High electricity bills push every Cambodian to the brink of despair

• Apr 05, 2022

Even as the temperature in Cambodia soars, many people are reluctant to use air conditioners for the fear of getting a higher monthly electricity bill. So much so, even industry leaders are looking forward to getting some favourable approach from the government to compete with different players in the region

Actuary Rajivan has been living in Phnom Penh for the last two months, and he pays between $30 to $40 for electricity. He does not use an AC at home, relying only on a ceiling fan and natural ventilation. Rajivan uses a washing machine and a refrigerator as well. His peer, Alex, pays almost $100 per month on electricity with some AC usage. Both spend most of their time at work, only returning home to rest.

Given the warm weather in Phnom Penh, many who are not acclimatised are left with little choice but to depend on air-conditioners which reportedly bumps up the electricity bill.

“If you are frugal with AC usage and don’t depend much on microwave ovens, electric kettles and stoves or water heaters, you can save a lot on your bill. I don’t turn on the air-con at home and keep electricity usage to a bare minimum. But my bill still comes up to an average of $40 to $50 per month,” says a Malaysian, who has been residing and working in Phnom Penh for the past two years.

According to cable.co.uk, Cambodia ranks 102 as the most expensive country in terms of electricity per kilowatt.

Last year, the public was promised a lower electricity tariff by installing the electricity regulator for households and enterprises in Phnom Penh and several provinces.

Yim Viseth, chairman of the Electricity Authority of Cambodia told Khmer Times that the government has decided to lower the cost of electricity for consumers in industry and agriculture.

He explained that there are currently four types of electricity tariffs for households. It costs 380Riels/kWh from 1kWh to 10 kWh of monthly consumption, 480 Riels/kWh for a monthly consumption from 11kWh to 50 kWh, 610 Riels/kWh for a monthly consumption from 51kWh to 200 kWh and 730 Riels/kWh for a monthly consumption that exceeds 200 kWh.

Industrial and agricultural consumers and Commercial and Administration consumers pay between $0.1370/kWh to $0.17232/kWh.

On plans by the government to further lower the price to attract more foreign investors, he said it was under the purview of the MME. “For EAC, we calculate the tariff according to the actual cost and government policy. So, for 2022, the tariff has been already fixed.”

When asked about the high tariffs compared to neighbouring countries such as Malaysia and Vietnam, he clarified that every country wants lower tariffs, including Cambodia. He said the tariff is fixed according to the real cost and government policy and not in comparison with other countries.

Prime Minister Hun Sen also talked about the government’s decision to bring down electricity costs while speaking at the launch of the Lower Sesan II hydro project last year.

According to Geraldine Adolh, CEO, American Hardwood Flooring Co, “It makes investment for manufacturing operations more expensive in Cambodia than its neighbours for more energy-intensive industries. As a result, it also creates an arbitrage opportunity allowing imported products to flood the market at a lower cost, putting domestic operations out of business, reducing opportunities and employment in Cambodia.”

Fabric mills consume significantly more power than garment factories.

Ken Loo from the Garment Manufacturer’s Association of Cambodia, said, “A further drop in