for preparation and of supplementary fuel, it is agreeable in principle to allow submission of information about energy industry operation the registrants as neutral agencies to measure the PES to be used for calculating electricity tariffs following the following the Regulations for the Purchase of Power from electricity tariff structure model under the project on “Study Small Power Producers, Exclusively for the Generation on Thailand Power Tariffs 2011-2015,” as follows: Using Cogeneration System, 2007 (as amended in 2009), 1. EGAT is required to submit the following with firm contracts, comprising : (1) Bright Management information to the OERC : (1) the information needed for the Consulting Co., Ltd., (2) Direction Plan Co., Ltd., (3) Energy Generation Charge Model; and (2) the information needed Research Institute, Chulalongkorn University, and (4) Arun for the Network Charge Model, consisting of the long run Chaiseri Consulting Engineers Co., Ltd., to temporarily act average incremental cost (LRAIC). as neutral agencies to carry out the measurement of the 2. The MEA and PEA is required to submit the heat energy ratio of the use of supplementary fuel until following information to the : (1) the information needed for the registration of neutral agencies to act according to the the Network Charge Model; and (2) the information needed Regulations for the Purchase of Power from Small Power for the Retail Charge Model. Producers, Exclusively for the Generation from Renewable nd Energy, 2007 (as amended in 2009), is completed. Meeting No. 13/2011 (122 ) 2. Acknowledge the complaint of J.P. Solar Power 25 March 2011 Co., Ltd. About the delay in PPA signing, and instruct the OERC to notify the company of the progress in the PEA 1. Acknowledge the methodology for determining implementation, that is, the PEA has already completed financial assumptions of the Power Utilities, to be used for checking the documents and readiness of the company to calculation under the new electricity tariff structure. operate the project to accompany the PPA signing and has 2. Acknowledge the progress report on the forwarded the information to the Secretary of the Managing implementation pursuant to the policy on free electricity for Committee for further action; presently, the PEA is waiting the public at 90 units per month. for the Managing Committee’s approval of PEA’s signing rd the PPA with the company. The OERC is also instructed to Meeting No. 14/2011 (123 ) inform the PEA to accelerate the matter as per the power 7 April 2011 purchase regulations, because the company has readiness, as specified by the relevant ERC resolution. 1. Approve the implementation to procure neutral 3. Acknowledge the hearing results on EGAT’s agencies to measure the heat energy ratio of the use of new transmission system interconnection project between supplementary fuel and the performance index of primary Su-ngai Kolok high-voltage substation and Rantau Panjang energy utilization in the generating process of combined high-voltage substation of Tenega Nasional Berhad Co., electrical and heat energy (Primary Energy Saving : PES) Ltd., and approve the opinions onthe project for submission (for SPPs using renewable energy, with firm contracts), as to the Minister of Energy for further presentation to the follows: Cabinet for further consideration, which is in accordance 1.1 Approve, in principle, to apply the criteria with Section 11(5) of the Act, that is, the ERC supports for neutral agency procurement to measure the PES value, the project implementation as it will increase the security which has undergone the process of public hearing and and efficiency of power supply in case of emergency, or approved by the ERC on 11 August 2010, to the preparation terrorism, because power can be supplied to consumers of an announcement for interested entities to enroll as PES in Narathiwat Province from an additional supply source in measurement neutral agencies, following the Manual for Malaysia, hence reducing power black-out in broad areas. Measuring Efficiency of the Combined Heat and Power Accordingly, EGAT shall report the plan and results of the System and Calculating the PES Ratio. operation to the ERC on aquarterly basis. When EGAT 1.2 Approve the draft OERC announcement on has obtained the Cabinet’s approval to implement the “General Solicitation for the Enrollment of Interested Entities project, EGAT is instructed to select the route or location the Energy Regulatory Commission & Office of the Energy Regulatory Commission 91 of the energy network system, and prepare a diagram Permission for Energy Industry Operation, by notifying the showing details of the direction and right-of-way boarder for OERC of the matter no less than 60 days before starting the constructing the energy network system, for submission to implementation, in order to get approval from the ERC; (2) the ERC for approval pursuant to Section 106 of the Act. the conditions attached to the PPA with Sanguan Wongse 4. Approve the result of the natural gas transmission Industries Co., Ltd. shall be strictly complied with, and if it service tariff calculation for the onshore natural gas is required to change the conditions attached to the PPA, transmission pipeline system at Chana (Zone 4), for charging prior approval from the ERC must be obtained before the service users as from May 2011 onwards, at 2.5659 baht change is made. per million BTU. This is divided into the fixed cost of 2.4855 th baht per million BTU and variable cost of 0.0804 baht per Meeting No. 15/2011 (124 ) million BTU. Accordingly, the implementationin accordance 18 April 2011 with Section 67 of the Act shall be conducted,by arranging a hearing via the OERC website for a period of about 2 Acknowledge the criteria clause for determining weeks. Thailand electricity tariff structure for the period 2011-2015. 5. Approve the issuance of energy industry th operation licenses and other related issues as follows: Meeting No. 16/2011 (125 ) 5.1 Approve seven power generation facility 20 April 2011 operation licenses with a total engine power of 10,791.50 HP; four electricity generation license with a total installed 1. Approve the approach to establishing the criteria capacity of 134.363 MW; six regulated energy production for determining Thailand electricity tariff structure, 2011- licenses as follows: (1) three regulated energy production 2015. licenses (new application) with a total generator rating of 2. Approve the reduction of electricity fee due to 61,823.00 kVA and; (2) two regulated energy production the Power Utilities’ investment that is lower than planned licenses (renewal) with a total generator rating of during 2008 – 2010, as follows: 2,041,332.00 kVA. 2.1 Approve the principles used for reduction of 5.2 Approve the issuance of electricity industry electricity fee due to the three Power Utilities’ investment that operation licenses to an existing electricity industry operator is lower than planned during 2008 – 2010, by calculating that operates the business prior to the enforcement of the from the actual operation costs and fines, including bringing Act as follows: two electricity generation licenses with a total the ROIC of the three Power Utilities that are higher than installed capacity of 13.40 MW; two electricity distribution the specified criteria to further cutdown the electricity fee,

system licenses and; two electricity retail licenses. according to the Ft adjustment formula. However, on the 5.3 The OERC is assigned to analyze the fuel issue of the use ofthe results calculated from the electricity supply sufficiency when presenting the data for consideration fee reduction resulting from the investment that is lower the of license granting for electricity generation from biomass, planned to calculate the rate of return from the operation of for the ERC consideration. the Power Utilities, it is deemed appropriate that the three 5.4 Approve the determination of conditions Power Utilities discuss the matter with the State Enterprise specifically of the electricity distribution system license and Policy Office (SEPO), Ministry of Finance. the electricity retail license for Korat Waste to Energy Co., 2.2 Approve the electricity fee reduction due to Ltd., as follows: the investment that is lower than the Power Utilities’ plans 5.4.1 The condition appended to the in the period 2008 – 2010, at a total amount of 9,500.00 electricity distribution system license is, “In the event that million baht. This is divided into 4,374.26 million baht from it is required to change the right-of-way boundary or route EGAT, 2,665.22 million baht from the MEA and 2,460.52 of the electricity network system that has been licensed, million baht from the PEA. the licensee shall comply with the ERC Regulation on 3. Approve the financial transfer, or revenue Application for License and Permission for Energy Industry compensation, among the Power Utilities in 2011 as follows: Operation, by notifying the OERC of the matter no less than 3.1 The financial transfer among the Power 60 days before starting the implementation, in order to get Utilities in 2011 is set at 13,379 million baht, according prior approval from the ERC.” to which EGAT and the MEA are required to deliver the 5.4.2 The conditions appended to the compensation to the PEA at 3,528 baht and 9,851 million electricity retail license are as follows: (1) in case it is baht, respectively. The financial transfer will be revised when required to change any item of the energy service users the actual operation outcome in 2011 is obtained and shall and details of the energy service contract, including service be incorporated into the financial transfer in the following tariffs that have been licensed, the licensee shall comply year. In this connection, EGAT and the MEA shall deliver with the ERC Regulation on Application for License and the financial transfer to the PEA on a monthly average basis

92 Annual Report 2011 through the Power Development Fund pursuant to Section 4.4 Give consent to the three Power Utilities 97 (1) of the Act. For the financial transfer of January-April to adjust the formula for calculating power purchasing 2011, it shall be delivered within May 2011. The practice prices for SPPs with non-firm contracts (except those using of such financial transfer shall be upheld until the practice cogeneration system) and VSPPs, to correspond with the guidelines under the new electricity tariff structure state facts and to be fair to all related sectors, especially electricity otherwise. consumers. This shall be done by removing EGAT’s cost 3.2 As the calculation of financial transfer under pass-through pursuant to the government policies, such as Item 3.1 results from the calculation of the estimated the sending of contributions to the Power Development Fund revenue and expense of the Power Utilities, the financial and the pass-through of Adder in the average electricity transfer in 2011 shall be revised, based on the difference fee according to the Ft formula for charging the MEA and between the estimated financial transfer in 2011 and the PEA (average wholesale Ft) before adding the burden of actual financial transfer in the year, following the CPI-X sending contributions to the Power development Fund of framework, taking into account there venue requirement each SPP with a non-firm contract and VSPP. of each Power Utility. If the difference is higher than the Accordingly, the OERC is assigned to coordinate revenue requirement of each Power Utility, it shall be a with the three Power Utilities to revise and amend related factor in calculating the Ft charge. regulations and proclamations, to be in line with the ERC 4. Approved the implementation following the ERC resolutions in Items 4.1-4.4, and present to the ERC for resolution regarding the adjustment of the cost incurred from consideration. sending contributions to the Power Development Fund of 4.5 On the part of EGAT, which has already electricity generation licensees as follows: proposed revision to the draft PPA model and the power 4.1 Acknowledge the progress of the purchase regulations, the following implementation shall be implementation following the ERC resolution regarding the undertaken : (1) consider revision to the draft PPA model adjustment of the cost incurred from sending contributions for IPPs that have not yet signed the PPAs to cover the to the Power Development Fund of electricity generation sending of contributions tothe Power Development Fund, licensees of the three Power Utilities. in accordance with the approach and criteria approved by 4.2 Approve the pass-through to the electricity the ERC; (2) revise the regulations for the purchase of charge, according to the Ft formula, the cost incurred from power from SPPs under firm contracts, exclusively for the sending contributions to the Power Development Fund generation from renewable energy, and the regulations of SPPs with non-firm contracts and VSPPs that have for the purchase of power from SPPs under non-firm submitted proposals to sell electricity since the enforcement contracts, which are currently in force, to reflect the burden date of the ERC Regulation on Power Development Fund of contribution sending to the Power development Fund; B.E. 2553 (2010) (21 December 2010), in the following and (3) calculate the expense on public service obligation cases : (1) those who have submitted proposals to sell following the government policy in the average wholesale electricity according to the power purchase regulations that Ft for use as a factor in calculating power purchasing prices have not yet taken into account the burden of the Power for non-firm contract SPPs, exclusively for the generation Development Fund, which are the same issues as those from renewable energy and VSPPs in each month. according to which other power producers had submitted 5. Approve the Draft Regulations for the Purchase their proposals before the aforementioned ERC Regulation of Power from SPPs Using Cogeneration System, under came into force; and (2 ) those who have submitted Firm Contracts, B.E. 2553 (2010) (as amended in 2011), proposals to sell electricity according to the power purchase as proposed by EGAT, and instruct EGAT, jointly with the regulations that have been amended on the part of the Distribution Utilities, to proceed with the announcement Power Development Fund burden. issuance according to the established procedures, and 4.3 Approve that the three Power Utilities are able acknowledge the draft PPA model as revised by EGAT in to adjust the power purchasing price from power producers accordance with the aforementioned Draft Regulations, and that have submitted proposals to sell electricity according instruct EGAT to revise the draft PPA model after having to the power purchase regulations since the enforcement obtained opinions from the Office of the Attorney General. date of the ERC Regulation on Power Development Fund However, such revision must not contradict the Regulations (2010), as per the amount of contributions sent to the Power as approved above, prior to utilizing it for contract signing Development Fund, exclusively for the amount of energy with the SPPs. supplied to the systems of Power Utilities, only in the case 6. Approve the deliberation results of the complaint that the cost burden on sending contributions to the Power lodged by Rinergy Co., Ltd., regarding the decision to refuse Development Fund has not yet been taken into account power purchase from the company, as follows: when determining the power purchasing price.

the Energy Regulatory Commission & Office of the Energy Regulatory Commission 93 6.1 Concur with the resolution of the Sub- should also be presented as evidential information for committee Deliberating Problems Arising from Compliance consideration. with the Power Purchase Regulations and Power Purchase 9. Approve the issuance of one power generation Agreements of SPPs and VSPPs at its Meeting No.4/2011 facility operation license, with engine power of 30,915.93 (5th) on 9 March 2011, that is, the ERC cannot consider the HP, and delay considering the power generation facility appeal against the notification of refusal to purchase power operation licensing for one applicant. Also, the OERC is from the company because, after consideration has been instructed to invite the management of the latter applicant made on the documentary evidence, it is found that the to provide details of fuel management, to be evidential company project is located in an area designated as Class information for ERC further consideration of license granting. 1A watershed, where, pursuant to the Cabinet resolution th of 12 July 1988, land utilization is prohibited in all cases. Meeting No. 17/2011 (126 ) Therefore, the company is unable to use such an area for 28 April 2011 the power project development. However, if the company has readiness in terms of the project location and still 1. Approve the deliberation on appeals against the intends to file a complaint and an appeal against EGAT’s electricity network system areas for the transmission system power purchase refusal, this can be done in accordance construction projects of EGAT, and the objection to pole with the provision of the Regulations for the Purchase of installation positions of the transmission system construction Power from SPPs, under Non-firm Contracts, B.E. 2550 projects and the transmission system development projects (2007) (as amended in 2009). of EGAT, as perthe resolutions of the Sub-committee on 6.2 Consider it appropriate that EGAT and Deliberation of Appeals on an Energy Network System Area, the PEA establish the inspection of the project location at its Meeting No. 2/2011(6th) on 11 April 2011 as follows: readiness and the permission for land use for the power 1.1 The outcome of deliberation on appeals project development, as one of the conditions in considering against the electricity network system areas for the power purchase from the applicants. This is to reduce transmission system construction projects, lodged by five the problems on finding corrective actions whena power appellants, as follows: (1) adjust the route of the electricity purchase acceptance has been notified, but the concerned network system area, as requested by one appellant, of project cannot be executed. the 230-kV Tha Tako - Chai Badan transmission system 7. The ERC has considered the increase in construction project, to alleviate the impact on the appellant registered capital of EGAT International Co., Ltd.,by a total and owners of the adjacent land parcels. Moreover, the amount of 17,000 million baht, to be used as operational network system route adjustment is feasible according costs in 2011 at 13,000 million baht and in 2012 at 4,000 to the engineering reasoning, and all of the landowners million baht, and views that this will not affect the current who will be affected by the adjustment have given their wholesale electricity tariff. However, in raising the capital for consent, in writing, which is in line with the criteria for appeal EGAT International Co., Ltd., EGAT shall take into account deliberation. Moreover, EGAT is instructed to prepare a the financial status and liquidity of EGAT to accommodate diagram showing detailed characteristics of the revised the investment in large-scale power plant construction in direction and network system area so that the OERC can the future, i.e. Wang Noi Power Plant, Block 4, and Chana proceed with the announcement of the network system area; Power Plant, Block 2, as well as the investment pursuant and (2) dispose of the appeals of four appellants out of the to the power transmission system development plan under appeal case-list because the appellants have submitted Thailand Power Development Plan, including the investment to the ERC their written requests for appeal cancellation, to accommodate the increasing power demand of the causing the appeals to terminate, regarding: 1) the 500-kV country in the future. Nan 2 -Mae Moh 3 transmission system project, involving 8. Appoint three EGAT staff members as the two appellants; and 2) the 500-kV Thai/Lao border (in Nan competent officials to implement the construction of the Province) – Nan 2 transmission system construction project, electricity network system, install poles, demolish buildings/ involving two appellants. structures, and cutdown trunks, branches or roots of trees 1.2 The outcome of deliberation on the objection in the 500-kV Nam Phong 2 – Udon Thani 3 electricity to the electricity pole installation positions, lodged by 18 network system area. Such competent official appointment appellants, as follows: (1) confirm the pole installation will be effective fora period of six months. However, if the positions for nine cases, because the determined positions specified period of time is over, but the duty execution of are deemed suitable, comprising: 1) the 11-kV Tha Wung the competent officials is not yet completed, the OERC shall - Lop Buri 1 transmission system improvement project, present the matter to the ERC to consider extending the involving one appellant (pole no. 81); 2) the 230-kV office term of those competent officials. In presenting the transmission system improvement project, linking Mae proposal for office term extension, the past performance Moh 3 Substation - Mae Moh 4 Substation - Lampang 1

94 Annual Report 2011 Substation - Lampoon 1 Substation - Lampoon 2 Substation, the impact on land utilization in the engineering terms, by involving three appellants (electricity pole no. 15, 293 coordinating with the appellant in setting up the operational and 364); 3) the 500-kV Nam Phong 2 – Udon Thani 3 plans of the two parties to be compatible.In addition, PTT transmission system development project, involving four is instructed to notify the appellant of the details of the appellants (pole no. 164, 165 and 169); and 4) the 230-kV compensation amount so that further appropriate action Phang Nga 2 - Phuket 3 transmission system improvement could be undertaken. Moreover, the OERC is instructed to project, involving one appellant (pole no.198A). notify the appellant that a request for permission to use the 1.3 Adjust the locations for pole installation for land within the petroleum transportation system area shall two appellants, as the location adjustment following the be submitted to the ERC, according to Section 112 of the opponents’ request is feasible in the engineering terms Act. and the adjustment has complied with the consideration 2.2 Dispose of the appeals of eight appellants criteria, namely : (1) the 230-kV Samut Sakhon 4 - (Samut out of the appeal deliberation case-list because the Sakhon 1) – Samut Sakhon 3 - Sam Phran 1 transmission petroleum transportation system area does not create any system improvement project, involving one appellant (the impact on land utilization of the appellants more than before, position of pole no.44 shall be moved straightly backward coupled with the fact that the appellants are explained of at a distance of about 47.00 meters from the previous the facts and hence no longer wish to pursue the appeal position); and (2) the 500-kV Nam Phong 2 – Udon Thani issues, thus causing the appeals to terminate. 3 transmission system improvement project, involving one 3. Delay the licensing consideration for one appellant (the position of pole no. 178 shall be moved applicant, applying for a power generation facility operation straightly backward at a distance of about 40.00 meters license, and instruct the OERC to examine additional facts, from the previous position). documents and information pertaining to the applicant’s 1.4 Dispose of the objection to the locations for request for change intechnology for solar power generation pole installation of seven appellants out of the objection from the solar thermal systemto the photovoltaic system, deliberation case-list, because the opponents have for submission to the ERC for further consideration. submitted to the ERC their written requests for objection 4. Approve the issuance of energy industry cancellation, causing the objection to terminate, coupled with operation licenses and other related issues as follows: the fact that the opponents have allowed EGAT to enter their 4.1 Approve three power generation facility land to carry out the pole installation, comprising: (1) the operation licenses with a total engine power of 403,223.83 230-kVRatchaburi 3 - SamutSakhon 4 transmission system HP; three electricity generation license with a total installed development project, involving two appellants (pole no. 25 capacity of 37.00 MW. and 113); (2) the 115-kV Phuket 3 - Phuket 1 transmission 4.2 Approve the permission to change the items system improvement project, involving one appellant (pole in essence formerly licensed, as follows: no.2); (3) the 11-kV ThaWung - Lop Buri 1 transmission 4.2.1 Approve that the OERC revises the system improvement project, involving one appellant (pole installed capacity of Bangkok Green Power Co., Ltd., from no. 113); (4) the 230-kV Krabi - Phang Nga transmission previously licensed 4.960 MW to 4.380 MW, and that of system improvement project, involving one appellant (pole Zenith Green Energy Co., Ltd., from 6.200 MW to 5.475 no.25); (5) the 115-kV ThaTako - Chai Badan transmission MW. This correction is in accordance with the current system improvement project, involving one appellant (pole method of the installed capacity calculation for electricity no.19); and (6) the 115-kV Phang Khon – Sakonnakorn 1 generation licensing, which is based on the generator with transmission system development project, involving one a low installed capacity. appellant (pole no. 120). 4.2.2 Approve the expansion of installed 2. Approve the deliberation on appeals against the capacity of Bangkok Green Power Co., Ltd.from 4.380 MW petroleum transportation pipeline system area (petroleum to 6.570 MW. transportation system) for laying natural gas pipelines 4.2.3 Approve the expansion of installed under the 4th Natural Gas Transmission Pipeline Project capacity of Zenith Green Energy Co., Ltd. from 5.475.MW (Rayong - KaengKhoi) of PTT, as per the resolutions of the to 8.760 MW Sub-committee on Deliberation of Appeals on an Energy 4.3 Approve the implementation pursuant to Network System Area, at its Meeting No. 2/2011 (6th) on Section 67, Clause 2, of the Constitution of the Kingdom 11 April 2011, as follows: of Thailand, B.E. 2550 (2007), as follows: 2.1 Confirm the petroleum transportation 4.3.1 Approve the qualifications of the system area, concerning one appellant, as the petroleum Committee on Public and Stakeholder Hearing. transportation system area is deemed suitable, and in order 4.3.2 Approve the approach to appointing to alleviate the trouble with the fish sauce industry factory the Committee on Public and Stakeholder Hearing, divided construction of the appellant, PTT is instructed to remedy into two steps as follows: (1) Step 1 : the OERC will open the Energy Regulatory Commission & Office of the Energy Regulatory Commission 95 for applications of individuals with expertise in various fields, established sufficient criteria for regulating and monitoring relevant to the nature of hearing implementation,to be the construction and operation of substations, and assign enrolled for recruitment as members of the Committee on the OERC to adopt the ERC comments to create correct Public and Stakeholder Hearing, through various channels knowledge and understanding of the general public about including : 1) sending invitation letters directly to eminent substations and to examine additional criteria for monitoring persons with expertize and qualification as prescribed; the construction and operation of substations to correspond 2) sending invitation letters to institutions/organizations with changing technologies. involved in the energy industry, environment, engineering, 7. Approve of the arrangement for identification card health and safety; and 3) publicizing the recruitment via the issuance for the Regional Energy Consumer Committee OERC website and posting the announcements at all of (RECC) members, by instructing the OERC to revise the the 13 OERC Regional Offices, to encourage submission draft OERC Proclamation on Identification Cards of the of applications together with evidential documents to the Regional Energy Consumer Committee, following the result OERC. In this regard, the OERC shall screen the applicants of ERC consideration. If any RECC members are retired based on the qualifications prescribed and announced by the government officials with pensionor former state officials, ERC to register their names with the OERC, with approval they will still be entitled to wear official uniforms or uniforms of the ERC; and (2) Step 2: when there is a thermal energy of other state agencies. Therefore, the RECC members project, that falls into the category of projects or activities should not be prohibited from using their photographs that may cause severe impact on the community in terms wearing official uniforms or uniforms of other state agencies of environmental quality, natural resources and health, when applying for the identification card. Consequently, applying for an energy industry operation license, the OERC Article 4 of the draft proclamation should be revised as shall select persons from those registered above, at the follows:”... with a 2.5 x 3 cm photograph, half-length, straight required number, for submission to the ERC for appointment face, wearing no hat or dark glasses, dressed in business for each project. attire or dressed modestly. ”When the revision is made, 4.3.3 Approve the list of institutions/ other necessary steps shall be taken. organizations to be invited to propose eminent persons to 8. Approve that the RECC can disburse remuneration be members of the Committee on Public and Stakeholder and other expenses, as proposed by the OERC, and Hearing, as proposed by the OERC, with a comment to approve the draft ERC Regulation on Disbursement of have Mahidol University added to the invitation list. Remuneration and Other Expenses for Duty Execution of 4.4 Approve that the OERC collectsthe annual the Regional Energy Consumer Committee (No. 2), B.E. energy industry operation fees from energy industry 2554 (2011), and instruct the OERC to proceed with other operation licensees, in the period before starting operation necessary steps, and also assign the OERC to consider at the full amount, equal to that collected in the period details of the provision of funeral allowance and travel during the energy industry operation. accident insurance for the RECC, for presentation to the 5. Approve the review of criteria for determining ERC for approval. designated areas of the Power Development Fund for th activities pursuant to Section 97( 3) of the Act, as follows: Meeting No. 18/2011 (127 ) (1) approve the determination of designated areas and 3 May 2011 category of the Fund management in the designated areas,

as proposed by the OERC; (2) approve the principle for 1. Approve the report on Ft factor calculation for Ft determining the number of members of a Community adjustment in the months of October 2010 - January 2011, Development Committee (CDC), as proposed by the OERC, according to the resolution of the Sub-committee Regulating and assign the OERC to consider issuing an announcement Energy Tariffs and Service Charges at its Meeting No. on the determination of the number of CDC members, 2/2011 (16th) on 29 April 2011. The accumulated difference

following the mentioned principle, as appropriate; and between the actual Ft [derived from calculation] and the (3) approve the draft Proclamation of the Office of the Ft charged (Accumulated Factor : AF) up to the month of Energy Regulatory Commission on the Determination of January 2011, which is 8.14 satangs per unit or a sum of Designated Areas, Category of the Management of Power 911.01 million baht, will be carried forward as the AF in Development Funds in Designated Areas, and the Number February 2011, at approximately 8.10 satangs per unit.

of the Community Development Committee Members under This data will be taken into account in considering the Ft the Power Development Fund ….. adjustment for the billing round of May-August 2011. 6. Agree that there is no need to issue specific 2. Approve the estimation of electricity fees

legislation to control the construction of substations according to the Ft formula for the billing round of May- because the ERC Regulation on Engineering Standards August 2011, as follows: in Energy Industry Operation, B.E. 2553 (2010), has

96 Annual Report 2011 2.1 Approve the result of Retail Ft calculation to deliberation to the affiliated companies, in compliance with be charged to electricity consumers in the round of May- the Regulations and related NEPC resolutions; (2) the August 2011, which is 100.66 satangs per unit, as presented affiliated companies shall be informed that the ERC has by EGAT. instructed the PEA to notify the deliberation result to them, 2.2 The investment cost that was lower than in compliance with the Regulations and related NEPC planned (claw-back) of the three Power Utilities in the period resolutions; (3) the three Power Utilities are instructed to 2008-2010, totaling 2,600.000 million baht shall be taken notify, in writing, those having submitted applications to sell to cut down the electricity fee, as per the Ft formula, in the power, who are still under consideration or who are awaiting round of May-August 2011, divided into 1,197.166 million PPA signing of the status of power purchase consideration baht from EGAT, 729.429 million baht from the MEA, and at various stages, including the stage of document checking 673.405 million baht from the PEA. for completeness, the deliberation results of the Power

2.3 Approve the Retail Ft configuration for the Utilities, the submission for approval of the issuance of charges from the electricity consumers in May-August 2011 power purchase acceptance notification and/or PPA signing, at 95.81 satangs per unit (excluding VAT), by separating and the outcome thereof, etc.; and (4) the PEA shall deliver, into the Ft for the generation business, transmission system to the ERC for acknowledgment, the information about the business and distribution system business at 102.33, -2.41 status of power purchase from VSPPs, by identifying the and -4.11 satangs per unit respectively. date of application submission, the date of power purchase

2.4 Approve the Wholesale Ft determination for acceptance notification and the Adder Rate received. charging to the MEA and PEA in the billing round of May- 5. Approve the approach to recruiting members of August 2011, at 95.09 and 94.81 satangs per unit (excluding the Regional Energy Consumer Committee (RECC) to fill VAT) respectively. the vacancy, as follows: 2.5 Approve the implementation pursuant to 5.1 Approve of the consideration of names on Section 67 of the Act, i.e. to have a hearing arranged on the reserve list of applicants to be recruited as member of the electricity tariffs in accordance with the Ft formula for RECC Region 12, representing Yala Province, consisting charging during May - August 2011, via the OERC website of (1) Mr. Nattakorn Jiarawet, (2) Mr. Nongkarn Taweewan, from 3 May 2011 to 10 May 2011 at 16:30 hrs. (3) Mr. Mahamamusueni Kaji, and (4) Mr. Prasit Thongsai, 3. Approve the issuance of energy industry to fill the vacant RECC post by drawing lots. operation licenses and other related issues as follows: 5.2 Approve the guidelines on assigning the 3.1 Approve three power generation facility OERC to determine the criteria and procedures for use in operation licenses with a total engine power of 15,564.57 lot drawing from the Yala Province reserve list to recruit HP; five regulated energy production licenses as follows: (1) an RECC memberto fill in the vacant post, by applying to one regulated energy production license (new application) the implementation Article 12 of the ERC Proclamation on with a total generator rating of 9,375 kVA; (2) two regulated Recruitment of the Regional Energy Consumer Committee energy production licenses (renewal) with a total generator B.E. 2553 (2010), which stipulates that he ERC Chairman rating of 223,695.00 kVA and; (3) two regulated energy shall have charge and control of the execution according production licenses (generating capacity expansion) with to this proclamation and shall make decision on problems an expansion of generator rating of 2,155 kVA. arising from compliance to this proclamation. Accordingly, 3.2 Approve the issuance of one electricity the ERC Chairman will grant approval for the OERC to generation license to an electricity industry operator under determine the criteria and procedures relating thereto. the sugar industry category, having operated the business 5.3 Assign the OERC Regional Office, Region prior to the enforcement of the Act, with an installed capacity 12 (Songkhla) to be responsible for the recruitment of an of 18.00 MW. RECC memberof Region 12, representing Yala Province, 4. Approve the deliberation result on the complaint to fill the vacancy. of the affiliated companies of Bangkok Solar Power Co., 6. Approve, in principle, the approach to protect Ltd., that the PEA has not notified the outcome of power energy consumers in Bueng Kan Province, as proposed purchase consideration according to the Regulations for by the OERC, as follows: (1) revise the ERC proclamation the Purchase of Power from VSPPs (Exclusively for the on Division of Energy Consumer Region, B.E. 2553 (2010), Generation from Renewable Energy), B.E.2549 (2006) (the by adding Bueng Kan Province tothe Energy Consumer Regulations), in accordance with the resolution of the Sub- Region 4 ; and (2) request the ERC Chairman authority, committee Considering Problems Arising from Compliance pursuant to Article 4 of the ERC Regulation on Criteria on with the Regulations and Power Purchase Agreements at Lodging, Receipt and Deliberation of Complaints of Energy its Meeting No.5/2011 (6th) on 29 April 2011, as follows: Consumers on Difficulties and Disputes between Energy (1) the PEA shall notify the outcome of power purchase Consumers and Licensees B.E. 2553 (2010), to assign the

the Energy Regulatory Commission & Office of the Energy Regulatory Commission 97 RECC Region 4 member, representing NongKhai Province, square wah; with the increase by one fold, in accordance to be responsible for conciliation to solve complaints of with the specified criteria, the compensation price for the energy consumers in Bueng Kan Province too. appellant’s land should be 6,000 baht per square wah. th However, PTT has set the compensation price at only Meeting No. 19/2011 (128 ) 2,400 baht per square wah, hence it has deviated from the 11 May 2011 specified criteria. 1.4 Dismiss the appeals of two appellants 1. Approve the outcome of compensation appeal because both of them have already received the deliberation regarding PTT’s natural gas network system compensation without reserving the right to appeal, coupled and EGAT’s electricity network systems, as opined by the with the fact that the appeals were filed beyond the period Sub-committee on Deliberation of Appeals for Compensation of 30 days as from the date of receipt of notification ofthe at its Meeting No. 3/2011on 18 March 2011, as follows: compensation amount, pursuant to the regulation prescribed 1.1 Confirm the land compensation price to be by the ERC. paid to five appellants because the price is based on the 1.5 Approve of cancellation of appeal of one cost estimate of land capital for the purpose of fee collection appellant as the appellant has submitted a written request for right and legal act registration of immovable property, to cancel the appeal, combined with the fact that EGAT has announced for use during 2008–2011, and adjustment has paid the compensation to the appellant; therefore, there is been made by increasing the mentioned cost estimate to no issue to be considered. be close to the normal purchasing prices in the market; 1.6 Dismiss the appeal deliberation of two the adjusted price is then used as the basis for calculation appellants because the issueis beyond the ERC jurisdiction, of compensation for land to the appellants. Moreover, no i.e. the appellants have requested compensation for the registered land purchasing prices of the appellants or in the impact on the land covered by the natural gas network nearby areas are found to be higher than the determined system area, and on the nearby land plots, including price. Therefore, the land compensation price to be paid payment for the opportunity cost of operating a housing to all of the 5 appellants is deemed reasonable and fair. business. 1.2 Increase the compensation price for land of 1.7 Increase compensation prices for three the appellant to be equal to the compensation price for the items of plants/trees of the appellant, including pineapple adjacent land, from 3,000 baht per square wah [1 wah2 = 4 plants, to 50,000 baht per rai [1,600m2]; guava trees, for m2) to 6,000 per square wah, pursuant to the appeal for land the costs of breeding trees and planting labor, at 30 baht compensation of one appellant, because the land adjacent per tree; jasmine plants, at 15 baht per plant. For the other to that of the appellant, that is covered by the natural gas three items of trees, the determined compensation prices network system area, has a prime location close to Highway are confirmed. Regarding the appeal issue of the number, 36 (Ban Chang - Rayong section), and has the same land type and size of trees of Mr. Dai Boonterm, that are covered utilization nature as that of the appellant. The frontage of by the electricity network system area, the compensation his land that is covered by the natural gas network system should be paid in accordance with the number and size is along the highway. In the year 2003, his land was also that the appellant, OERC and PTT officials have jointly covered by EGAT’s electricity network system area, and the examined and counted. determined price to be used as the basis for calculation of 1.8 Confirm the compensation prices for the land compensation is higher than the land compensation structures of two appellants because the criteria and price determined this time for the appellant. So, it is deemed compensation price fora structure, which comprises the appropriate that for adjacent land plots, with similar location costs of damaged materials, demolishment, removal, labor characteristics, the compensation price should be equally set. for new construction, contingencies, and related fees, 1.3 Increase the land compensation price for used as the basis for calculating the compensation for the one appellant, from 2,400 baht per square wah, as formerly appellants, are deemed reasonable and fair. determined by PTT, to 6,000 baht per square wah. This 1.9 Instruct PTT to pay the additional is due to the fact that the ERC has ordered that the cost compensation, following the ERC resolutions, to the estimate of land capital for the purpose of fee collection appellants within 45 days as from the date of receipt of the for right and legal act registration of immovable property, OERC’s written notice of the deliberation outcome of the announced for use during 2008-2011, be applied, and appeals for compensation. If the compensation payment adjustment is to made by increasing the mentioned cost cannot be made within the specified period of time, PTT estimate by one fold; then the latter shall be used as the shall pay interest to the appellants at the maximum fixed basis for calculating land compensation for the appellants. deposit interest rate of the Government Saving Bank as In this case, the Rayong Provincial Land Office has informed from the date over the specified period, until the additional that the cost estimate of the appellant’s land is 3,000 bahtper compensation is paid.

98 Annual Report 2011 2. Acknowledge the public hearing results on the the amendment to the draft PPAis completed, EGAT, being electricity tariff according to the Ft formula for the round of a state enterprise, is required to submit the draft revised May - August 2011, and approve the Retail Ft for charging PPAto the Office of the Attorney General to review and to electricity consumers in the billing round of May - August provide comments before signing it with the Company. 2011, at 95.81 satangs per unit (excluding VAT), divided 5.2 With regard to the consideration of draft into the Ft for the generation, transmission system and PPAs hereafter, the ERC will consider only whether a distribution system businesses at 102.33, -2.41 and -4.11 given draft PPA conform to the laws, policies, criteria and satangs per unit respectively. conditions specified, without going into details ofthe PPA, 3. Acknowledge the summarization of the Take-or- in order that the energy industry regulation will be fair in Pay interest burden allocation for the year 2010, and instruct accordance withthe state policy framework, pursuant to the OERC to adopt the approach to allocate the profit from Section 11 (4) of the Act. the Take-or-Pay, by returning at least 75.8 percent of the th profit to the people via electricity fee reduction because Meeting No. 20/2011 (129 ) the public have to bear the Take-or-Pay interest burden 24 May 2011 on the part that is the government’s responsibility, which is 75.8 percent of the overall interest burden, as guidance in 1. Order the OERC to revise the draft OERC Order consulting with concerned agencies to bring about practical on the Appointment of OERC Information Committee, outcome. following the ERC opinions, and then present it to the ERC 4. Approve the implementation of the Power for consideration again together with the draft on OERC Development Fund (the Fund) for activities pursuant to Regulation on OERC Information, B.E. ….. Section 97 (1) of the Act, with regard to the revenue 2. Approve of the resolution of the Sub-committee on compensation, among the Power Utilities, as follows: Deliberation of Final Decision, Orders, Regulations, Rules, 4.1 Acknowledge the implementation of the Fund Proclamations or any other Provisions of the Commission, at for activities pursuant to Section 97 (1) of the Act, with regard its Meeting No. 1/2011 (1st) on 12 April 2011, which confirms to the revenue compensation among the Power Utilities, the ERC order declining to issue a power generation facility and acknowledge the amount of contributions sent to the operation license to Thai Agency Engineering Co., Ltd., Fund and the amount of disbursement from the Fund foruse because the operation is against the law, pursuant to the as the revenue compensation among the Power Utilities in Ministerial Regulation (1992), issued under the Factory Act the year 2011, totaling 13,379 million baht. B.E. 2535 (1992). In this connection, the OERC is assigned 4.2 Approve the sending of contributions to to coordinate with concerned agencies to propose the the Fund and the disbursement of money from the Fund, revision and/or amendment to related laws to enable energy as presented by the OERC,to be used as the annual industry operation in areas that are deemed appropriate, operational plan of the Fund for activities pursuant to Section without being limited by other laws. In addition, the study 97 (1), and instruct the OERC to prepare the draft ERC on impact of energy industry operations (Regulatory Impact Order on Sending Contributions to the Power Development Assessment) shall also be undertaken. Such energy industry Fund for Revenue Compensation among the Power Utilities, operations include gasifier, solar, wind andcity gas in for the Year 2011 Implementation, for presenting to the ERC community areas and restricted areas, etc. Chairman for signature. 3. Approve the issuance of energy industry 5. Approve of the provision of legal comments on operation licenses and other related issues as follows: issues related to the PPA signing of National Power Supply 3.1 Approve seven regulated energy production Co., Ltd. (the Company), as follows: licenses as follows: (1) one regulated energy production 5.1 The contents of the draft PPA between license (new application) with a total generator rating of EGATand the Company, appended to the RFP which had 11,250 kVA; (2) four regulated energy production licenses been drafted before Section 67 of the Constitution of the (renewal) with a total generator rating of 335,945.54 Kingdom of Thailand B.E. 2550 (2007) came into force, kVA and; (3) two regulated energy production licenses do not cover the undertaking of EHIA, which is mandatory (generating capacity expansion) with an expansion of at present under Section 67 of the 2007 Constitution. generator rating of 7,225.00 kVA. Therefore, EGAT must negotiate with the contract party to 3.2 Approve a significant change in licensed amend the PPA to be correct and complete pursuant to the items as follows: (1) give consent to Charoen Sompong provisions of the changing law. The draft revised PPA shall Co., Ltd., to expand the installed capacity from 1.10 MW to cover the EHIA undertaking and shall come into force when 2.20 MW (2) give consent to Electricity Generating Public the EHIA is approved, including the determination of the Co., Ltd., to change an installed capacity from 1,246.60 dates of key operations to correspond with the operations MW to 1,258.96 MW. specified in the draft revised PPA. When the negotiation on the Energy Regulatory Commission & Office of the Energy Regulatory Commission 99 3.3 Acknowledge the issues regarding licensing term is less than 5 years, a 5-year license shall be granted, for power generation facility operation under the law on and it can be renewed. For new cases, the license term factory, as presented by the Working Group under the shall be 5 years and it can be renewed. Memorandum of Agreement between the ERC and the 3.5.2 License renewal shall be granted at a Ministry of Industry on the Guidelines for Permission of maximum term of 5 years at a time for all types of electricity Factory Establishment and Other Construction for the generation licensees that apply for license renewal, except Purpose of Energy Industry Operation. In this regard, the for the case where more investment is made in other forms, OERC is assigned to bring the issue regarding licensing such as repowering, for which it shallbe considered on a for power generation facility operation under the law on case by case basis. factories and the issue regarding permission granting under 3.5.3 For the application for extension of the laws relating there to, pursuant to Section 48 of the installed capacity from the previously licensed one, the Act, to discuss with the ERC to consider each issue again license term and expiration date shall be unchanged. When before consulting with The Office of the Council of State. the license expires, the renewal of the expanded installed 3.4 Approve the organization of a hearing capacity shall be equal to the remaining term of the PPA, seminar on the draft ERC Regulation on the Code of or not more than 5 years at a time. Practice (CoP) for Environmental Management for Electricity In the event that a licensee has obtained Business with an Installed Capacity Less than 10 MW, an electricity generation license with a term less than B.E.….(ERC Regulation on the CoP), Including : (1) Draft that prescribed under the criteria approved by the above Code of Practice for Environmental Management for resolution, when that licensee applies for license renewal, Electricity Business with an Installed Capacity Less than the OERC shall propose the license renewal in accordance 10 MW; (2) draft ERC Regulationon the Code of Practice with the criteria pursuant to the aforementioned resolution. for Environmental Management for Electricity Business with 4. Acknowledge the hearing results on the an Installed Capacity Less than 10 MW, B.E.….;This is to adjustment of natural gas transmission service charge, for comply with Section 26 of the Act. After the hearing seminar both the fixed cost and the variable cost of the onshore is over, the opinions and suggestions shall be considered natural gas transmission pipeline system at Chana (Zone in improving the draft ERC Regulation on the CoP for 4), and approve the determination of the natural gas submission to the ERC for approval, before arranging a transmission service charge of the onshore natural gas hearing from stakeholders and the general public via the transmission pipeline system at Chana (Zone 4) at 2.5659 OERC website, and then proceeding with necessary process baht per million BTU (excluding VAT), divided into the fixed to have the draft regulation publicized and enforced. cost at 2.4855 baht per million BTU and the variable cost 3.5 Approve the criteria for determining the term at 0.0804 baht per million BTU, to be charged to service of electricity industry operation licenses, as follows: users from June 2011 onwards. 3.5.1 Determination of the term of electricity 5. Approve the criteria for allocating the remaining generation licenses, in general, for electricity generation corporate expenditure budget of the Corporate Administration licensees : Group and the Development Group to the Generation Group (1) For electricity generation operators and the Transmission System Group [of EGAT] in the year that supply electricity to the energy network systems, under 2010, based on the Cost Driver basis, by allocating the the IPP and SPP (Firm) categories, the license term for remaining corporate expenditure budget of the Corporate existing cases shall be equal to the maximum remaining Administration Group and the Development Group to the term of the concession and the PPA. For new cases, the Generation Group from formerly 65.39 percent to 66.56 license term shall be equal to the PPA term. percent, and to the Transmission System Group from (2) For electricity generation operators formerly 34.61 percent of 33.44 percent. In the future, that supply electricity to the energy network systems, under EGAT is instructed to split the expenses by type of energy the SPP (Non-Firm) and VSPP categories, the license term industry licenses and deduct the corporate expenditure that for existing cases shall be equal to the maximum remaining is non-regulated before allocating the remaining corporate term of the concession and the PPA. If the remaining term expenditure budget. is less than 5 years, a 5-year license shall be granted, and th it can be renewed. For new cases, the license term shall Meeting No. 21/2011 (130 ) be10 years and it can be renewed. 2 June 2011 (3) For electricity generation operators that supply electricity only to electricity consumers who 1. Dismiss the petition of TRC Construction Public are not licensees or that use the electricity for their own Company Limited requesting EGAT to return the security, business, the license term for existing cases shall be equal at the amount of 20,000,000.00 baht, as opined by the Sub- to the remaining term of the concession. If the remaining committee Considering Problems Arising from Compliance

100 Annual Report 2011 with the Power Purchase Regulations and the PPA raised and a plus, by determining the discount rate to be equal by SPPs and VSPPs at its Meeting No. 5 (6th/2011) on 29 to the ROIC, i.e. 4.8 percent and 5.7 percent, and to add April 2011, because it is considered that EGAT has duly comments for the public hearing thatthe operation cost complied with the Regulations for the Purchase of Power of PEA should not be higher than that of a private power from Small Power Producers, Exclusively for the Generation producer. In this connection, in preparing an energy network Using Cogeneration System, B.E. 2550 (2007) (as amended system expansion plan in the future, competition should be in 2009) introduced in the provision of electricity to various islands 2. Give consent to the opinions on various projects or remote areas in the form of Distributed Generation. as provided by the Sub-committee Regulating Energy Accordingly, the OERC is assigned to conduct a hearing Network Systems and Energy Network System Operator process under Section 26 of the Act, by disseminating at the latter’s Meeting No. 2/2011 (15th) on 22 April 2011, information about project implementation, including project as follows: details, operational procedures and the rights of local people 2.1 Provides support for the PEA’s project on in areas covered by the power lines, via the OERC website the construction of submarine cable distribution systems for a period of at least 15 days and present the feedback to various islands (Kood Island and Mak Island in Trat to the ERC for further consideration. Province) because to the project will increase the security 2.2 Support EGAT’s main transmission system and reliability of power transmission and distribution expansion project to accommodate power purchase from systems; moreover, it will enhance adequate and efficient SPP cogeneration power plants, in accordance with EGAT’s power supply to accommodate the continuously increasing 2010 Regulations for the Purchase of Power because the demand, reduce problems of voltage drop, black out and project supports the government policy on the purchase loss in the electricity system, and can replace the use of of power generated from cogeneration system, which diesel for power generation. In this connection, during the promotes efficient power generation pursuant to Thailand construction period and after construction, the PEA shall Power Development Plan, 2010-2030 (PDP 2010).The take measures to prevent and correct the impacts, including project can also accommodate additional power purchase measures to monitor and inspect the impacts, and shall from renewable energy SPPs using wind energy in areas strictly take action according to the suggestions received with high wind energy potential. In this connection, EGAT from the public hearing. However, according to the PEA’s is required to report the plans and results of the operations IEE report, it is found that the route of submarine cables to the ERC on a quarterly basis. The OERC is assigned to passes through the marine area pursuant to the Master arrange a hearing process pursuant to Section 79 of the Act, Plan for Coral Reef Management of Thailand, as per the by disseminating information about project implementation Cabinet resolution of 3 March 1992; therefore, the PEA’s to provide project details, operational procedures and the implementation shall not contradict the Cabinet resolution. rights of local people in areas covered by the transmission In this connection, the PEA is required to officially report lines via the OERC website for a period of at least 7 days. the plans and results of the operations to the ERC on a Moreover, after approval is granted by the cabinet to carry quarterly basis. The OERC is assigned to arrange a hearing out the project and the route or location of the energy process pursuant to Section 79 of the Act, by disseminating network system is selected, EGAT, being an energy industry information to clarify the project details, procedures and operation licensee under the Act, will have to prepare a people’s rights via the OERC website for a period of at diagram showing detailed characteristics of the direction least 7 days. Moreover, after approval is granted by the and right-of-way boundaries for laying the energy network cabinet to carry out the project and the route or location of system, for submission to the ERC for approval under the energy network system is selected, the PEA, being an Section 106 of the Act. energy industry operation licensee under the Act, will have Accordingly, the OERC is assigned to conduct to prepare a diagram showing detailed characteristics of the a hearing process under Section 26 of the Act, by direction and right-of-way boundaries for laying the energy disseminating information about project implementation to network system for submission to the ERC for approval provide project details, operational procedures and the rights under Section 106 of the Act. When the ERC approval of local people in areas covered by the transmission lines, under Section 106 is obtained and the PEA has a definite via the OERC website for a period of at least 15 days and project investment capital, the tariff rates to be charged in present the feedback to the ERC for further consideration. areas on KoodIsland and Mak Island in Trat Province shall 3. Provide support for the following hydropower be proposed to the ERC for approval in compliance with projects : Klong Tron Dam, Kiu Kho Ma Dam and the Act. downstream of the Chulabhorn Dam, because they Moreover, the ERC has an additional resolution are power projects using renewable energy which are instructing the OERC to analyze special tariffs in case the included in Thailand Power Development Plan 2010-2030 financial internal rate of return (FIRR) of the project is zero (PDP 2010) and which can tap the remaining potential of the Energy Regulatory Commission & Office of the Energy Regulatory Commission 101 hydropower plants to efficiently increase the generating Phanom Province -- Unit 4: the land apart from Units 1-3, capacity and can strengthen the power system security. at 300,000 baht per rai. In addition, the investmentin these projects will have no 6.1.3 The 230-kV Nakhon Phanom 2 – impact on the tariffs under the current electricity tariff Nakhon Phanom Grid Connection Point transmission line structure. The ERC will regulate the project implementation area, At Samat Sub-district, Mueang Nakhon Phanom and will call back the investment money that has not been District, Nakhon Phanom Province, as follows: (1) Unit 2, utilized as planned, if any, to cut down the electricity fees. Zone 01, Block A: land adjacent to a road, lane or path, Furthermore, the ERC has an additional comment on the for a distance of 40 meters, at 200,000 baht per rai; (2) issue of compliance with related laws that, if the CoP is Unit 2, Zone 01, Block A: the land apart from Units 1-2, enforced, the projects shall take action accordingly. The at 200,000 baht per rai. OERC is assigned to present the aforementioned opinions 6.1.4 Compensation price for ALRO to the Minister of Energy for further presentation to the (SorPorKor) land : consent is given to the payment at a rate Cabinet for approval, pursuant to Section 11(5) of the Act. of 20 percent of the cost estimate for the purpose of fee 4. Delay the deliberation on issuing a power collection for registration of right and legal act, announced generation facility operation license to one applicant and for use during 2008-2011. instruct the OERC to provide and check more information, 6.2 Approve the use of the list of standard prices by inviting the PEAto presentthe facts, and then present for trees and agricultural products specified by the EGAT in the matter to the ERC for consideration again. the year 2008, and the newly revised list of standard prices 5. Appoint nine PTT staff members as competent (March 2011), by using the highest unit price of each list as officials under Section 122 (5) of the Act, empowered to carry the basis for tree compensation. For trees and agricultural out the construction of the natural gas network system, i.e. products that are not on EGAT’s list of standard prices, the 4th natural gas transmission pipeline project (Rayong – EGAT shall coordinate with concerned District Agricultural Kaeng Khoi), as well as demolish buildings/structures, cut Extension Officers to consider comparing them with the list down trunks, branches or roots of trees in the natural gas of standard prices for trees and agricultural products that network system areas in Rayong, Chonburi, Chachoengsao, EGAT uses as the basis for determining compensation for Prachinburi, Nakhon Nayok and Saraburi Provinces. The trees of similar types and species. mentioned competent official appointment will be effective 6.3 Approve the use of compensation prices for a period of six months as from the signing date of the for dismantling buildings and structures according to the appointment order. The OERC is instructed to draft the order EGAT list of standard prices, set up in the year 2008, and on the appointment of the aforesaid competent officials and the newly revised list of standard prices (March 2011), by present it to the Chairman of the ERC for a signature. using the highest unit price of each list as the basis for 6. Approve the compensation prices for land and calculating the compensation for dismantling buildings and property covered by EGAT’s 230-kV border (in Nakhon structures. Phanom Province) – Nakhon Phanom 2 transmission line 6.4 In the case where people have entered and area and 230-kV Nakhon Phanom 2 – Nakhon Phanom used state land, consent is given to payment of financial Grid Connection Point transmission line area, as follows: assistance for humanitarian reasons, based onthe cost 6.1 Approve the determination of compensation estimate for the purpose of fee collection for registration of prices for private land as follows: right and legal act, announced for use during 2008-2011, 6.1.1 The 230-kV border (in Nakhon Phanom and the payment shall be made according to the criteria Province) – Nakhon Phanom 2 transmission line area and specified by the ERC. the 230-kV Nakhon Phanom 2 – Nakhon Phanom Grid 7. Approve the outcome of deliberation on appeals Connection Point transmission line area, Woen Phra Bat for compensation for land covered by EGAT’s 500-kV Nam Sub-district, Tha Uthen District, Nakhon Phanom Province, Phong 2 – Udon Thani 3 transmission line, as follows: as follows: (1) Unit 1, Zone 08, Block A: land adjacent to 7.1 Determine land compensation prices for the National Highway No. 212 (Nakhon Phanom – Nong 11 appellants in the areas of Soephloe Sub-district, Khai), for a distance of 40 meters, at 500,000 baht per rai; Kumphawapi District, as follows: (1) for residential land (2) Unit 5, Zone 08, Block A: land adjacent to a road, path located within a distance of 40 meters from Ban Nong Na or lane, for a distance of 40 meters, at 32,000 baht per Kham - Ban Wang Na Pa rural highway, to adjust from rai; and (3) Unit 6, Zone 08, Block A: the land apart from the cost estimate at 220,000 per rai to the determined Units 1-5, at 300,000 baht per rai. compensation price at 605,000 baht per rai; (2) for 6.1.2 The 230-kV Nakhon Phanom 2 – residential land within a distance of 40 meters beyond the Nakhon Phanom Grid Connection Point transmission line initial distance of 40 meters from the Ban Nong Na Kham area, Ram Rat Sub-district, Tha Uthen District, Nakhon - Ban Wang Na Parural highway, to adjust from the cost

102 Annual Report 2011 estimate at 110,000 per rai to the determined compensation 2. Give consent to the recommendations of the price at 302,500 baht per rai; (3) for agricultural land area Sub-committee Regulating Energy Tariffs and Service within a distance 80 meters beyond the initial distance of Charges, as per the latter’s Meeting No. 3/2011 on 3 June 80 meters from the Ban Nong Na Kham - Ban Wang Na Pa 2011 regarding the Calculation Results of the Natural Gas rural highway, to adjust from the price set by the Committee Transmission Service Charge on the Part of Variable Costs on Land and Property Pricefor Udon Thani at 110,000 baht of the Offshore Natural Gas Transmission Pipeline Systemin per raito 290,400 baht per rai; and (4) for agricultural land Rayong (Zone1), the Offshore Natural Gas Transmission beyond the distance of 160 meters from the Ban Nong Na Pipeline System at Khanom (Zone 2), and the Onshore Kham - Ban Wang Na Pa rural highway to the end of the Natural Gas Transmission Pipeline System (Zone 3) for boundary of Soephloe Sub-district, Kumphawapi District, the year 2011, by approving the calculation results ofthe to adjust from the price set by the Committee on Land and natural gas transmission service charge on the part of Property Price for Udon Thani at 50,000 baht per rai to variable costs of the pipeline systems at a rate of 1.1575 132,000 baht per rai. baht per million BTU. The PTT is authorized to collect the 7.2 Confirm the land compensation prices to service charge at the above-mentioned rate as from June be paid to six appellants in Nong Pai Sub-district, Mueang 2011 onwards. In this regard, the OERC is instructed to Udon Thani District, as follows: for the land adjacent to arrange a hearing on this matter, pursuant to Section 26 aroad, lane or path at a distance of 40 meter, at 240,000 of the Act, via the OERC website for approximately two baht per rai and for the land beyond the initial 40 meters, weeks and submit the feedback of the hearing to the ERC at 132,000 baht per rai. for further consideration. 7.3 Instruct EGAT, jointly with the appellants, 3. Acknowledge the request for cooperation in to carry outfield surveys on the amount of land covered by the use ofnatural gas supply for Nam Phong power plant the electricity network system. Based on the field survey to help cushion the impact of NGV shortage in the north- outcome, EGAT shall calculate the compensation for the eastern region, and approve the implementation guidelines, surveyed amount of land to the appellants pursuant to the as proposed by the OERC, as follows: (1) to consider prices set forth. the ERC authority under the Act in association with the 7.4 Instruct EGAT to pay the appellants the implementation of such matter; (2) to study the impact costs for land fill that the appellants have already made to on the fuel supply security for power generation and the construct their residences, and to consider giving support impact on electricity tariffs, if other renewable fuels are for the cost of land outside the electricity network system used, as well as the issue of power generation efficiency area, according to prescribed EGAT’s regulations. of the power plant in the event that natural gas for power st generation is allocated for use in the transportation sector Meeting No. 22/2011 (131 ) to alleviate the NGV shortage;and (3) to determine whether 9 June 2011 or not any adjustment is to be made to the long-term natural gas procurement plan, pursuant to the NEPC resolution at 1. Approve, in principle, the implementation of its Meeting No. 2/2010 on 28 June 2010, and how, if the Thailand Demand Response Development Project, by change in the volume of gas allocation occurs and hence instructing the OERC to revise the details of project creating significant adverse impact on the long-term natural implementation according to the ERC’s comments, prior to gas procurement plan, and instruct the OERCto take action submission to the ERC for further consideration, as follows: along the aforementioned guidelines, with due consideration (1) to request opinions from the MEA and the PEA on the of the ERC’s comments on the matter. project implementation, then bring into consideration the 4. Approve the issuance of energy industry opinions obtained from both agencies, together with those operation licenses and other related issues as follows: from the Ministry of Energy and EGAT, when improving the 4.1 Approve two regulated energy production scope of work under the project to make it comprehensive licenses (generating capacity expansion) with an expansion and clearer; (2) to review the outcome of former EGAT’s of generator rating of 10,750.00 kVA. study on this subjectto examine the key to success factors, 4.2 Approve one electricity generation license problems, obstacles and suggestions in order to update the to an existing electricity operator under the sugar industry scope of work to cover such issues; (3) to clearly divide the category, which operates the business prior to the project duration into phases, by specifying the outcome of enforcement of the Act, with a total installed capacity of each phase as well as the goal as to how to make practical 25.00 MW. use of the study outcome; and (4) to prepare a detailed 4.3 Permit the merger of PTT Aromatics and operating budget for each phase so that the ERC could Refining Public Company Limited and PTT Chemical consider the budget for the project implementation. Public Company Limited, and approve the guidelines on

the Energy Regulatory Commission & Office of the Energy Regulatory Commission 103 the issuance of related licenses, which involve regulated adjustment of electricity tariffs according to the Ft formula, energy production licenses and electricity industry operation Item 3, to be as follows: “3. Approve the Wholesale Ft for licenses, totaling four licenses, namely : (1) two electricity charging to the MEA and PEA in the billing round of May- generation licenses, (2) one electricity distribution system August 2011 at 95.09 and 94.81 satangs per unit (excluding

license, and (3) one electricity retail license, so that the VAT) respectively. Accordingly, the Wholesale Ft in May- newly established company from the merger of the two August 2011 of the MEA and PEA will be increased by companies could consider taking further action, whether to 182,357,250.00 baht, and 168,351,250.00 baht per month request change in the licensee’s name to the name of the respectively.” newly established company, or to submit a new application 8. The OERC is instructed to consult with the for the required licenses. Department of Energy Business, Ministry of Energy, to 5. Approve the revision to the draft PPA Model for finalize and provide clarity to the implementation guidelines SPPs Using Cogeneration System, 2010 (revised in 2011) regarding the draft Ministerial Regulation on Natural in the case where the PPA signing takes place before the Gas Transportation through Pipelines Systems, the draft EIA report is approved. In this regard, the ERC has noted licensing of Natural Gas Transportation through Pipeline the revised draft PPA Model for SPPs Using Cogeneration Systems, and the draft Ministerial Regulation on Public System, with Firm Contracts, 2010 (revised in 2011) that the Hearingson Natural Gas Transportation through Pipeline Office of the Attorney General has examined, and agree to Systems. the observations made by the Office of the Attorney General 9. Approve the assumptions used for preparing the in correcting and examining the draft PPA model, as follows: electricity tariff proposal, as follows: 5.1 The text of the draft PPA model shall not 9.1 The ROIC in the preparation of electricity contradict or conflict with the Regulations for the Purchase of tariffs for use over the period 2011-2012 should be the same Power from Cogeneration SPPs, with Firm Contracts, 2010 as that used under the criteria for calculating the revenue (as amended in 2011) (the Regulations). If any text of the compensation (financial transfer) among the Power Utilities draft PPA model contradict or conflict with the Regulations, it for the year 2011, i.e. the ROIC for EGAT is 7.5 percent, shall be amended to be in compliance with the Regulations. and that for both the MEA and PEA is 5.73 percent. After 5.2 For any text of the draft PPA model that that, consideration shall be made to adjust the criteria to has been added toor is beyond what is specified in the be suitable and correspond with changing situations. Regulations, EGAT shall take the ERC observations into 9.2 In estimating the operating expenses (OPEX) consideration when revising the draft PPA model. In making per unit, the average actual OPEX in the past six years the observations, the ERC has basically adhered to the (2005-2010) shall be applied. In this regard, the items used principles of fairness and balance of the contract parties. for calculating the OPEX shall be considered to ensure 5.3 For any text that is not specified in the draft appropriateness and equity. PPA model, but is specifiedin the Regulations, the text in 9.3 As for the capital expenses (CAPEX), the the Regulations shall prevail. investment plans of the Power Utilities, as approved by the 6. Approve the land and property prices used for Office of the National Economic and Social Development calculating compensation in connection with the 4th natural Board for the period 2011-2015, shall be applied. gas transmission pipeline project (Rayong - KaengKhoi), as 9.4 For the estimate of electricity demand by follows: (1) in Chonburi Province area, consent is given to voltage level, the estimate of power purchase units and the resolution of the Committee on Land and Property Price power purchasing prices separated by voltage level shall for Chonburi Province at its Meeting No. 1/2011 on 16 March be applied, using the actual ratios occurred in the previous 2011; and (2) in Chachoengsao Province area, consent year. is given to the resolution of the Committee on Land and 9.5 The revenue compensation shall be Property Price for Chachoengsao Province at its Meeting calculated at a rate per unit. The amount of compensation No. 1/2011on 15 March 2011. However, because the list of will be adjusted according to the actual purchase/sale units standard prices for trees and agricultural products, and the taken place. list of buildingand structure removals have been updated nd by EGAT in 2008, which came into force around the end Meeting No. 23/2011 (132 ) of March 2011 (i.e. after the meetings of the Committees 23 June 2011 on Land and Property Price), it is deemed fit to use the highest unit price of each list as the basis for calculating 1. Approve the issuance of energy industry the compensation. operation licenses and other related issues as follows: 7. Approve the revision of the ERC resolution at the 1.1 Approve the cancellation of the addition of a MeetingNo. 19/2011 (128th) on 11 May 2011 regarding the condition attached to the power generation facility operation

104 Annual Report 2011 license of Vithai Biopower Company Limited (the Company), 1.1 Approve the 115-kV Tha Wung - Lop Buri on the issue requiring that the Company shall be able to 1 transmission system routes, involving three sections as use Vithai grass as fuel for power generation only when follows: Vithai grass species has been tested and certified by the 1.1.1 First section : passing under the 115- Department of Agriculture, following a former ERC resolution kV Ang Thong 2 - Lopburi 2 and the 230-kV Tha Tako at the Meeting No. 18/2011 (127th) on 3 May 2011, regarding – Tha Lan 3, transmission system, from Km 1+283.00 to the issuance of a power generation facility operation license Km 1+996.00, covering a distance of about 713 meters, in (Vithai Biopower Limited). Bang Khu Sub-district, Tha Wung District, Lopburi Province. 1.2 Approve one power generation facility 1.1.2 Second section : passing under the operation license with a total engine power of 30,915.93 500-kV Tha Tako-Nong Chok transmission system, from Km HP; one electricity generation license with a total installed 3+700.00 to Km 3955.00, covering a distance of about 255 capacity of 2.040 MW. meters, in Pho Talat Kaeo Sub-district, Tha Wung District, 2. Approve the results of service tariff calculation Lopburi Province. for natural gas storage and transformation of liquid to gas, 1.1.3 Third section : passing under the 500- i.e. the fixed-cost part (Demand Charge : Td) at 31.6859 kV Tha Tako-Wang Noi, from 4+898.00 to Km 5+168.00, baht per million BTU, and the variable-cost part (Commodity covering a distance of about 270 meters, in Bang Khan Mak Charge : Tc) at 1.7050 baht per million BTU, with a condition Sub-district, Mueang Lopburi District, Lopburi Province. that the regulatory approach to the natural gas storage By designating the additional safety zone and transformation of liquid to gas business operation is for electric power transmission from originally 9 meters on applied, particularly the regulation on the investment plan, each side to 12 meters on each side from the center of the fixed operation costs and licensees’ data inspection. The transmission towers (making a total of 24 meters in width licensees shall submit a performance report on finance and both sides). accounting, operations and standards to the OERC on an 1.2 Approve the 230-kV Krabi–Phang-nga 2 annual basis, and the regulatory approaches in the future transmission system routes, involving three sections, in (On-going Regulation) shall be developed, following the Nuea Khlong Sub-district, Nuea Khlong District and Krabi opinions of the Sub-committee Regulating Energy Tariffs Noi Sub-district, Mueang Krabi District, Krabi Province, as and Service Charges, at its Meeting No. 4/2011(18th) on follows: 10 June 2011. Accordingly, the OERC is instructed to take 1.2.1 First section : from Km 10+605.00 to action pursuant to Section 67 of the Act, by arranging a Km 11+643.19,covering a distance of approximately 1.04 hearing on the service charges for natural gas storage and km, by expanding the electricity network system area from transformation of liquid to gasto be charged to service users the center of the transmission towers for another 15 meters as from July 2011 onwards, via the OERC website for a from originally 25 meters on each side, making a total of period of about two weeks. 80 meters in width both sides. 3. Acknowledge EGAT’s and PTT’s reports on the 1.2.2 Second section : from Km 11+643.19 situation and impacts resulting from the reduction of natural to Km 17+169.93 coveringa distance of 5.53 km, by gas supply from the Yetagun gas field, and, because this expanding the electricity network system area from the incident is a matter of natural gas shortage, not that of center of the transmission towers only on the right side occasional power shortage, in which EGAT is empowered to (the left sideis adjacent to the airport area) for another oversee the electricity system to ensure the system security, 15 meters from originally 25 meters, making a total of 80 pursuant to Section 87 of the Act. Therefore, EGAT shall meters in width both sides. consider resolving the problem first and urgently report 1.2.3 Third section : from Km 17+169.93 to the implementation result to the ERC. For the PTT, as a Km 17+237.42, covering a distance of about 0.07 km,by supplier and wholesaler of natural gas, in the interest of expanding the electricity network system area from the the national security, shall take action pursuant to Section center of the transmission towers for another 15 meters 57, Clause two, of the Act by determining the methods from originally 25 meters on each side, making a total of to increase natural gas production and supply volume to 80 meters in width both sides. resolve the problem first; the result of its implementation 1.3 Approve the 500-kV Nam Phong 2 – shall be urgently reported to the ERC as well. Udon Thani 3 transmission system route (revised rd section linking Nam Phong 2 Substation), covering a Meeting No. 24/2011 (133 ) distance of approximately 300 meters, In Khok Sung 30 June 2011 Sub-district, Ubolratana District, Khon Kaen Province, including designating the safety zone for electric power 1. Approve seven electricity network systems of transmission at 30 meters on each side from the center EGAT, as follows: of the transmission towers (making a total of 60 meters in the Energy Regulatory Commission & Office of the Energy Regulatory Commission 105 width both sides). the project proposal, as follows: (1) approve the issuance 1.4 Approve the 230-kV Sikhiew 2 – Nakhon of an electricity generation license to Ratchaburi Energy Ratchasima 3 transmission system route, with a distance Co., Ltd., (Branch 1), with an installed capacity of 1.95 of about 39 kilometers passing through the following areas MW, the license issuance dated 3 December 2009, and the in Nakhon Ratchasima Province : (1) Sung Noen District: license validity with former rights there to up to 2 December Makluea Kao Sub-district, Sung Noen Sub-district, Nong 2019; (2) approve the issuance of an electricity generation Takai Sub-district; and (2) Pak Thong Chai District:Takhu license to Ratchaburi Energy Co., Ltd., (Branch 2), with an Sub-district, Pak Thong Chai Nuea Sub-district, Khok Thai installed capacity of 0.974 MW, the license issuance dated Sub-district, by designating the safety zone for electric power 28 September 2010, and the license validity with former transmission at 20 meters on each side from the center rights there to up to 2 December 2019; and (3) approve of the transmission towers (making a totalof 40 meters in the amendment to the name of regulated energy production width both sides). licensee of Ratchaburi Energy Co., Ltd., in both licenses. 1.5 Approve the 230-kV transmission system 2.2.2 Grant approval for Saraburi A route, at the cross-section of the 230-kV Lamtakong – Cogeneration Co., Ltd. to changeits name to “Gulf JPTLC Nakhon Ratchasima 2 transmission system to Sikhiew 2 Co., Ltd.” Substation, with a distance of approximately 4 kilometers 2.2.3 Grant approval for Saraburi B passing through Makluea Kao Sub-district and Makluea Cogeneration Co., Ltd. to change its name to “Gulf JP KP Mai Sub-district in Sung Noen District, Nakhon Ratchasima 1 Co., Ltd.,” and for Industrial Cogen Co., Ltd. to change province, by designating the safety zone for electric power its name to “Gulf JP KP 2 Co., Ltd. “according to the terms transmission at 20 meters on each side from the center and proposal of the Project on Natural Gas Transmission of the transmission towers (making a total of 40 meters in Pipeline to the Industrial Cogen power plant and Saraburi width both sides). B. Cogeneration power plant. 1.6 Approve the 115-kV transmission system 2.3 Permit Glow Energy Public Company Limited route, linking Sikhiew 2 (Line 1) -115-kV NakhonRatchasima to buy all shares of Thai National Power Co., Ltd. 2–Sikhiew grid connection point, with a distance of about 3. Acknowledge the information presentation to 360 meters, passing through Makluea Kao Sub-district, amend the PPA and the Coal Purchase Agreement of BLCP Sung Noen District in Nakhon Ratchasima province, and Power Co., Ltd., and view that the coal price adjustment designate the safety zone for electric power transmission at of the company is a matter that the contract parties have 12 meters on each side from the center of the transmission to act in compliance with the processset forth in the PPA towers (making a total of 24 meters in width both sides). terms; therefore, in the first place, it is deemed appropriate 1.7 Approve the 115-kV transmission system to inform the contract parties to negotiate with each other route, linking Sikhiew 2 (Line 2) -115-kV Nakhon Ratchasima according to the procedures and conditions set forth in 2 -Sikhiew grid connection point, with a distance of about the PPA.In this connection, EGAT, as the contract party 400 meters, passing through Makluea Kao Sub-district, of the company and a state agency, should consider the Sung Noen District in Nakhon Ratchasima province, and company’s proposal by taking into account the public interest designate the safety zone for electric power transmission at and the power system security. With regard to the request 12 meters on each side from the center of the transmission for the ERC to consider amending the PPA and the Coal towers (making a total of 24 meters in width both sides). Purchase Agreement of the company, the ERC should 2. Approve the issuance of energy industry check the ERC authority and duty under the Act whether it operation licenses and other related issues as follows: is empowered to do so. If it is in the affirmative, the criteria 2.1 Approve three power generation facility and conditions together with the essence for consideration operation license with a total engine power of 125,423.44 should be specified. HP; one electricity generation license with a total installed 4. Delay the deliberation on the appointment of the capacity of 5.000 MW; four regulated energy production Committee Investigating Facts on the Leakage of Offshore licenses as follows: (1) two regulated energy production Natural Gas Transmission Pipeline, Line 1, and order the licenses (new application) with a total generator rating of OERC to send a written notice to the PTT to provide all 8,865.00 kVA and; (2) two regulated energy production relevant facts and details of the matter to the OERC, and licenses (renewal) with a total generator rating of 392,055.00 instruct the OERC to settle the matter within one month. kVA. th 2.2 Approve the change in the items in essence Meeting No. 25/2011 (134 ) formerly licensed to the operators as follows: 5 July 2011 2.2.1 Permit Ratchaburi Energy Co., Ltd., to split it selectricity generation license, and to have the 1. Acknowledge the hearing results on the natural regulated energy production license amended, according to gas transmission service tariff adjustment on the part of

106 Annual Report 2011 the variable cost of the Offshore Natural Gas Transmission request to cancel the appeal after the amount of pineapple Pipeline System in Rayong (Zone 1), the Offshore Natural cultivation land has been examined and explanation has Gas Transmission Pipeline System at Khanom (Zone 2), been received from the PTT officials. Therefore, there is and the Onshore Natural Gas Transmission Pipeline System no issue to be considered following the appeal lodged by (Zone 3) for the year 2011; and also approve the natural the appellant. gas transmission service tariff on the part of the variable 5.2 Dismiss the appeals of two appellants cost of the Offshore Natural Gas Transmission Pipeline because the appeals were lodged beyond the 30-day System in Rayong (Zone 1), the Offshore Natural Gas period as from the date of receipt of the notification of the Transmission Pipeline System at Khanom (Zone 2), and compensation amount. the Onshore Natural Gas Transmission Pipeline System 5.3 Confirm the land compensation prices to be (Zone 3) for the year 2011, at a rate of 1.1575 per million paid to 15 appellants because the determined compensation BTU. Accordingly, the PTT is authorized to collect the tariff pricesto be paid to the appellants are deemed reasonable at the mentioned rate from July 2011 onwards. and fair, as the land of the appellants has been covered In addition, the ERC has an additional resolution once by the electricity network system area of EGAT, thus that the OERC shall carry out public relations to inform making the land prices decrease from those in the past, and electricity consumers of the facts about the trend of the Ft hence the prices of land compensation for the appellants rate in the next round, and also prepare PR information of cannot be equal to those once paid by EGAT. related matters forthe ERC to use as information for press 5.4 Confirm the land compensation price for the conference or related agencies. title deed No. 776 of the appellant, which is determined at 2. Approve the determination of Thailand electricity 400,000 baht per rai, because the price is reasonable and tariff structure for the period 2011-2015, as follows: fair, and increase that for the title deed No. 24232 from 2.1 Approve Thailand electricity tariff structure 200,000 baht per rai to 400,000 baht per rai since the land for the period 2011-2015. is located adjacent to the former piece of land, with the

2.2 Approve the Ft base adjustment to be at same usage of land, i.e. pineapple cultivation, hence the 0.9581 baht per unit, by increasing the charge in the retail land compensation price for both title deeds should be the electricity tariff. same. 2.3 Approve the use of part of the claw-back, or 5.5 Increase the land compensation price for money from the investment that was lower than planned one appellant to 300,000 baht per rai in order to be close of the three Power Utilities, in the years 2008-2010 to all to the normal market price, because the appellant’s land eviate the electricity tariff burden of electricity consumers, has a frontage along Highway No. 3191 (Map Kha – Pluak through the reduction of Ft at 0.06 baht per unit, for the Daeng), which is a well asphalted 4-lane highway. billingin the months of July-August 2011. 5.6 Dismiss the deliberation on appeals of two 2.4 Approved the documents to be used for the appellants, asking for compensation for the land outside hearing on Thailand electricity tariff structure for the period the natural gas network system area and for the use of 2011-2015. ownership extent, as such issuesare beyond the ERC 2.5 Approve the organization of the hearing jurisdiction. on the matter via the OERC website for a period of about 5.7 Consider the tree/plant compensation prices one week and assign the Office to proceed with the determined by the ERC to be paid to the appellants as implementation. follows. 3. Approve the issuance of two electricity generation 5.7.1 Compensation for pineapple plants–in licenses with a total installed capacity of 6.20 MW. 2007, EGAT used to pay compensation for pineapple plants 4. Approve the revision of energy consumers to the appellants whose land were covered by the 500-kV regions to cover Bueng Kan Province and approve the draft transmission system area, linking Pluak Daeng –500-kV ERC Proclamation on Division of Energy Consumer Region Nong Chok grid connection - Wang Noi, Line 2, in Rayong (No. 2), 2011. Province, at a rate of 50,000 baht per rai. Therefore, EGAT’s 5. Approve the deliberation on appeals for rate of compensation for pineapple plants should be applied compensation for land and property covered by the natural to determination of compensation to the appellants. Hence, gas transmission system area under the 4th Natural Gas the compensation for pineapple plants will be increased Transmission System Project (Rayong – Kaeng Khoi) of from the previously determined price at 39,200 baht per the PTT, pursuant to the deliberation results of the Sub- rai to 50,000 baht per rai. committee on Deliberation of Appeals for Compensation at 5.7.2 Increase the compensation price for its Meeting No. 4/2011 (8th) on 20 April 2012, as follows: guava trees, for the costs of breeding trees and growing 5.1 Agree to one appellant’s request to cancel labor, at 30 baht per tree as the appellant grows guava his appeal because the appellant has submitted a written only within the natural gas network system area, by the Energy Regulatory Commission & Office of the Energy Regulatory Commission 107 growinga large number guava trees in between the rows 7.1 Approve 151 drafts of OERC proclamations of pineapple growing, which is not in line with agricultural on the determination of designated areas, the management principles that would yield a good crop, but such growing category of Power Development Fund in designated areas, characteristic is in expectations for compensation. The and the number of Community Development Committee criteria for compensation payment, which specifies that (CDC) members, as proposed by the OERC, except for that payment be made only for breeding trees, at a maximum of Chana Power Development Fund, Songkhla Province. of 400 trees per rai in the case of full plot planting, and at In the latter case, the OERC is instructed to revise the a maximum of 200 trees in the case of planting together designated areas of the Fund to cover all 14 Sub-districts with other agricultural crops, are deemed reasonable and in Chana District, and the number of the CDC members, fair. However, the cost of guava planting labor should also representing the general public sector shall be 21 persons, be paid at 5 baht per tree. comprising two representatives from each sub-district in the 5.7.3 Confirm the compensation price for inner area, comprising : Ban Na, Pa Ching, Num Wah, Cha cultivated banana (“namwaa” variety), as the price is Nong, Khlong Pia, Na Thap and Taling Chan Sub-districts, reasonable and fair. and one representative from each sub-district in the outer 5.8 The PTT is instructed to pay the additional area, comprising: Khun Tat Wai, Ku, Kae, Tha Mo Sai, compensation to the appellants within 45 days as from Nam Khao, Sakom and Saphan Mai Kaen Sub-districts. the date of receipt of the OERC’s written notice on the Accordingly, the OERC is instructed to take necessary outcome of deliberation on appeals for compensation. If steps to issue the proclamations. the compensation payment cannot be made within the 7.2 Approve the approach to determining specified period of time, the PTT shall pay interest to the designated areas for the case of hydropower plants, as appellants at the maximum fixed deposit interest rate of proposed by the OERC, according to which the established the Government Saving Bank as from the date over the Power Development Funds will be of the Management specified period, until the additional compensation is paid. Category B, with a total of 11 Funds. The sub-district areas 6. Approve the approach to recruiting members of outside the radius of 5 kilometers, which were considered as the Regional Energy Consumer Committee (RECC) to fill designated areas under the former Community Development the vacancy as follows: Fund as they are affected by the operation of the power 6.1 Approve of the consideration of names on plant, shall be taken into consideration. However, this does the reserve list of applicants to be recruited as member of not include the residential areas or productive pieces of land RECC Region 3, representing Sing Buri Province, consisting that state agencies or electricity generation operators have of (1) Mr. Payao Ruengpong, (2) Mrs. Pornwan Buddhalee, allocated to accommodate those who had to be relocated and (3) Mr. Metha Yadee to fill the vacant RECC post by from their residential areas or productive land due to the drawing lots., power plant construction and that are outside the province 6.2 Approve the guidelines on assigning the where the power plant is located. OERC to determine the criteria and procedures for use in th lot drawing from the Sing Buri Province reserve list to recruit Meeting No. 26/2011 (135 ) an RECC member to fill in the vacant post, by applying to 13 July 2011 the implementation Article 12 of the ERC Proclamation on Recruitment of the Regional Energy Consumer Committee 1. Approve the outcome of appeal deliberation B.E. 2553 (2010), which stipulates that the ERC Chairman regarding electricity network system areas and the objection shall have charge and control of the execution according tothe locations of EGAT’s pole installation, as opined by the to this proclamation and shall make decision on problems Sub-Committee on Deliberation of Appeals on an Energy arising from compliance to this proclamation. Accordingly, Network System Area,at itsMeeting No. 3/2011 on 27 June the ERC Chairman will grant approval for the OERC to 2011, as follows. determine the criteria and procedures relating thereto. 1.1 Confirm the announced electricity network 6.3 Assigned the OERC Regional Office, Region system areas which concern four appellants, as follows: 3 (Nakhon Sawan) to be responsible for the recruitment (1) the 115-kV Nong Bua Lamphu-Loei transmission line, of an RECC member of Region 3, representing Sing Buri concerning one appellant (Survey Plot No. A017); and (2) Province, to fill the vacancy. the 500-kV Nan 2 - Mae Moh 3 transmission line, concerning 7. Approve the proclamation on the determination three appellants (Survey Plots No. F001, F002 and F003) of designated areas, the management category of Power because the network system areas are deemed appropriate Development Fund in designated areas, and the number in terms of engineering, economic, social and environmental of Community Development Committee (CDC) members, aspects, coupled with the fact that the landowners who as follows: will be affected by the network system area adjustment

108 Annual Report 2011 do not consent tothe adjustment. According to the appeal opponents’properties, and, in addition, it is the operation deliberation criteria, all landowners who will be affected by that is undertaken without undue appropriateness. the network system area adjustmentmust give their consent 3. Approve the issuance of energy industry in writing. operation licenses and other related issues as follows: 1.2 Dispose of the appeals against the network 3.1 Approve four power generation facility system area of two appellants out of the case-list of energy operation licenses with a total engine power of 4,876.84 network system area appeals because one appellant HP; four regulated energy production licenses as follows: (1) has submitted to the ERC his written request for appeal three regulated energy production licenses (new application) cancellation, causing the appeal to terminate, and the with a total generator rating of 8,225.00 kVA and; (2) two other appellant did not lodge his appeal within the period regulated energy production licenses (renewal) with a total prescribed by law, as follows:(1) the 500-kV the border area generator rating of 2,436 kVA. (Nan Province)-Nan 2 transmission line, concerning one 3.2 Approve the issuance of a regulated energy appellant (Survey Plot No. B208); and (2) the 500-kV Nan production license and an electricity industry operation 2 - Mae Moh 3 transmission line, concerning one appellant license to the company formed by the merger of the PTT (Survey Plot No. E404). Aromatics and Refining Public Company Limited and the 1.3 Adjust the location for installing an electricity PTT Chemical Public Company Limited, by changing the poleof the 500-kV transmission line, linking Mae Moh 3 - Mae licensee name, which is the most appropriate way as Moh 4 - Lampang 1 - Lamphun 1 - Lamphun 2 (Pole No. proposed by the OERC. If the newly established company 362), concerning one appellant, because the pole location wants to change the name of the licensee, a written request adjustment as requested by the opponent is feasible in the relating there to shall be submitted, together with relevant engineering terms. The relocation is also in line with the documents, to the OERC within 15 days as from the date appeal deliberation criteria, i.e. to move the pole backwards of merger registration is completed. in a straight line from the previously determined location, 3.3 Approve the issuance of a natural gas at a distance of about 70 meters. transportation license through natural gas system under 1.4 Dispose of the objection to the locations for the Natural Gas Transmission Pipeline Project to Nong pole installation of nine appellants out of the case-list of Saeng Power Plant to Gulf JPNS Co., Ltd. (the length of energy network system area appeals, as follows: (1) the the natural gas transportation pipelineis 19.263 km). 500-kV transmission line, linking Mae Moh 3 - Mae Moh 4. Acknowledge the outcome of the hearing on 4 - Lampang 1 - Lamphun 1 - Lamphun 2, concerning three EGAT’s main power transmission system expansion project appellants (Poles No. 315, 354 and 354); (2) the 115-kV to accommodate power purchase from SPP Cogeneration Roi Et 1 – Maha Sarakham transmission line, concerning power plants, in accordance with EGAT’s power purchase one appellant (Pole No.146); and (3) the 230-kV Samut regulations of the year 2010, which has no opponent, Sakhon 4 - (Samut Sakhon 1) –Samut Sakhon 3 - Sam following the hearing arranged by the OERC via its website Phran 1, concerning five appellants (Poles No. 23, 9, 8, 8 during 11 - 25 June 2011, and agree to support the project and 8), because the opponents have submitted to the ERC operation of EGAT because the project supports the their written request for objection cancellation, causing the government policy on the purchase of power generated objection to terminate. from cogeneration system, which promotes efficient power 2. Approve the outcome of deliberation on objection generation, pursuant to Thailand Power Development Plan to the laying of the 4th natural gas network system (Rayong 2010 - 2030 (PDP 2010). The project can also high wind - KaengKhoi) of the PTT, as opined by the Sub-Committee energy potential. In this connection, EGAT is required to on Deliberation of Appeals on an Energy Network System report the plans and results of the operations to the ERC Area, at its Meeting No. 3/2011 (7th) on 27 June 2011, on a quarterly basis. Moreover, after approval is granted by that is, to dismiss the objection petitions of 20 opponents the cabinet to carry out the project and the route or location since there is noreasonable ground to oppose the natural of the energy network system is selected, EGAT, being an gas network system construction, coupled with the fact energy industry operation licensee under the Act, will have that there is no agricultural product being harvested in to prepare a diagram showing detailed characteristics of the the land of the opponents and that the operation of the direction and right-of-way boundaries for laying the energy PTT has been undertaken completely in accordance network system, for submission to the ERC for approval with the legal procedures, i.e.the PTT has alreadypaid or under Section 106 of the Act.Accordingly, the OERC is deposited the compensation for land and property to all of instructed to present the ERC opinions on this project to the the 20 opponents, and the PTT’s operation does not cause Minister of Energy for further presentation to the Cabinet for troubles or disturbances or render adverse impact to the approval, which is the execution in accordance with Section nature,and does not depreciate the economic use of the 11 (5) of the Act.

the Energy Regulatory Commission & Office of the Energy Regulatory Commission 109 5. Give consent that the issuance of a proclamation 6.5 Approve the determination of the Retail Ft prohibiting change oramendment to contracts on renewable to be charged to electricity consumers in the billing of July energy projects, pursuant to the resolution of the Managing - August 2011 at - 6.00 satangs per unit (excluding VAT). Committeeat its Meeting No. 1/2011 (6th) on 27 January 6.6 Agreeth at the MEA and PEA announce or 2011, is already within the PEA’s authority, with no need to publicize the electricity tariffs pursuant to Items 6.2, 6.3 seek prior approval of the ERC. This issue has been brought and 6.5 via the irorganizational websites, electricity bills, up because, on 17 February 2011 the PEA sent in a letter attachments to electricity bills or the newspapers. requesting comments about the draft PEA Proclamation 7. Acknowledge the OERC operation in response Prohibiting Change or Amendment to Contracts on to the incident of natural gas leakage from the offshore Renewable Energy Projects, pursuant to the Resolution of natural gas transmission pipeline, Line 1, and instruct the the Managing Committeeat its Meeting No. 1/2011 (6th) on OERC to wait for the explanation of the facts of the incident, 27 January 2011. in writing, from the PTT, before filing acomplaint aboutthe 6. Approve the Restructuring of Thailand Electricity incident. In this regard, the OERC shall prepare a power Tariff Structure for the Period 2011-2015, as follows: of attorney from the ERC, to replace the one dated 1 July 6.1 Acknowledge the outcome of the public 2011, in order to take further action in this matter. hearing on the Restructuring of Thailand Electricity Tariff 8. The OERC is instructed to review the cost Structure for the Period 2011 - 2015. estimation for organizing a public hearing on a project that 6.2 Approve the electricity tariff structure for may cause severe impact on the community (EHIA) for

the period 2011-2015, which includes the current Ft rate submission to the ERC for consideration again. of 0.9581 baht per unit in the current retail electricity tariff th structure, with effectiveness as from the billing in the month Meeting No. 27/2011 (136 ) of July 2011 for a period of two years, and to have the 20 July 2011 structure reviewed in 2013 so as to promulgate and enforce the revised structure, according to the stipulated procedures, 1. Acknowledge the approach to developing a which is in compliance with the cabinet resolution of 3 May manual on preparing an accounting separation report for 2011. the year 2010, and the approach to developing a report 6.3 Agree to the distribution of electricity tariff on Public Service Obligations of the PEA, and instruct the burden resulting from the subsidization ofelectricity tariff for PEA to improve the manual on preparing an accounting residential electricity consumers (Schedule 1.1 of the MEA, separation report, on the part of the approach to separate and Schedule 1.1.1 of the PEA), with the installation of a 5 accounts and cost allocation, taking into consideration the (15) – amperemeter and with consumption not exceeding 90 return between the power distribution system business kWh per month, to all schedules of the electricity consumers group and the retailand service business group, based on as well as those who are direct customers of EGAT and the ROIC ratio, for submission to the ERC within September IPPs, except for the residential consumers, small general 2011. In this connection, the OERC is assigned to determine services and agricultural pumping service. the framework for accounting separation of the Distribution 6.4 Approve the use of part of the claw-back, Utilities to reflect the regulatory approaches, pursuant to or money from the investment cost that was lower than the types of energy industry operation licenses. planned, of the three Power Utilities duringthe period 2. Approve, in principle, the collection of customer 2008-2010, accounting for approximately 6,900 million guarantee deposits (CGD) and the CGD refund for those baht, to cut down the electricity tariff according to the with good behavior, and instruct the OERC to study the

Ft formula, as follows: (1) for the months of July-August guidelines for amending the CGD criteria, taking into account 2011 at 1,603,050,000 baht, divided into 738,121,900 baht the ERC comments in undertaking the study, and to conduct (369,060,950 baht per month) from EGAT 449,735,100 ahearing to obtain views from concernedagencies; then baht (224,867,550 baht per month) from the MEA, and present the matter to the ERC for consideration. The ERC 415,193,000 baht (207,596,500 baht per month) from the comments on this matter are listed below: PEA; and (2) for the round of September to December 2.1 Consideration should be made on the facts in 2011, at 3,078,350,000 baht, divided into 1,417,421,500 two aspects, i.e. (1) the CGD collection is to insure against baht (354,355,375 baht per month) from EGAT, 863,630,000 the risk of the Distribution Utilities in the case where an baht (215,907,500 baht per month) from the MEA, and electricity consumer does not pay the electricity tariff or 797,298,500 baht (199,324,625 baht per month) from the makes a delayed payment - the amount of the CGD should PEA, in order to relieve the burden of electricity tariffs on be considered to be adequate for insuring the Distribution power consumers. Utilities’ risk that may happen, while not placing an excessive

110 Annual Report 2011 burden on electricity consumers, and consideration shall be BTU, and on the part of variable costs (Commodity Charge) made whether or not, in the case of electricity consumers at 1.7050 baht per million BTU, with the condition to use with good behavior, the CGD collection should be deducted, the guidelines on regulating the natural gas storage and and how; and (2) how the Power Utilities will make use of transformation of liquid to gas operation on the part of the CGD and the interest gained. capital expenditure (CAPEX) regulation, fixed operation 2.2 In analyzing the matter, the following issues cost regulation, inspection of the licensees’ information. should be separately considered: (1) whether the Distribution In this connection, the licensees are required to submit a Utilities should collect the CGD, or not; if it is necessary to performance report, covering the finance and accounting, collect the CGD, what the appropriate rate would be; (2) the operation and the standards, to the OERC everyyear. whether alternative securities that the Distribution Utilities The OERC is also instructed to improve the regulatory allow electricity consumers to use as collateral for the CGD, guidelines for use in the future. comprising cash, a letter of guarantee and a government/ 3.3 Approve that PTT LNG Co., Ltd. collects state enterprise bond, are sufficient or not; whether there the above-mentioned service tariffs as from July 2011 should be other options, such as the payment guarantee onwards. Are view shall be conducted in the next twoyears deposits by insurance companies, for electricity consumers on the ROIC rate, which has been determined to be equal to choose, or not; and (3) whether the collateral security to the WACC of the PTT business and which is used for should be refunded to electricity consumers with good determining the service tariffs for natural gas storage and behavior, or not, and what will be the criteria for such a transformation of liquid to gas. refund; and in the case where electricity consumers use 4. Approve the amendments to the power purchase cash as collateral, whether the interest should be paid or regulations from SPPs, as follows: not and how. All of these are aimed at creating clarity in 4.1 Approve the amendments to the regulations considering the matter. for the purchase of power from SPPs, exclusively for 2.3 Additional information should be prepared electricity generation using non-conventional energy, waste for consideration regarding the current ratio of each type of or residues as fuel, and that using cogeneration system, securities that electricity consumers use as collateral for the 2005 (as amended in 2011), on the part related to the CGD because there is inequality in using different security NEPC authority to become the ERC authority, effective as types, i.e. if electricity consumers use a government bond from 10 September 2009 onwards. as collateral for the CGD, the interest gained there of still 4.2 Approve the amendments to the regulations belongs to the bond owners;if a letter of guarantee is used, for the purchase of power from SPPs, 2007 (as amended in there will be an operating expense; and if the collateral 2009 and 2010) on the part related to the NEPC authority to security is cash, the interest earned thereof will become become the ERC authority, and on the issue of extending the revenue of the Distribution Utilities, which should be the duration for PPA signing, due to a cause that is not the considered further as to in which account the bookkeeping SPP’s fault, and due to the fact that EGAT wishes to extend of this part of interest of the Distribution Utilities will record, the duration for PPA signing, when there is an unavoidable and what it will be spent for. cause and through no fault of the SPP, hence the inability 2.4 In citing the implementation of this matter in to sign the PPA within the specified timeframe. For this foreign countries, the information of ASEAN countries or matter, EGAT is empowered to determine the extended countries with similar characteristics to Thailand should be duration, as appropriate, and shall have retroactive effect providedso that comparison could be made with Thailand. as from 10 September 2009 onwards. This is because, in the United States, England, Australia or 5. Approve the change in the licensed item of other developed countries usually, there are some kinds of Chumporn Palm Oil Industry Public Company Limited, i.e. collateral in doing businesses, such as the house renting, to increase the installed capacity from previously licensed and the collateral security will be refunded when the lessee 8.076 MW to 8.245 MW. (the renter) terminates the lease. 6. Assigned the OERC to discuss with relevant 3. Approve the collection of service tariffs for natural authorities to find a solution to the establishment of Power gas storage and transformation of liquid to gas, as follows: Development Funds in designated areas in the case of 3.1 Acknowledge the outcome of the hearing on power generation from hydropower, because such power the collection of service tariffs for natural gas storage and plants have not been licensed due to problems with various transformation of liquid to gas. legal issues so as to enable license issuance for such power 3.2 Approvethe service tariff for natural gas plants so that people in the areas surrounding the power storage and transformation of liquid to gas on the part of plants could use the Power Development Funds for their fixed costs (Demand Charge) at 31.6859 baht per million locality development activities.

the Energy Regulatory Commission & Office of the Energy Regulatory Commission 111 th Meeting No. 28/2011 (137 ) 3.8 Confirm the compensation prices for six items 28 July 2011 of trees/plants for the appellants, i.e. the cultivated banana (“namwaa”), pitaya (“dragon fruit”), fragrant coconut, sugar 1. Instruct the PEA to consider implementing the apple, cassava and papaya, as the prices are deemed fair SCOD postponement for VSPP projects of which the SCOD and reasonable. are due, pursuant to the implementation authority specified 3.9 Instruct the PTT to pay the additional in the regulations for the purchase of power from VSPPs, compensation to the appellants within 45 days as from the criteria on readiness assessment and the guidelines the date of receipt of the OERC’s written notice. If the on screening those with practical capability to carry out compensation payment can not be made within the specified projects from SPPs and VSPPs with PPA signed, and the period of time, the PTT shall pay interest to the appellants at PEA Announcement on Determination of Adder for VSPPs the maximum fixed deposit interest rate of the Government Using Renewable Energy. Saving Bank as from the date over the specified period, 2. Approve one electricity generation license with a until the additional compensation is paid. total installed capacity of 8.190 MW; two regulated energy 4. Approve the request for review of designated production licenses as follows: (1) one regulated energy areas and the number of CDC members, as follows: production license (new application) with a total generator 4.1 Approve the outcome of deliberation on rating of 8,190 kVA and; (2) one regulated energy production complaints lodged by the Ban Dong Sub-district village license (generating capacity expansion) with an expansion headman and the Chang Nuea. Sub-district village headman of generator rating of 295.00 kVA. about the review of the designated areas under the Power 3. Approve the outcome of deliberation on appeals Development Fund (PDF): Mae Moh Power Plant, Lampang for compensation related to the PTT natural gas network Province, by requesting that the number of CDC members system, as opined by the Sub-Committee on Deliberation be maintained, pursuant to the OERC Proclamation on of Appeal for Compensation at its Meeting No. 5/2011 on the Determination of Designated Areas, the Management 26 May 2011, as follows. Category of Power Development Fund in Designated Areas, 3.1 Confirm the land compensation prices to be and the Number of Community Development Committee paid to five appellants. (CDC) Members, until a clear theoretical research on impact 3.2 Confirm the compensation price for the land is done. under the Title Deeds No. 47009 and No. 9450 because 4.2 Approve the outcome of deliberation on the price is reasonable and fair. complaints lodged by community leaders and local leaders in 3.3 Confirm the compensation price for three the areas surrounding the power plants of Gulf Cogeneration parcels of land in the Map Ta Phut Sub-district Municipality, Co., Ltd. And Gulf Power Generation Co., Ltd., requesting i.e. the land with N.S. 3K documents No. 1790 and No. a review of the determination of the CDC number of the 286, and that under the Title Deed No. 19663. PDF : Saraburi Province 1, and agree to the increase in 3.4 Increase the compensation price for two the number of civil society representatives of Tan Diao parcels of land in Map Kha Sub-district, i.e. the land with Sub-district from 2 to 3 persons, of Ban Pa Sub-district N.S. 3K documents No. 1990 and No. 1567, from the from 1 to 3 persons, and the increase in the number of previously determined compensation price at 700 baht per government representatives in proportion to that of the civil square wah [1wah2=4m2] to 1,000 baht per square wah. society representatives in the CDC from 7 to 8 persons. 3.5 Dismiss a land compensation appeal 4.3 Approve the outcome of deliberation on concerning one land parcel which is under the Title Deed complaints lodged by Rayong Province, requesting a review No. 763 because the appellant filed the appeal after the of the determination of the CDC number of the PDF: Map expiration of the specified 30-day period as from the date Ta Phut Industrial Estate, Rayong Province, and agree to of receipt of the notification of the compensation amount. the increase in the number of civil society representatives 3.6 Dismiss the appeals of six appellants, asking of Neun Phra Sub-districtand Ban Chang Sub-district for compensation for land outside the natural gas network from 2 to 3 persons, and the increase in the number of system area, requesting to purchase land outside the natural government representatives in proportion to that of the civil gas network system area, and asking for compensation for society representatives in the CDC from 7 to 9 persons, by the climbing wattle plants grown outside the natural gas increasing the members to be appointed by the Provincial network system area, since the matters are not within the Governor. ERC jurisdiction. 4.4 Approve the revision of the CDC numbers 3.7 Increase the compensation prices for two of PDF: Chonburi Province 2, from 26 to 27 persons, by items of trees/plants for the appellants, i.e. pineapple plants increasing the government representatives from 7 to 8 to 50,000 baht per rai, and guava trees, inclusive of the persons, i.e. increasing the members to be appointed by seedling and planting labor costs, to 30 baht per tree. the Provincial Governor by 1 person. 112 Annual Report 2011 5. Authorize EGAT to calculate a new wholesale 2.1 Approve one power generation facility electricity tariff, using the sum of tariffs under the former operation license with a total engine power of 4,212.06 wholesale electricity tariff structure, plus the former HP; two electricity generation licenses with a total installed

Wholesale Ft and deducting by the rate of revenue capacity of 35.625 MW; one regulated energy production compensation among the Power Utilities, which, on the license (new application) with a total generator rating of part of EGAT, is 0.0219 baht per unit, and allow EGAT to 4,000 kVA; one electricity distribution system license and; use this new wholesale electricity tariff as from the billing one electricity retail license. in July 2011 onwards, until another review of the wholesale 2.2 Approve the issuance of one electricity electricity tariff is made. In addition, EGAT is instructed to generation license to an existing electricity industry operator use the Retail Ft announced for the billing in July - August under the sugar industry category prior to the enforcement 2011, at -0.0600 baht per unit, as a base for calculating of theAct, with an installed capacity of 17.00 MW. the Wholesale Ft for the billing in July - August 2011. 2.3 Approve the transfer of rights of Siam City Accordingly, EGAT shall publicize the wholesale electricity Cement Public Company Limited, pursuant to the electricity tariff through the EGAT website and also notify the service generation license, No. ERC0 1-1 (2) / 53-060, with an users. installed capacity of 32 MW, to Siam City Power Co., Ltd. 6. Approve the determination of the contribution 2.4 Approve the guidelines for organizing a rate to the Power Development Fund to subsidize the hearing on a project that may cause severe impact on electricity charge for under privileged electricity consumers the community (EHIA is required), pursuant to Section 67, under Section 97 (1) of the Act, i.e. to subsidize the electricity Clause 2, of the Constitution of the Kingdom of Thailand, costs for residential consumers under Schedule 1.1, with the B.E. 2550 (2007), as follows: installation of a 5 (15) – amperemeter and with consumption 2.4.1 Approve the determination of no more than 90 units per month, at a rate of 0.12 baht per remuneration of the Committee on Public and Stakeholder unit. The calculation is based on the selling units to all power Hearing at a rate of 50,000 Baht per person per project. consumer schedules, except the residential consumers, 2.4.2 Approve the appointment of members small general services and agricultural pumping service. of the Committee on Public and Stakeholder Hearing, by Accordingly, the contribution rate shall be collected from instructing the OERC to present a name list to the ERC for all electricity retail licensees and shall be effective as from consideration and appointment, by project. The Notification the billing in July2011 onwards. The OERC is assigned to of the Ministry of Natural Resourcesand Environmenton determine the guidelines and procedures for contribution Determination of Criteria, Procedures, Regulation and delivery to and disbursement of money from the Fund to Guidelines for Preparing Environmental Impact Assessment achieve practical implementation results. Report for a Project or an Activity that May Cause Severe th Impact on Community in terms of Environmental Quality, Meeting No. 29/2011 (No. 138 ) Natural Resources and Health, dated 29 December 2009, 4 August 2011 shall be applied, mutatis mutandis. 2.4.3 Approve the draft ERC Regulation on 1. Approve in principle the improvement of the Application for License and Permission for Energy Industry components of the orking Group appointed under the Operation (No.2) B.E. ….. Memorandum of Agreement on Cooperation between the 2.4.4 Approve that the OERC is to determine ERC and the Ministry of Industry on Guidelines on Licensing the conditions and criteria as well as the minimum scope of the Establishment of a Factory and Others for Energy work of an employment contract, and to employ a consultant Industry Operation, to correspond with the positions and to conduct a hearing by energy project, and to charge the organizational structure of the OERC. Moreover, the order cost of organizing the public and stakeholder hearing to appointing the Working Group, dated 16 March 2010, shall concerned energy industry operators, falling within the scope be revoked. The OERC is instructed to improve the Working of Section 67, Clause 2, of the Constitution of the Kingdom Group components, by identifying the name or position of Thailand, B.E.2550 (2007), in accordance with the actual of the assigned person, being the OERC Representative cost incurred. who acts as Working Group Member and Secretary, and 2.4.5 In the case of the combined-cycle also specifying the name of the Senior Specialist of the power plant of GHECO-One Co., Ltd. (the company), Licensing Department, acting as Working Group Member, consent is given to the implementation, as follows: (1) to for presentation to the ERC Chairman for consideration and prepare alist of applicants interested to be members of the signature. Committee on Public and Stakeholder Hearing (the Hearing 2. Approve the issuance of energy industry Committee), and to select the Hearing Committee for the operation licenses and other related issues as follows: combined-cycle power project of the company, based on

the Energy Regulatory Commission & Office of the Energy Regulatory Commission 113 the qualifications of a Hearing Committee approved by the 5.1 Approve the payment of compensation for ERC at its meeting held on 28 April 2011, for submission a power pole location in an existing electricity network to the ERC to consider issuing an order appointing the system area at a price twice that of the cost estimate of Hearing Committee at the next meeting; and (2) approve land capital for the purpose of fee collection for right and that the OERC uses money from the proposed 2011 fiscal legal act registration of immovable property, announced year budget as the advance payment, and then collects for use during 2008 – 2011, and at a rate of 100 percent, the cost of conducting the hearing from the company in which will be the price close to the real market price,without accordance with the actual cost incurred. deduction of the compensation formerly paid to the people 3. Approve the principles, the rationale and because it is the utilization of land for construction of new the hearing process under Section 26 of the Act, as power poles. proposed by the OERC, as follows: (1) the essenceto 5.2 Approve the payment of land compensation be disclosed comprising the rationale and necessity, key related to the electricity network systems (additional principles,impacts that individuals, groups of persons announcement) with a short distance, starting from the or licensees will receive, and other issues in essence power pole location at the cross-section of the existing specified by the ERC; (2) methods of information disclosure, transmission line to Phuket 3 Substation, involving four comprising the OERC computer network system, publication transmission lines, using the price of land acquisition by in widely distributed local newspapers, and other means EGAT for installation of Phuket 3Substation in 1998 as the as specified by the ERC; (3) methods of conducting base rate for paying land compensation to all cases at the ahearing comprising the OERC computer network system, same rate, with no need to consider the price by blog/zone. attitude surveys, workshops, provision of written opinions 5.3 Approve the payment of compensation for or information directly to the OERC or by mail, public trees and building/structure relocation using the list of forums, or other means as specified by the ERC, together standard prices for trees and agricultural products and the with names,surnames and identification card numbers; (4) list of standard compensation prices for removal of buildings the duration shall comply with that specified by the ERC, and structures, announced by EGAT in 2011as the basis taking into account the severity of impact that may affect forcalculating the compensation for trees and agricultural individuals, groups of persons or licensees; (5) summation products and for building/structure relocation. of the hearing outcome, after the hearing duration is over, In addition, the ERC has an additional resolution for submission to the ERC within 15 days; and (6) if the instructing the OERC to expedite the preparation of the information is not clear, the ERC may inquire or request criteria for paying compensation for eviction of general additional documents for consideration. Accordingly, public properties covered by an energy network system the OERC is assigned to review the hearing processby to be able to put into effect in due course, once the study transforming the ERC regulation to an operational manual, on the payment of compensation for eviction of general then, circulate to the ERC for consideration. public properties covered by an energy network system is 4. Appoint three EGAT staff members as competent completed. officials, under Section 122 (5) of the Act,to implement 6. Approve the principles of determining steps and the construction of an electricity network system, install implementation procedures of the recruitment of civil society poles, demolish buildings/structures, and cut down trunks, representatives in the Power Development Fund Committee branches or roots of trees in the 500-kV Pluak Daeng - 500- in a designated area, as follows: kV Nong Chokgrid connection point – Wang Noi, Line 2, 6.1 Selection of village representatives -- by electricity network system area. The appointed competent organizing a public forumat village level to select one officials shall adhere to and act in compliance with the representative from each village, by secret ballot. The ethical practice under Article 5 of the ERC Regulation on District Headman, or Chief of an equivalent government the Code of Conduct of the Commission Members and agency, in the designated area, shall assign the Village Competent Officials B.E. 2553 (2010). Such competent Committee (or Community Committee as the case may be) official appointment will be effective for a period of 12 to carry out the selection according to the specified steps monthsas from the date the order is signed. If, however, and implementation procedures. the duty execution is completed before the mentioned term 6.2 Selection of sub-district representatives -- the is due, the status of competent officials shall be terminated District Headman, or the assigned person, shall carry out then. the following: 5. Approve the determination of compensation for 6.2.1 Arrange a meeting of the selected land and property in an existing electricity network system village representatives to have them present their vision and area and a new electricity network system area of EGAT, select among themselves the Sub-district Representatives, as follows: at the amount specified by the ERC, by drawing lots. Any

114 Annual Report 2011 village representative who is not interested to be a CDC 2.2 Approve the issuance of three natural gas member representing the civil society sector, shall express transportation license through pipeline natural gas system his/her wish and sign a waiver prior to the lot drawing. After for a distance of 8.115 kilometers. Accordingly the natural that, the District Headman, or the assigned person, shall gas transportation licensees shall prepare diagrams showing monitor the lot drawing according to the method stipulated detailed characteristics of the directions and boundaries by the OERC. for laying the concerned network systems, for submission 6.2.2 Arrange ameeting of the recruited to the ERC for consideration; and when the ERC grants village representatives to select the Tambon (Sub-district) approval, the OERC shall announce the determination of Development Committee (TDC) members representing other the network system areas. sectors (only for a Category A Fund) at the amount not 3. Approvethe appointment Mr. Mahamamusueni exceeding one-third of the number of villages in that Sub- Kaji as Member of the Regional Energy Consumer district. When combined with the TDC members representing Committee of Region 12, to fill in the vacancy the civil society sector, the whole TDC members shall be 4. Approve the draft Memorandum of Agreement on no less than seven persons, and the selection results of Cooperation with the Stock Exchange of Thailand (SET), TDC members representing other sectors shall be recorded, and instruct the OERC to coordinate with the SET regarding by having the District Headman, or the assigned person, the signing ceremony of theafore said Memorandum of the OERC representative and the village representatives, Agreement. participating in the meeting, sign the document certifying the 5. Acknowledge the comments of the Federation selection result using the format specified by the OERC. In of Thai Industries (FTI) on the restructuring of Thailand the case where any village representative has been chosen electricity tariffs during 2011 - 2015, and instruct the OERC to be a CDC member representing the civil society sector, to notify the FTI, in writing, that such undertaking of the the next person on the list selected as representative of ERC is in accordance with the government policy. In this that village shall become theTDC member representing the regard, the FTI has made comments about the development civil society sector of that village instead. of Thailand electricity tariff structure during 2011 - 2015 that 6.2.3 The District Headman shall notify, there are issues affecting the industrial sector because the in writing, the list of persons recruited as CDC members latter must bear the burden of rising electricity costby12 representing the civil society sector and the whole set of satangs per unit, accounting for an increase of 3-5 percent TDC members, together with qualification testimonials, to from the former electricity cost, and that this burden will the OERC and publicize the selection results so that people continue growing when the Ft increases or when the in the locality would be informed. number of electricity consumers with consumption not The OERC is assigned to apply the principles, more than 90 units per month become higher, mainly due steps and implementation procedures of the recruitment to the policy on free electricity to electricity consumers of representatives of the civil society sector pursuant with a 5 (15) - amperemeter and consumption no more to the above resolution to the development of the ERC than 90 units per month, which has become a permanent proclamation on steps and implementation procedures of measure. In response to this issue, the industrial sector the recruitment of representatives of the civil society sector considers that the provision of electricity, free of charge in the Power Development Fund Committee in a designated and forever, may significantly affect the energy saving area, for submission to the ERC for consideration. consciousness of the general public sector and also the th overall electricity consumption that may highly increase. Meeting No. 30/2011 (No. 139 ) Therefore, if the subsidization for such free electricity 11 August 2011 consumption is required, the FTI wishes to propose the following recommendations for consideration: (1) anannual 1. Delay the consideration on issuing an electricity budget should be set up to absorb such a burden, which will generation license to one applicant, with an installed be able to illustrate the amount of the budget spent for this capacity of 59.800 MW, and instruct the OERC to check and measure in each year; and (2) a measure on electricity tariff provide complete and clear documentary evidence regarding reduction should be applied instead to all eviate the burden the permission to make use of the land where the project for small electricity consumers (residential consumers under is located, and re-submit to the ERC for consideration. Schedule 1.1) and to maintain the electricity tariff collection 2. Approve the issuance of energy industry database of those electricity consumers, which will be useful operation licenses as follows: for the management in the future. 2.1 Approve two power generation facility 6. Approve the review of the principles of determining operation licenses with a total engine power of 23,466.61 the steps and implementation procedures of the recruitment HP; two regulated energy production licenses (renewal) of civil society representatives in the Power Development with a total generator rating of 168,975.00 kVA. Fund Committee in a designated area, as follows: the Energy Regulatory Commission & Office of the Energy Regulatory Commission 115 6.1 The recruitment of members of the Power explain in detail the recruiting steps and implementation Development Fund Committee shall be undertaken in procedures of the recruitment of civil society representatives accordance with the ERC Regulation on the Power in the CDC in designated areas. Development Fund for Development or Rehabilitation of 7.2 The OERC shall estimate the cost of Localities Affected by Power Plant Operation B.E. 2553 organizing publicity campaigns and the cost of subsidization (2010), the ERC Proclamation on the Recruitment of a for traveling expenses of those who attend the publicity Community Development Committee B.E. 2554 (2011), and campaigns, including additional costs which are necessary the ERC Proclamation on the Recruitment of a Tambon and relevant tothe implementation and supportof the (Sub-district) Development Committee, B.E. 2554 (2011). recruitment of the Power Development Fund Committeein 6.2 The recruitment of civil society representatives designated areas, by reimbursing such costs from the OERC in a CDC and a TDC shall be conducted as follows: budget of the Fiscal Year 2011. 6.2.1 The recruitment of civil society 7.3 An administrative center for the recruitment representatives in a designated area within the areas of of the civil society representatives in Power Development sub-districts, villages, pursuant to the Local Administration Fund Committees in designated areas shall be established Act B.E. 2457 (1914), as amended up to the Local at the central OERC to handle problems submitted in. Administration Act (No.11) B.E. 2551 (2008), shall comply, 7.4 The Director of the Regional Office mutatis mutandis, with the Regulation of the Ministry Department is assigned to be the focal person responsible of Interior on the Criteria for Beinga Village Committee for coordinating and decision-making with regard to the Member, Duty Execution and Meetings of aVillage recruitment of Power Development Fund Committees in Committee B.E. 2551 (2008), used for selecting advisory designated areas. membersin a Village Committee. th 6.2.2 The recruitment of civil society Meeting No. 31/2011 (No. 140 ) representatives in a designated area within municipality 25 August 2011 areas and Bangkok area -- according to the Municipality Act, B.E. 2496 (1953), as amended up to the Municipality 1. Approve the request to change the criteria Act (No.12), B.E. 2546 (2003), and in conjunction with Item regarding the customer guarantee deposits (CGD), as 6A (5) of the Regulation of the Ministry of Interior on Work follows: Execution of a Municipality B.E. 2496 (1953), the may or of 1.1 Approve the approach for improvement of each municipality is empowered to issue the regulation on the terms of placing the CGD, pursuant to the comments the Community Committee operation.As each municipality of the consultative meeting among concerned agencies, as has its own recruitment process, reference should be made follows: to the regulation of the municipality, being in force, in a 1.1.1 The determination of a CGD amount given designated area. Moreover, the OERC is instructed is as follows: (1) for electricity consumers who have paid to coordinate with concerned local agencies to determine electricity bills regularly and within the period specified in the method of recruiting the civil society representatives the power service agreement in a year round, the CGD prior to undertaking the recruitment. amount shall be 1.00 times the average electricity cost in 6.2.3 As for the selection of the the past year; (2) for electricity consumers who have failed representatives at sub-district level, the District Headman, to pay electricity billsas scheduled up to 4 billing periods in or Chief of an equivalent government agency, shall hold a year, the CGC amount shall be 1.25 times the average a meeting of village representatives in the sub-district to electricity cost in the past year; (3) for electricity consumers select among themselves sub-district representatives at the who have failed to pay electricity bills as scheduled more number specified by the ERC. than 4 billing periods in a year, the CGD amount shall be The OERC is assigned to prepare the ERC 1.50 times the average electricity cost in the past year; and Proclamation on Steps and Implementation Procedures (4) for electricity consumers whose electricity supply used of the Recruitment of Civil Society Representatives in the to be disconnected, whatever the case may be, such as CDC in a Designated Area, following the principles in the having failed to pay electric bills as scheduled, having failed above resolution, for submission to the ERC Chairman for to comply with the rules and regulations of the Distribution consideration and signing so that it would come into force. Utilities, and having infringed electricity consumptions, the 7. Acknowledge the progress, problems and CGD amount shall be 2.00 times the average electricity difficulties of staging publicity campaigns for the Power cost in the past year. Development Fund, and pass additional resolutions as 1.1.2 The Power Utilities are instructed to follows: use the CGD types and payment methods according to the 7.1 The OERC shall quickly send letters to existing practice, i.e. the CGD is to be paid as a whole in one Provincial Governors, with copies to District Headmen, to time. If the payment has to be in installments, consideration

116 Annual Report 2011 should be made on the necessity and on a case by case amount of 954.02 million baht from EGAT, 581.28 million basis. baht from the MEA, and 536.64 million baht from the PEA. 1.1.3 The Power Utilities are instructed to 4.2 Revise the ERC resolution at the Meeting provide a return to electricity consumers who use cash No. 26/2011 (135th) on 13 July 2011, regarding Thailand as the CGD, as follows: (1) to pay the return in the form electricity tariff structure during 2011 - 2015, on the issue of interest at the average savings interest rate of five big concerning the approval of the use of part of the claw-back, commercial banks; (2) to pay such return once a year; and or money from the investment cost that was lower than (3) to pay such return through the electricity bill of any one planned, of the three Power Utilities during the period 2008- month. 2010, accounting for approximately 6,900 million baht, to

1.2 Instruct the Power Utilities to disclose the cut down the electricity tariff according to the Ft formulaas financial items on which the return derived from the CGD follows: “for the round of September to December 2011 has been spent. at 2071.94 million baht, divided into 954.02 million baht 1.3 Instruct the OERC to prepare documents (238.505 million baht per month) from EGAT, 581.28 million for the hearing on the approach for improvement of the baht (145.320 million baht per month) from the MEA, and terms of placing the CGD, according to the aforementioned 536.64 million baht (134.160 million baht per month) from approach commented by the ERC, and to conduct a hearing the PEA.” in accordance with Section 26 of the Act through the OERC 4.3 Approve the Retail Ft to be charged to website for a period of 15 days, and present the feedback electricity consumers in the billing round of September - to the ERC for further consideration. December 2011 at -6.00 satangs per unit (excluding VAT).

1.4 Instruct the Power Utilities to study the 4.4 Approve the calculation of Wholesale Ft to approaches and appropriateness of setting the conditions be charged to the MEA and the PEA during September for returning the CGD and reduction of the CGD amount - December 2011 at -2.31 and -5.60 satangs per unit for those who pay the bills within the period prescribed in a respectively. year round, which may be considered pursuant tothe length 4.5 Approve that the OERC takes action of time of the good payment record, to create incentives according to Section 67 of the Act, i.e. to arrange a hearing for electricity consumersto be self-disciplined, including a on electricity tariffs according to the Ft formula for the billing feasibility study to allow the CGD payment in installments. round of September-December 2011 through the OERC 2. Approve five power generation facility operation website from 26 August 2011 to 1 September 2011, at licenses with a total engine power of 47,443.58 HP; three 16:30 hrs., and present the hearing results to the ERC for electricity generation licenses with a total installed capacity consideration. of 71.68 MW; four regulated energy production licenses as 5. Approve the outcome of appeal deliberation follows: (1) three regulated energy production licenses (new regarding electricity network systems of EGAT following the application) with a total generator rating of 16,880.00 kVA opinions of the Sub-Committee on Deliberation of Appeal and; (2) one regulated energy production license (renewal) for Compensation at its Meeting No. 7/2011, on 29 July with a total generator rating of 500,850 kVA; one electricity 2011, as follows: distribution system license and; one electricity retail license. 5.1 Increase the compensation prices for land of

3. Approve the report on Ft adjustment factor five appellants, to be the same price for the whole plot of calculation for the months of February - May 2011; the land, pursuant to the precedent judgment of the Supreme information will be taken into account when calculating the Administrative Court.

Ft rate for September - December 2011. In this connection, 5.2 Affirm the determined land compensation the accumulated difference (AF) between the actual Ft prices to be paid to six appellants as the prices are (derived from calculation) and the Ft charged in May 2011, reasonable and fair. which was -17.05 satangs per unit, accounting for a sum 5.3 Increase the tree compensation prices for six of -2,207.01 million baht, will be carried over as the AF in appellants --Silver Trumpet Trees, at 1,600baht per tree; the month of June 2011, at about 17.24 satangs per unit. Burmese Ebony, at 1,350baht per tree; White Cheesewood, 4. Approve the estimation of electricity tariffs at 1,600 baht per tree; and Golden Shower, at 900 baht per according to the Ft formula for the billing round of September tree --and increase the compensation prices for good-breed - December 2011, as follows: mango treeswith fruits, at 6,155 baht per tree, and for teak 4.1 Approve the use of claw-back, or money from trees, at 630 baht per tree. the investment that was lower than planned of the three 5.4 Affirm compensation prices for other tree Power Utilities, during 2008 - 2010, of 2,071.94 million baht, itemsapart from those in Item 5.3 for two appellants. to cut down electricity tariff according to the Ft formula for 5.5 Increase the building/structure compensation the round of September - December 2011, comprising an prices for two appellants, as follows: (1) increase the

the Energy Regulatory Commission & Office of the Energy Regulatory Commission 117 residence compensation to 1,426,331.37 baht, the laterite (1) The cost estimate for the purpose fill at 379.44 baht per cubic meter, and soil protection walls of fee collection for registration of right and legal act on and pier stairs at 46,693.23 baht; and (2) increase the soil immovable property, announced for use during 2008 –2011, filling cost to 68 baht per cubic meter. by individual land plots, will not be applied, because the 5.6 Instruct EGAT and the appellants to jointly price does not reflect the current market price. inspect again the amount of land together with the number (2) The book value of roads in the and types of trees covered by electrical network system areas of the Treasury Department that the Lampang areas.When the inspection result is obtained, EGAT shall Provincial Land Office, Mae Moh Branch, uses for fee pay the compensation according tothe amount of land and collection for registration of right and legal act on immovable at the prices specified. property, plus an increase of 36 percent, shall be used as 5.7 Dismiss the consideration of appeal issues of the basis for determining land compensation price. three appellants, requesting compensation payment for rice (3) In the event that any land parcel crops in the field, because EGAT has not yet undertaken is located in thearea with determined price units as from the construction and hence no damage has occurred, and 2 units and over, and that the electricity network system also requesting compensation for the residences that are passes through both units, the maximum price unit shall outside the electricity network system area, becausethe be used as the basis for calculating compensation for that matter is beyond the ERC jurisdiction. land parcel as a whole. 5.8 Instruct EGAT to consider providing financial 6.1.2 For land in the Agricultural Land assistance for the remaining part of the land outside Reform Office (ALRO) areas (“SorPorKor Land”), the the electricity network system area,which is small and compensation payment for utilization of ALRO land in infragments that cannot be made use of as usual and which Lampang Province shall be at a rate of 20 percent of the land EGAT has not yet considered giving assistance according price according to the book value of roads in the responsible to relevant regulations of EGAT. This is to create fairness areas of the Lampang Provincial Land Office, in Mae Moh and help alleviate difficulties for the appellants. District, for the period 2008 - 2011. The payment shall 5.9 EGAT is instructed to pay the additional be made in accordance with the criteria, procedures and compensation to the appellants within 45 days as from conditions of determination and payment of compensation the date of receipt of the OERC’s written notice. If the specified by theERC. compensation payment cannot be made within the specified 6.1.3 For tree compensation, the following period of time, EGAT shall pay interest to the appellants at prices of tree sshall be used for submission to the ERC the maximum fixed deposit interest rate of the Government to consider the compensation: (1) the prices of economic Saving Bank as from the date over the specified period, plants, general trees, seasonal plants and paddy pursuant until the additional compensation is paid. to EGAT’s tree/crop compensation price lists, as updated 6. Approve the determination of compensation for in March 2011, shall be used as the basis for calculating land and property covered by the 500-kV Nan 2 - Mae Moh tree/crop compensation, except for pineapple, cassava, 3 electricity network system area of EGAT, in Lampang soybeans, glutinous rice and corn; (2) the compensation Province and Phrae Province, pursuant to the resolution prices per rai [1,600 m2 or 0.16 hectare] for pineapple, of the Committee on Land and Property Price for Lampang cassava, soybeans, glutinous rice and corn are determined Province at its Meeting No.2/2011on 11 May 2011, and that at 48,000 baht, 12,000 baht, 5,250 baht, 10,200 baht and of the Committee on Land and Property Price for Phrae 8,000 baht respectively; and (3) for trees/crops that are not Province at its Meeting No.2/2011on 12 May 2011, as on EGAT’s tree/crop compensation price lists, EGAT shall follows: coordinate with the District Agricultural Extension Officer to 6.1 Approve the determination of land and consider comparing them with the types or species of those property price to be used for calculating compensation on EGAT’s tree/crop compensation price lists of 2011 to related to the 500-kV Nan 2 - Mae Moh 3 electrical network determine the amount of tree compensation to be paid to system areain Lampang Province areas, pursuant to the the owners. resolution of the Committee on Land and Property Price 6.1.4 With regard to compensation for for Lampang Province, as follows: building/structure demolishment and removal, it is deemed 6.1.1 For private land, the land price in the appropriateto use the compensation prices relating there to, areas of Sop Pat Sub-district, Na Sak Sub-district and Mae according toEGAT’s standard price list announced in 2011, Moh Sub-district in Mae Moh District, Lampang Province except for the earth work, for which the prices pursuant shall be used as the basis for calculating land compensation to the price list of the Local Administration Organization of to be paid to landowners or occupants, or other right holders, the locality covered by the electricity network system shall as follows:

118 Annual Report 2011 be used as the basisfor paying compensation for building/ which no annual local development tax is paid, pursuant structure demolishment and removal. to the aforesaid criteria, as the case may be. 6.1.5 Agree to the payment of financial 6.2.2 For land in the ALRO areas, EGAT assistance for humanitarian reasons to people who occupy shall pay the compensation for the ALRO land utilization in and utilize a piece of stateland, as follows: (1) agree to the Phrae Province at a rate of 20 percent of the cost estimate payment of financial assistance for humanitarian reasons to for the purpose of fee collection for registration of right and people who occupy and utilize land covered by the electricity legal act on immovable property, for use during 2008 - 2011; network system area, such as ALRO land, land in national the payment shall be made in accordance with the criteria, reserved forest areas, public land, etc., by applying the procedures and conditionsof determination and payment of criteria of land compensation payment to calculating the compensation specified by the ERC. payment of financial assistance for humanitarian reasons, 6.2.3 For tree compensation, the following mutatis mutandis; (2) it is agreeable to use the land prices prices of trees shall be used for submission to the ERC according to the book value of roads in the responsible to consider the compensation: (1) the prices of economic areas of the Lampang Provincial Land Office for the period plants, general trees, seasonal plants and pad dy pursuant 2008-2011 as the base for calculating the payment of to EGAT’s standard price lists, as updated in March financial assistance for humanitarian reasons; (3) evidence 2011, shall be used as the basis for calculating tree/crop is required in receiving such financial assistance and in compensation, except for teak trees, good-breed longan, verifying the rights of genuine land occupiers. sweet tamarind, good-breed litchi, raintrees, monkey-flower 6.2 Approve the determination of land and trees, Holland papaya, tangerine, good–breed rubber trees, property price to be used for calculating compensation corn, glutinous rice, sesame, Turkish tobacco, burley related to the 500-kV Nan 2 - Mae Moh 3 electrical network tobacco, Virginia tobacco, sugar cane, soy bean and nuts, system area in Phrae Province areas, pursuant to the for which new prices shall be determined pursuant to the resolution of the Committee on Land and Property Price resolution of the Committee on Land and Property Price for Phrae Province, as follows: for Phrae Province; and (2) for trees/crops that are not on 6.2.1 For private land, land prices in the EGAT’s tree/crop compensation price lists, EGAT shall areas of Long District, Nong Muang Khai District, Song coordinate with the District Agricultural Extension Officer District and Rong Kwang District in Phrae Province shall be to consider comparing them with the types or species of used as the basis for calculating land compensation to be those on EGAT’s tree/crop compensation price lists of 2011 paid to the landowners, or occupiers, or other right holders, to determine the amount of tree compensation to be paid as follows: (1) in the areas of Long District, Nong Muang to the owners. Khai District and Song District, the cost estimate for the 6.2.4 With regard to compensation for purpose of fee collection for registration of right and legal building/structure demolishment and removal, it is deemed act on immovable property, for use during 2008 - 2011, appropriate to use the compensation prices relating there to, shall be used, plus an increase of 35 percent tobe close to according to EGAT’s standard price list announced in 2011, the normal market price, except for the land in Daen Chum except for the earth work, for which the prices pursuant Phon Sub-district, in Song District -- Zone 07 Block A, Unit to the price list of the Local Administration Organization of 1 -- for which the compensation price is set at 500,000 baht the locality covered by the electricity network system shall per raito be equal to that in Mae Yang Rong Sub-district be used as the basis for paying compensation for building/ in Rong Kwang District, because they are adjacentto the structure demolishment and removal. same road; (2) in Rong Kwang District, it is agreeable to 6.2.5 Agree to the payment of financial use the cost estimate for the purpose of fee collection for assistance for humanitarian reasons to people who occupy registration of right and legal act on immovable property, and utilize a piece of state land, as follows: (1) agree that for use during 2008 - 2011, plus an increase of 25 - 108 EGAT should pay financial assistance for humanitarian percent to be close to the normal market price; (3) in reasons to people who occupy and utilize land covered the event that any land parcel is located in the area with by the electricity network system area, such as land in the determined price units as from 2 units and over, and that ALRO areas, land in national reserved forest areas, public the electricity network system passes through both units, land, etc., by applying the criteria of land compensation the maximum price unit shall be used as the basis for payment to calculating the payment of financial assistance calculating compensation for that land parcel as a whole; for humanitarian reasons, mutatis mutandis; (2) it is and (4) it is agreeable to pay compensation to the people agreeable to use the cost estimate for the purpose of fee who occupy and make use of the land that is not state land, collection for registration of right and legal act on immovable of which there is no land evidence (marginal land) and for property, for use during 2008 - 2011, plus an increase of

the Energy Regulatory Commission & Office of the Energy Regulatory Commission 119 10 percent, as the base for calculating the payment of Administration Organization (SAO), Saraburi Province, financial assistance for humanitarian reasons; (3) evidence requesting a review of the number of CDC members in Nong is required in receiving such financial assistance and in Pla Mo Sub-district under the PDF: Saraburi 2, Saraburi verifying the rights of genuine land. Province, from the previous proposal to increase the CDC 6.3 Agree that EGAT takes into consideration members representing the civil society sector from one the recommendations, pursuant to the resolutions of the person to four persons, to this new proposal, i.e. to increase meetings of the Committee on Land and Property Price for the CDC members representing the civil society sector in Lampang Province and that for Phrae Province, with regard Nong Pla Mo Sub-district from one person to three persons, to the payment of financial assistance for humanitarian thus making the whole CDC to comprise 35 persons-- 25civil reasons to people who occupy and utilize all types of the society representatives, nine state representatives (one state land, for further appropriate action. from the Ministry of Energy, one from the OERC and seven 7. Approve the review of the designated areas and appointed by the Governor), and one expert. the number of CDC members, as follows: 7.3 Approve the deliberation on the complaint 7.1 Approve the deliberation on the complaint lodged by Sa Kaeo Province, requesting are view of the lodged by the Governor of Phra Nakhon Si Ayutthaya designated area of the PDF: Sa Kaeo Province 1, Sa Kaeo Province, requesting a review of the designated area of the Province, to cover Ban Kaeng Sub-district in Mueang Sa Power Development Fund (PDF): Wang Noi Power Plant, Kaeo District, Sa Kaeo Province, and also consideration Phra Nakhon Si Ayutthaya Province, as follows: (1) with of the proportion of the CDC members representing the regard to the request for the ERC to consider expanding civil society sector in the area of Ban Kaeng Sub-district. the designated area to cover three additional sub-districts, In this regard, the ERC agrees to have Ban Kaeng Sub- i.e. Lam Sai, Bo Ta Lo and Phayom Sub-districts, the CDC district included in the designated area of the PDF: Sa to be recruited and appointed by the ERC will be assigned Kaeo Province 1, as proposed by Sa Kaeo Province, with to conduct a research study on the impact according to two CDC members representing the civil society sector. technical principles and to give comments on the revision Accordingly, the proportion of the state representatives, to be of the number of CDC members, for submission to the appointed by the Governor will have to be increased by two ERC for consideration, pursuant to the ERC Regulation persons to correspond with the increase in the proportion on the Power Development Fund for Development or of the civil society representatives. As a result, the total Rehabilitation of Localities Affected by the Operation of CDC number of the PDF: Sa Kaeo Province 1 will increase a Power Plant, B.E. 2553 (2010), Article 5 and Article 11 from 15 persons to 19 persons, divided into 13 civil society there of; (2) as for the request to increase the number of representatives, five government representatives (one from CDC members representing the civil society sector from the Ministry of Energy, one from the OERC, three appointed 20 persons to 23 persons, it is affirmed that the number of by the Governor) and one expert. civil society CDC members shall remain as that specified 8. Approve the steps and timeframe of the delivery in the current proclamation, because there is no sufficient and disbursement of money to/from the Power Development ground to expand the designated area, as per the aforesaid Fund under Section 97 (1) [of the Act] in relation to Item (1), so the number of civil society representatives can underprivileged power consumers, as follows: not be increased as requested; (3) as for the request to 8.1 Approve the steps and time frame of sending increase the number of CDC members representing the contributions to and disbursement of money from the Power government sector, on the part of those to be appointed Development Fund by state agencies, as follows: bythe Provincial Governor, from four persons to eight 8.1.1 Electricity retail licensees shall notify persons, it is affirmed that the number of CDC members the amount of sale units for calculating contributions to be representing the government sector,on the part of those sent in and the amount of units for calculating disbursement to be appointed by the Provincial Governor, shall be of subsidies on electricity tariffs for underprivileged electricity maintained as that specified in the current proclamation, as consumers with in five (5) business days prior to the last such a proposal does not comply with the above-mentioned business day of the month following the month in which ERC Regulation, according to which the proportion of CDC the billing is made. members representing the government sector and experts 8.1.2 The OERC will check and notify the shall not be more than one-third of the total CDC members; sum of contributions to be sent in to subsidize electricity and(4) as for the request to reduce the number ofexperts tariffs for underprivileged electricity consumers within two (2) from two persons to one person, it is affirmed to maintain business days prior to the last business day of the month the number of experts in the CDC, as that specified in the following the month in which the billing is made. current proclamation. 8.1.3 EGAT, MEA and PEA shall deliver 7.2 Approve the deliberation on the complaint contributions to the Power Development Fundin accordance lodged by Chief Executive of Nong Pla Mo Sub-district with the notified sum of contributions within the business

120 Annual Report 2011 st day prior to the last business day of the month following Meeting No. 32/2011 (141 ) the month in which the billing is made. 29 August 2011 8.1.4 EGAT, MEA and PEA shall disburse the subsidy from the Power Development Fund in 1. Approve the rate of contribution sending to and accordance with the notified sum of disbursementas from disbursement of money from the Power Development Fund the last business day of the month following the month in in accordance with Section 97 (1) of the Act for revenue which the billing is made onwards. compensation among the Power Utilities, as proposed by 8.2 Approve the details of money delivery and the OERC, as follows: disbursement to/from the Power Development Fund as 1.1 The OERC shall check on correctness and presented by the OERC, as follows: correspondence of the data of the three Power Utilities 8.2.1 The plan for delivery and disbursement before using it for calculating the revenue compensation of money to/from the Power Development Fund for rates among the Power Utilities. subsidizing electricity tariffs of underprivileged electricity 1.2 EGAT shall send contributions to the Power consumers is set around 1,000 million baht per month, or Development Fund under Section 97 (1) of the Act, for about 12,000 million baht per year. Any discrepancy in the revenue compensation among the Power Utilities, on the amount of contributions and disbursementincurred shall part of EGAT, by deducting from the wholesale electricity be used for adjusting the saleunitsin thefollowingmonth, tariff rate 0.0219 baht per unit. In this regard, EGAT has and the actual sum of contribution sending and that of already made the deduction from the new wholesale the disbursement to/from the Fund in each month shall electricity tariff, as approved by the ERC at the Meeting be cross checked with the actual sum of contributions and No. 28/2011 (137th) on 28 July 2011. disbursement for the whole year. 1.3 The MEA shall continue delivering 8.2.2 The sum of subsidy disbursement is contributions to the Power Development Fund pursuant exclusive of the VAT. The Power Utilities shall bear the VAT to the ERC Order on Sending Contribution to Power burden incurred for the time being until the notification of Development Fund under Section 97 (1) for Revenue the Revenue Department on VAT exemption takes effect. Compensation among the Power Utilities, dated 12 May 8.2.3 In the case where the amount of 2011, until the practice guidelines are determined otherwise. contributions is not adequate for the disbursement, the 1.4 The PEA shall disburse money from the Distribution Utilities shall bear the burden for the time being, Power Development Fund under Section 97 (1) of the Act and the OERC shall find a compensate method. for revenue compensation among the Power Utilities in 8.2.4 For the time being, the money delivery accordance with the total amount of contributions delivered and disbursement shall be made in accordance with the by EGAT and the MEA, as per Items 1.2 and 1.3, until the current procedures until they are updated to be in the practice guidelines are determined otherwise. form of a net amount to be used as an approach for future 1.5 Approve the rate of contributions to and practice. disbursement of money from the Power Development 8.2.5 The Sattahip Electric Welfare, which Funds pursuant to Section 97 (1) of the Act for revenue is a state agency, shall deliver and disburse money to/from compensation among the Power Utilities, as per Items 1.2, the Fund in the sameway as the three Power Utilities. 1.3 and 1.4, until the practice guidelines are determined 8.3 Approve that the disbursement of money otherwise. from the Power Development Fund for subsidizing electricity 2. The OERC shall urgently study and undertake tariffs of underprivileged electricity consumers, pursuant to actions related to the calculation of revenue compensation the resolution in Item 8.2.1, is the financial amount of an among the Power Utilities, by adhering to the ERC comments annual implementation plan of the Power Development as follows: (1) the OERC should study the ROIC suitable Fund and that the disbursement shall be made on a monthly for each type of electricity industry businesses to be used basis. for calculating revenue compensation among the Power 8.4 The OERC is instructed to draft an ERC Utilities, and shall check the financial status of the Power Order on Sending and Disbursement of Money to/from Utilities so that the calculation of revenue compensation the Power Development Fund by State Agencies for among them would be correct, appropriate and timely; (2) Underprivileged Electricity Consumers, for submission the OERC should notify the PEA to give details of the costs to the ERC Chairman for consideration and signature, of providing electricity services for underprivileged electricity and to prepare a written explanation to electricity retail consumers and/or to enhance extensive electrification and/or licensees of the burden of contribution sending to the Power to decentralize development to provincial areas and tocertify Development Fund at a rate of 12 satangs per unit. the costs by the organization. After that, the OERC shall

the Energy Regulatory Commission & Office of the Energy Regulatory Commission 121 use the costs provided by the PEA for calculating revenue (3) Mr. Jirachai Chaowalit -- Environment; (4) Dr. Kitja compensation among the Power Utilities; and (3) if a change Ruengthai -- Wellness, Occupational Health and Safety;(5) is to be made to allow EGAT to send contributions to the Mr. Veera Mavichak -- Engineering, to be appointed Power Development Fund, by reducing the wholesale Committee on Public and Stake holder Hearing regarding electricity tariff by 0.0219 baht per unit, the ERC order the Combined Cycle Power Project of GHECO - One Co., relating there to needs to be amended accordingly. Ltd., with Mr. Veera Mavichak to be appointed Chairman nd of the Committee. Accordingly, the OERC is instructed to Meeting No. 33/2011 (142 ) prepare a draft order on the aforesaid appointment, for 2 September 2011 submission to the ERC Chairman for consideration and signature. 1. Approve the deliberation on electricity tariffs 6. The OERC is assigned to revise the draft

according to the Ft formula for the billing round of September Regulation of the ERC on Criteria, Procedures and - December 2011, as follows: Conditions of Lodging and Deliberation on Disputes between 1.1 Acknowledge the hearing results on the Licensees, B.E. ...., according to the ERC opinions, and

electricity tariff calculation according to the Ft formula for to circulate it to the ERC for consideration. Moreover, the the round of September - December 2011. OERC is instructed to conduct a hearing on the revised

1.2 Approve the Retail Ft for charging to power draft regulation via the OERC website for a period of 15 consumers in the billing round of September - December days, and then present the revised draft to the ERC for 2011 at - 6.00 satang per unit (excluding VAT). reconsideration together with obtained public comments

1.3 Approve the Wholesale Ft for charging to the (if any). The ERC opinions in this regard comprise: (1) MEA and the PEA, in September - December 2011, at -2.31 the wording in Articles 13 and 14 of the draft regulation and -5.60 satangs per unit (excluding VAT) respectively. should be revised for clarity, by specifying that the ERC In this regard, the investment cost that was lower than shall appoint a Sub-Committee, which shall consist of one planned (claw-back) during the years 2008 - 2010 shall be (1) Chairman of the Sub-Committee and not more than

used to adjust the Wholesale Ft in the round of September eight (8) Sub-Committee Members; (2) the following text - December 2011 of the MEA and the PEA, accounting for should be added to Article 16 of the draft regulation: “In 145.320 million baht per month and 134.160 million baht the case where the Sub-Committee Deliberating Disputes per month, respectively. between Licensees considers that facts and evidence are 2. Approve the appointment of a Sub-Committee insufficient for deliberation of points of fact in the dispute, the to evaluate damage caused by the gas pipeline leakage Sub-Committee Deliberating Disputes between Licensees incident, and instruct the OERC to draft an order appointing has powers to call for facts.....” -- this is to clearly define the mentioned Sub-Committee, according to the ERC the powers to call for facts of the Sub-Committee; and (3) opinions, and present to the ERC Chairman for signature Article 19 of the draft regulation, stating that “In a meeting on the order. to consider the dispute, there shall be a minute in writing 3. Approve the issuance of energy industry every time ...,” should be amended as follows: “Article 19 : operation licenses as follows: When a meeting on dispute deliberation is hold, the minutes 3.1 Approve two power generation facility of the meeting shall be taken every time….” -- this is for operation licenses with a total engine power of 16,614.40 the sake of appropriate wording. HP; one electricity generation license with a total installed 7. The OERC is assigned to revise the draft capacity of 9.90 MW and; one regulated energy production Regulation of the ERC on Criteria, Procedures and license (new application) with a total generator rating of Conditions for the Administration, Maintenance, Utilize and 12,725.00 kVA. Profit Making of Expropriated Immovable Property B.E. ...., 3.2 Approve the issuance of one electricity according to the ERC comments, and to circulate it to the generation license to an operator in the sugar industry, who ERC for consideration. Moreover, the OERC is instructed has operated the business prior to the enforcement of the to conduct a hearing on the revised draft regulation via the Energy Industry Act, with an installed capacity of 10.00MW. OERC website for a period of 15 days, and then present the 4. Instruct the OERC to study the approach to revised draft to the ERC for reconsideration together with improve the criteria and conditions of energy industry that obtained public comments (if any). The issues commented is exempted from the energy industry license requirement, by the ERC are that Article 7, Clause 2, should be amended and submit to the ERC for consideration. by defining the OERC authority and dutypursuant to Section 5. Approve the list of five (5) experts in the following 104, Clause 2, of the Act, which stipulates that “it shall fields: (1) Mr. Sukhon Jiasakul – Public Participation; (2) be the duty of the OERC to administer, maintain, utilize Assistant Prof. Dr. Mongkol Damrongsri -- Environment; and make profit from immovable property expropriated to

122 Annual Report 2011 the state under paragraph one, in accordance with the members representing the civil society sector as follows: criteria, procedures and conditions set forth by the ERC,” those from Map Ta Phut Municipality from 14 persons to and that the OERC should revise the criteria, procedures 15 persons, those from the designated areas in Ban Chang and conditions for the administration and maintenance of Sub-district from three (3) persons to four (4) persons – immovable property under Division1of the draft regulation divided into two (2) from Ban Chang Sub-district Municipality to be more in detail and clearer. and two (2) from Ban Chang Municipality, those from the 8. The OERC is instructed to revise wording designated area in Neun Phra Sub-district from two (2) to in Articles 3 and 4 of the draft ERC Proclamation on three (3) persons (as defined in the proclamation); as for Criteria, Procedures and Conditions for Demarcation of the designated areas in Thap Ma Sub-district and Mab Kha the Protection Zone of an Energy Network System and Sub-district, the number of CDC members shall remain Prohibitions against Certain Actions within such a Zone, one (1) person from each Sub-district. Accordingly, the B.E....., to be clearer and consistent with the intention of the OERC is instructed to carry out necessary steps to issue establishment of such a protection zone and prohibitions and the proclamation pursuant to the aforesaid resolution. to circulate it to the ERC for reconsideration. Moreover, the rd OERC is instructed to conduct a hearing on the revised draft Meeting No. 34/2011 (143 ) proclamation via the OERC website for a period of 15 days, 15 September 2011 and then present the matter to the ERC for consideration together with obtained public comments (if any). 1. Approve, in principle, the provision of opinions on 9. Approve EGAT’s undertaking of exploration or the PEA’s project on the construction of distribution systems surveyof a location for construction of EGAT’s electricity with submarine cables to various islands (Kood Island and transmission system interconnection between Rantau Mak Island in Trat Province), and instruct the OERC to draft Panjang high-voltage substation in Kelantan, Malaysia, a letter notifying the opinions as per the ERC consideration and Su-ngai Kolok high voltage substation in Narathiwat guidelines, for submission to the Minister of Energy, which Province; and authorize EGAT to announce the demarcation is the execution pursuant to Section 11 (5) of the Act. of areas to be surveyed for the 132-kV border (in 2. Approve the issuance of energy industry Narathiwat Province) - Su-ngai Kolok transmission line, operation licenses and other related issues as follows: with a distance of approximately 8.5 km., passing areas 2.1 Approve three power generation facility in Su-ngai Kolok District, Su-ngai Padi District and Waeng operation licenses with a total engine power of 46,867.63 District in Narathiwat Province. The announcement on the HP; two electricity generation licenses with a total installed demarcation of the electricity network system survey areas capacity of 140.60 MW; four regulated energy production will be effective for a period of one year as from the date licenses (renewal) with a total generator rating of 86,500 of announcement. kVA. 10. Approve the revision of the Audit Committee 2.2 Approve the issuance of the Electricity composition as proposed by the OERC, and order to have Industry Operation License to the Electricity Industry one more member added; the ERC Chairman shall select Operator prior tothe enforcement of the Energy Industry the additional person to be appointed Audit Committee Act, consisting of Electricity Generation License, 2 issues, Member. Accordingly, the OERC is assigned to revise the with total installation generation capacity 47.33 MW, The Audit Committee appointment for submission to the ERC Electricity Distribution System License, 1 issue and The Chairman for signature. Electricity Distribution License, 1 issue. 11. Take note of complaints of entrepreneurs 2.3 Approve the composition as well as the who have been affected by the restructuring of Thailand’s authority and duty of the Sub-Committee on Energy Industry electricity tariffs for 2011 - 2015, and instruct the OERC Operation Licensing Screening, pursuant to the Energy to analyze the impactof the policy on 90 – unit electricity Industry Act B.E. 2550 (2007), and approve the draft consumption free – of - charge and the restructuring of order on the appointment of the Sub-Committee. In this Thailand’s electricity tariffs for 2011 - 2015, including the connection, the Sub-Committee is assigned to explore an approach to mitigate such impact, and urgently discuss the approach to trouble shoot the problem relating to submission matter with the ERC. of application for license renewal after the license expiry 12. Approve the review of designated areas and date, for submission to the ERC for consideration. determination of the number of CDC members of the 2.4 Approve the partial merger between Biomass PDF: Map Ta Phut Industrial Estate, Rayong Province, Electricity Co., Ltd. (BECO) and National Power Supply as follows: (1) to adjust the designated areas in Map Ta Public Company Limited (NPS), and deem it appropriate to Phut Sub-district and Huai Pong Sub-district to be Map merge the licenses of BECO and NPS, i.e. the license of Ta Phut Municipality; (2) to increase the number of CDC BECO shall be terminated. Moreover, the two companies

the Energy Regulatory Commission & Office of the Energy Regulatory Commission 123 shall present the evidence of the partial merger, along totaling 100 persons, and the ERC, First Defendant, and with the existing electricity distribution system license Clean Energy 2 Co., Ltd., Second Defendant, for which and electricity retail license, to the OERC to change the Chiang Mai Administrative Court has ordered a temporary information which is of the essence of the licensees, stay of execution according to the Factory Operation License without fee collection from such a merger. This is because (SorRorKor. 5) 02-119/2553, dated 4 March 2010, until a the merger is not prone to lead to a monopoly, or the judgment or an order is given by the court to be otherwise. lessening or restriction of competition in energy service th provision, which is in line with the Regulation of the ERC Meeting No. 35/2011 (144 ) on Establishment of Criteria to Prevent Merger, Competition 23 September 2011 Lessening or Restriction in Energy Service B.E. 2552 (2009). 2.5 Instruct the OERC to send are ply letter to 1. Assign the OERC to consult with the Agricultural EGAT and GHECO - One Co., Ltd, (the Company) with Land Reform Office (ALRO) on the authorization of ALRO regard to the machine test run of the company, as per the land leasing for carrying out the business of power guidelines proposed by the OERC, i.e. the Company and generation from wind energy. If the ALRO has a different EGAT, being contract parties, shall undertake the operation opinion, the OERC shall consult, in writing, the Office of in compliance with the terms and conditions ofthe PPA and the Council of State and present the matter to the Sub- relevant regulations of EGAT. If it is necessary to conduct Committee Regulating Power Purchase from Small Power a test run of the machine, EGAT shall order the Company Producers and Very Small Power Producers for further to present the evidence to show that all measures, as consideration. defined in the EHIA report, have been completely done, 2. Order the OERC to conduct a hearing on especially the prevention of environmental impacts during the guidelines on amending the conditions of customer the machine test run, and shall keep the OERC informed guarantee deposits via the OERC website for a period of both before and after the test run. 15 days. 2.6 Approve the issuance of a natural gas 3. Approve the adjustment to EGAT’s 230-kV transportation license through natural gas system to Uthai Phitsanulok 2- Lom Sak (revised section) transmission line Power Plant, to Gulf JP UT Co., Ltd. After the company route, as opined by the Sub-Committee Regulating Energy has obtained the license (being a licensee), are port on Network Systems and Energy Network System Operatorat the project progress shall be submitted to the ERC on a its Meeting No. 2/2011, on 22 April 2011. In this regard, monthly basis, starting from the selection of the pipeline consideration has been made and it is viewed that EGAT route, construction, including the implementation pursuant has already senta letter requesting the use of the forest area to Division 5 of the Act. In addition, the ERC passes under Section 4 (1) of the Forestry Act B.E. 2484 (1941) to anadditional resolution instructing the OERC to revise the the Phetchabun Governor, and the Phetchabun Province ERC Regulation on Application for License and Permission has sent a written notification to the Director of the Office of for Energy Industry Operation B.E. 2551 (2008), on the part Forestry Resources Management 4, Nakhon Sawan Branch, of determination of general qualifications of applicants for to assign the joint inspection with EGAT Officials following each license type, to be clear. the permission procedures of the Department of Forestry. 3. Authorize EGAT to announce the demarcation 4. Approve the issuance of energy industry of areas to be surveyed for the 500-kV transmission line operation licenses as follows: (1) one power generation from apower plant of Siam Energy Co., Ltd. to Phachi 2 facility operation license with a total engine power of high-voltage substation, with a distance of approximately 10,710.50 HP; (2) two electricity generation licenses with a 15 kilometers, passing areas of Phachi and Uthai Districts total installed capacity of 1,723.198 MW; (3) three regulated in Phra Nakhon Si Ayutthaya Province, and Nong Kae energy production licenses (new application) with a total District in Saraburi Province. The announcement on the generator rating of 72,100 kVA. demarcation of the electricity network system survey areas 5. Provide suggestion on the operation guidelines of will be effectivefor a period of one year as from the date the OERC in determining the criteria for issuing electricity of announcement. generation licenses and power generation facility operation 4. Assign the OERC to send a letter to the licenses, viewing that consideration of PPAs as associated Department of Industrial Works (DIW) to inquire whether information may be necessary for consideration of aproject or not, and how, the DIW wishes to appeal the court order that requests “Adder.” In the short term, the OERC shall rendering a stay of execution according to the Factory notify the PEA to strictly act in compliance with the power Operation License (SorRorKor. 5) 02-119/2553, dated 4 purchase regulations, especially in the case of power March 2010. The OERC shall speedily take action on generation from solar energy. In the long term, the OERC this matter. This lawsuit is the Black Case No. 146/2554, shall determine the criteria for granting electricity generation between Mr. Bunson Wongkhamlue, First Plaintiff, et al. licenses and power generation facility operation licenses

124 Annual Report 2011 to be up to standard, with a similar license processing timeframe. As to an application for an electricity generation license, if a refusal is envisaged or additional consideration criteria are to be applied, the applicant should be informed at the stage of his application for a power generation facility operation license. 6. Approve the review of the designated area and number of CDC members of the PDF: North Bangkok Combined Cycle Power Plant to be in line with the announcement of Bangkok Metropolitan Administration, by adding Wong Sawang Sub-district (Khwaeng), Bang Sue District, Bangkok, to the PDF designated area, with two (2) representatives as formerly determined. Accordingly, the proclamation of the PDF designated area shall be retroactive as from the dateof receipt of the notification from Bang Sue Deputy District Director. 7. Approve the appointment of the Sub-Committee Regulating Power Purchase from Small Power Producers and Very Small Power Producers, with the following authority and duties: to provide comments and suggestions on the guidelines for determining regulations and criteria for electricity procurement, and the preparation of requests for proposals for power purchase from SPPs and VSPPs; to determine the regulatory approach on the selection process, monitor the implementation, inspect and deliberate problems related to the regulation of power purchase from SPPs and VSPPs so that the regulation would be efficient and fair to all parties, in accordance with the regulations and criteria prescribed, for presentation to the ERC for approval. Meeting No. 36/2011 (145th) 28 September 2011 1. Approve the issuance of energy industry operation licenses as follows: (1) one power generation facility operation license with a total engine power of 18,960 HP; (2) two electricity generation licenses with a total installed capacity of 36.74 MW; (3) one regulated energy production license (new application) with a total generator rating of 6,500 kVA. 2. Approve the revised composition of the Sub- Committee on Energy Industry Operation Licensing Screening, pursuant to the Energy Industry Act B.E. 2550 (2007). 3. Acknowledge the progress of the recruitment of Power Development Fund Committees in Designated Areas (the Fund Committees) and the implementation to address complaints received related to the recruitment of the Fund Committees, and approve the proposed resolution to problems arising from compliance with the ERC Regulation on Power Development Fund for Development or Rehabilitation of Localities Affected by Power Plant Operation B.E. 2553 (2010).

the Energy Regulatory Commission & Office of the Energy Regulatory Commission 125 Appendix 2 Summary of the Minutes of Meetings of the Sub-Committees under Section 24 of the Energy Industry Act B.E. 2550 (2007)

1. Sub-Committee Regulating Power Purchase from Small Power Producers and Very Small Power Producers 2. Sub-Committee Deliberating Problems Arising from Compliance with Power Purchase Regulations and Power Purchase Agreements of Small Power Producers and Very Small Power Producers 3. Sub-Committee Regulating Energy Network Systems and Energy Network System Operator 4. Sub-Committee Regulating Energy Tariffs and Service Charges 5. Sub-Committee Monitoring the Project on Thailand Power Tariff 6. Sub-Committee Deliberating Complaints of Stakeholders in the Energy Industry 7. Sub-Committee on Deliberation of Final Decisions, Orders, Regulations, Rules, Proclamations or any other Provisions of the ERC in Fiscal Year 2011 8. Sub-Committee on Deliberation of Appeals for Compensation 9. Sub-Committee on Deliberation of Appeals on an Energy Network System Area 10. Sub-Committee on Investigation of Natural Gas Leakage in the Gulf of Thailand

126 Annual Report 2011 1. Sub-Committee Regulating Power Purchase from Small Power Producers and Very Small Power Producers1

Meeting Attendance Report No. of Attendance/ No. Sub-Committee’s Components Position No. of Meetings 1 Mr. Chongchet Boonkerd Chairman 5/5 2 Mr. Chalit Ruengvisesh Member 4/5 3 Dr. Pallapa Ruangrong Member 4/5 4 Lt. Thaksin Limsuvan Member 5/5 5 OERC Secretary General or Deputy Secretary Member 4/5 General 6 Representative of the Office of the National Member 4/5 Economic and Social Development Board 7 Representative of the Energy Policy and Member 5/5 Planning Office 8 Representative of the Public Debt Member 5/5 Management Office 9 Mr. Bundhit Eua-Arporn Member 3/5 10 Representative of the Department of Member 4/5 Alternative Energy Development and Efficiency2 11 OERC Representative Member and 5/5 Secretary

The Sub-Committee Regulating Power Purchase from Small Power Producers and Very Small Power Producers has held five meetings in Fiscal Year 2011, to screen and provide comments and suggestions on the approach for electricity procurement from Cogeneration SPPs in accordance with the Regulation for the Purchase of Power from SPPs, Using Cogeneration System, under Firm Contracts, B.E. 2553 (2010) (the Regulation), totaling 39 projects, for the purchase during 2015 - 2021, with a total proposed capacity sale of 3,510 MW. In addition, the Sub-Committee has screened and suggested amendment to the Regulation so that the SPPs could successfully develop their projects and could supply electricity into the system as scheduled.

Remarks : 1 The Sub-Committee Regulating Power Purchase from Small Power Producers and Very Small Power Producers was appointed on 24 September 2009. 2 ERC Order No. 33/2552 (3 December 2009) appointed a representative from the Department of Alternative Energy Development and Efficiency as an additional member of this Sub-Committee. the Energy Regulatory Commission & Office of the Energy Regulatory Commission 127 2. Sub-Committee Deliberating Problems Arising from Compliance with Power Purchase Regulations and Power Purchase Agreements of Small Power Producers and Very Small Power Producers 3

Meeting Attendance Report No. of Attendance/ No. Sub-Committee’s Components Position No. of Meetings 1 Mr. Nopadon Mantajit Chairman 6/6 2 Lt. Thaksin Limsuvan 1st Vice Chairman 6/6 3 Mr. Chalit Ruengvisesh 2nd Vice Chairman 6/6 4 OERC Secretary General Member 5/6 5 Representative of the Energy Policy and Member 5/6 Planning Office 6 Mr. Amnat Chotechai Member 5/6 7 OERC Deputy Secretary General Member 6/6 (Mr. Atiluck Attapich) 8 OERC Deputy Secretary General Member 6/6 (Mr. Pornchai Patiparnprechavut) 9 OERC Representative Member and 6/6 Secretary

The Sub-Committee Deliberating Problems Arising from Compliance with Power Purchase Regulations and Power Purchase Agreements of Small Power Producers and Very Small Power Producers has held six meetings in Fiscal Year 2011 to examine and consider problems arising from compliance with power purchase regulations and PPAs of SPPs and VSPPs before presenting to the Energy Regulatory Commission for consideration. Deliberation has been made on problems arising from compliance with power purchase regulations and PPAs, including complaints andappeals regarding purchase of power from SPPs and VSPPs in various aspects, for submission to the ERC for a decision, such as SPPs’ complaints about EGAT’s denial to purchase power, VSPPs’ complaints about PEA’s delay in PPA signing, and VSPPs’ complaints about PEA’s failure to notify outcome of power purchase consideration within the period of time specified in the Regulations for the Purchase of Power from Very Small Power Producers (for the Generation Using Renewable Energy) (2006), and so on.

Remarks : 3 The Sub-Committee Deliberating Problems Arising from Compliance with Power Purchase Regulations and Power Purchase Agreements of Small Power Producers and Very Small Power Producers was appointed on 21 October 2010 (ERC Order No. 50/2553). 128 Annual Report 2011 3. Sub-Committee Regulating Energy Network Systems and Energy Network System Operator 4

Meeting Attendance Report No. of Attendance/ No. Sub-Committee’s Components Position No. of Meetings 1 Mr. Chalit Ruengvisesh Chairman 4/4 2 Mr. Nopadon Mantajit 1st Vice Chairman 4/4 3 Lt. Thaksin Limsuvan 2nd Vice Chairman 4/4 4 OERC Secretary General Member 4/4 5 Representative of the Energy Policy and Member 4/4 Planning Office 6 Representative of the Office of the National Member 4/4 Economic and Social Development Board 7 Mr. Naebboon Hoonchareon Member 4/4 8 Miss Sutharat Angchanpen Member 4/4 9 Mr. Pitsanu Pum-im Member 4/4 10 Mr. Yongyuth Prapasawad Member 4/4 11 Ms. Jittima Mantajit Member 4/4 12 OERC Representative Member and 4/4 Secretary 13 OERC Representative Member and 4/4 Assistant Secretary

The Sub-Committee Regulating Energy Network Systems and Energy Network System Operator has held four meetings in Fiscal Year 2011, to screen and give suggestions on the code on connection to an energy network system, the code on utilization of energy network system facilities, and the code on energy network system operation of a licensee operating the energy network system, pursuant to Section 81 of the Act, for the ERC consideration, such as the Project on Acceleration of Electrification Extension to cover households which still have no electricity, the Distribution System Reliability Improvement Project, Phase 3, of the PEA, provision of support for the implementation of Submarine Cable Extension to Island Project (Kood Island and Mak Island in Trat Province), etc.

Remarks : 4 The Sub-Committee Regulating Energy Network Systems and Energy Network System Operator was appointed on 28 January 2010 (ERC Order No. 6/2553). the Energy Regulatory Commission & Office of the Energy Regulatory Commission 129 4. Sub-Committee Regulating Energy Tariffs and Service Charges5

Meeting Attendance Report No. of Attendance/ No. Sub-Committee’s Components Position No. of Meetings 1 Mr. Nopadon Mantajit Chairman 6/6 2 Mr. Sun Vithespongse6 Member 1/6 3 Dr. Pallapa Ruangrong Member 5/6 4 Mr. Chalit Ruengvisesh Member 6/6 5 OERC Secretary General Member 4/6 6 Representative of the Energy Policy and Member 5/6 Planning Office 7 Representative of the Department of Mineral Member 4/6 Fuels 8 Representative of the Office of the National Member 6/6 Economic and Social Development Board 9 Representative of the Public Debt Member 5/6 Management Office 10 Representative of the State Enterprise Policy Member 6/6 Office 11 Representative of the Office of the Consumer Member 5/6 Protection Board 12 Representative of the Federation of Thai Member 6/6 Industries 13 Representative of the Thai Chamber of Member 5/6 Commerce 14 Representative of the Thai Bankers’ Member 2/6 Association 15 Ms. Puree Sirasoontorn Member 6/6 16 OERC Representative Member and 6/6 Assistant Secretary

The Sub-Committee Regulating Energy Tariffs and Service Charges has held 6 meetings in Fiscal

Year 2011, to examine the proposals on Ft adjustment for three billing rounds in 2011, i.e. January - April, May - August, and September - December, including examining the proposal on natural gas transmission service tariff adjustment, on the partof fixed costs and variable costs, of the onshore natural gas transmission pipeline system at Jana (Zone 4), and giving opinions on the principles of the annual adjustment of natural gas transmission service charges on the part of variable costs as per the PTT’s proposal.

Remarks : 5 The Sub-Committee Regulating Energy Tariffs and Service Charges was appointed on 24 September 2009 (ERC Order No. 25/2552. 6 ERC Order No. 40/2554 (22 August 2011) appointed Mr. Sun Vithespongse as an additional member of thisSub-Committee. 130 Annual Report 2011 5. Sub-Committee Monitoring the Project on Thailand Power Tariff 7

Meeting Attendance Report No. of Attendance/ No. Sub-Committee’s Components Position No. of Meetings 1 Mr. Chalit Ruengvisesh Chairman 9/9 2 Dr. Pallapa Ruangrong Member 9/9 3 Mr. Chongchet Boonkerd Member 9/9 4 Representative of the Energy Policy and Member 7/9 Planning Office 5 Representative of the State Enterprise Policy Member 9/9 Office 6 Mr. Kittipong Pinyotrakool Member 6/9 (Director, Administrative Department) 7 Ms. Narumon Intharak Member and 8/9 (Director, Electricity and Natural Gas Industry Secretary Regulatory Department) 8 Mr. Attanan Jantanawijan 1st Assistant 9/9 (Senior Professional, Electricity and Natural Secretary Gas Industry Regulatory Department) 9 Ms. Omjit Chansakran8 2nd Assistant 0 (Analyst, Administrative Department) Secretary 10 Mr. Wisoot Pongsatorn Advisor 8/9

The Sub-Committee Monitoring the Project on Thailand Power Tariff has held 9 meetings in Fiscal year 2011, to monitor the implementation of the Project Consultant to be in accordance with the regulations and requirements of the Project on Thailand Power Tariff in order to achieve Thailand power tariff structure for the period 2011 - 2015, which came into effect in July 2011.

Remarks : 7 The Sub-Committee Monitoring the Project on Thailand Power Tariff was appointed on 30 April 2010 (ERC Order No. 20/2553). 8 Miss Omjit Chansakran, Analyst, Administrative Department has quit the OERC, effective 1 January 2011 (OERC Order No. 59/2553). the Energy Regulatory Commission & Office of the Energy Regulatory Commission 131 6. Sub-Committee Deliberating Complaints of Stakeholders in the Energy Industry 9

Meeting Attendance Report No. of Attendance/ No. Sub-Committee’s Components Position No. of Meetings 1 Lt. Thaksin Limsuvan Chairman 2/2 2 Mr. Chalit Ruengvisesh 1st Vice Chairman 2/2 3 Dr. Supichai Tangjaitrong 2nd Vice Chairman 2/2 4 OERC Secretary General Member 2/2 5 Representative of the Energy Policy and Member 2/2 Planning Office 6 Representative of the Office of the Council of Member 2/2 State 7 Representative of the Office of the Attorney Member 1/2 General 8 Representative of the Federation of Thai Member 2/2 Industries 9 Representative of the Thai Chamber of Member 2/2 Commerce 10 Mr. Wiwek Jinasiri Member 2/2 11 Mr. Payom Junnoi Member 2/2 12 Mr. Prated Srichomphu Member and 2/2 Secretary

The Sub-Committee Deliberating Complaints of Stakeholders in the Energy Industry is responsible for considering complaints of those who have suffered damage, and providing suggestions on the decision on disputes between those who have suffered damage and the licensees, due to energy industry operation of the latter, as well as providing consultation on energy consumer protection and recommending corrective and improvement measures with regard to energy service provision of the licensees. In Fiscal Year 2011, the Sub-Committee has held two meetings to consider the complaint lodged by P&P apop Co., Ltd., and that on the MEA’s poling and wiring underneath the right-of-way of EGAT’s 230-kV transmission line, Bangkapi – South Bangkok Section, passing through the land of Mrs. Patcharin Tatpayak and Mrs. Sompong Saiyaithong.

Remarks : 9 The Sub-Committee Deliberating Complaints of Stakeholders in the Energy Industry was appointed on 7 October 2011 (ERC Order No. 561/2554). 132 Annual Report 2011 7. Sub-Committee on Deliberation of Final Decisions, Orders, Regulations, Rules, Proclamations or any other Provisions of the ERC in Fiscal Year 201110

Meeting Attendance Report No. of Attendance/ No. Sub-Committee’s Components Position No. of Meetings 1 Mr. Nopadon Mantajit Chairman 7/7 2 Dr. Pallapa Ruangrong Member 7/7 3 Lt. Thaksin Limsuvan Member 7/7 4 Mr. Niphon Hakimi Member 4/7 5 Mr. Kiat Loorungroj Member 7/7 6 Police Major General Jutti Tammanowanich Member 5/7 7 OERC Deputy Secretary General Member 7/7 (Mr. Atiluck Attapich) 8 Mr. Uthai Saeng-ampai Member 6/7 9 Director, Legal Department, OERC Member and 7/7 Secretary

The Sub-Committee on Deliberation of Final Decisions, Orders, Regulations, Rules, Proclamations or any other Provisions of the ERC in Fiscal Year 2011 has held seven meetings altogether to deliberate final decisions, orders, regulations, rules, proclamations or any other provisions of the ERC, including deliberation of appeals against the decisions of Regional Energy Consumer Committees (RECCs).

Remarks : 10 The Sub-Committee on Deliberation of Final Decisions, Orders, Regulations, Rules, Proclamations or any other Provisions of the ERC in Fiscal Year 2011 was appointed on 10 September 2010 (ERC Order No. 45/2553). the Energy Regulatory Commission & Office of the Energy Regulatory Commission 133 8. Sub-Committee on Deliberation of Appeals for Compensation11

Meeting Attendance Report No. of Attendance/ No. Sub-Committee’s Components Position No. of Meetings 1 Lt. Thaksin Limsuvan Chairman 10/10 2 Mr. Chongchet Boonkerd Member 10/10 3 Dr. Supichai Tangjaitrong Member 10/10 4 Representative of the Office of the Attorney Member 10/10 General 5 Representative of the Treasury Department Member 10/10 6 Representative of the Department of Lands Member 10/10 7 Mr. Wiwek Jinasiri Member 10/10 8 Mr. Chen Wipatbawonwong Member 9/10 9 OERC Representative Member and 10/10 Secretary

The Sub-Committee on Deliberation of Appeals for Compensation is responsible for deliberating appeals on compensation or utilization charge for the use of immovable property forenergy industry operation, to be efficient, transparent and fair to energy consumers. In Fiscal Year 2011, the Sub-Committeehas held ten meetings and has considered a total of 217 appeals for compensation in relation to energy network systems, divided into electricity network systems, 72 cases, and natural gas network systems, 145 cases.

Remarks : 11 The Sub-Committee on Deliberation of Appeals for Compensation was appointed on 16 December 2009 (ERC Order No. 35/2552). 134 Annual Report 2011 9. Sub-Committee on Deliberation of Appeals on an Energy Network System Area 12

Meeting Attendance Report No. of Attendance/ No. Sub-Committee’s Components Position No. of Meetings 1 Mr. Chalit Ruengvisesh Chairman 5/5 2 Mr. Nopadon Mantajit Member 4/5 3 Dr. Pallapa Ruangrong Member 4/5 4 Mr. Suttipong Teppitak Member 3/5 5 Mr. Niwet Arunrat Member 4/5 6 Mr. Sa-nguan Tangdechahiran Member 4/5 7 Mr. Suchart Chanlawong Member 4/5 8 Pol. Lt. Col. Siriphon Kusonsinwut Member 5/5 9 Director, Land and Property Management Member and 5/5 Secretary

The Sub-Committee on Deliberation of Appeals on an Energy Network System Area is responsible for deliberating appeals on an energy network system are alodged by owners or occupying persons of immovable property or other right holders, who disagree with the energy network system area. In Fiscal Year 2011, the Sub-Committee has held five meetings. The appeal deliberation for presentation to the ERC can be summarizedas follows: • Deliberation on appeals against energy network system areas, totaling 61 cases • Affirmation of energy network system boundary lines, 56 cases • Adjust/change energy network system boundary lines, 6 cases • Revise energy network system boundary lines, 11 cases • Dismiss appeals objecting to energy network system areas, 21 cases • Dismiss the deliberation on appeals against energy network system areas, 2 cases.

Remarks : 12 The Sub-Committee on Deliberation of Appeals on an Energy Network System Area was appointed on 25 November 2010 (ERC Order No. 56/2553). the Energy Regulatory Commission & Office of the Energy Regulatory Commission 135 10. Sub-Committee on Investigation of Natural Gas Leakage in the Gulf of Thailand 13

Meeting Attendance Report No. of Attendance/ No. Sub-Committee’s Components Position No. of Meetings 1 Mr. Nopadon Mantajit Chairman 4/4 2 Dr. Pallapa Ruangrong 1st Vice Chairman 4/4 3 Mr. Boonsong Kerdklang 2nd Vice Chairman 4/4 4 Mr. Amnat Chotechai Member 2/4 5 Mr. Atiluck Attapich Member 4/4 6 Mr. Pornchai Patiparnprechavut Member 4/4 7 Director, Legal Department Member 4/4 8 Director, Electricity and Natural Gas Member 4/4 Regulatory Department 9 Director, Licensing Department Member 2/4 10 Director, Energy and Environmental Member and 4/4 Engineering Department Secretary

The Sub-Committee on Investigation of Natural Gas Leakage in the Gulf of Thailand is responsible for examining facts related to the incident of natural gas leakage from the offshore natural gas transmission pipeline, Line 1, due to the construction of the offshore natural gas transmission pipeline connecting Plathong Natural Gas Field (Chevron extension) to the offshore natural gas transmission pipeline, Line 3, of the PTT, which occurred on 25 June 2011. In the 2011 fiscal year, the Sub-Committee has held altogether four meetings, concerning acknowledgement of the appointment of a Sub-Committee and acknowledgement of the incident together with the PTT approach to rectify the mentioned incident.

Remarks : 13 The Sub-Committee on Investigation of Natural Gas Leakage in the Gulf of Thailand was appointed on 24 September 2011 (ERC Order No. 50/2554). 136 Annual Report 2011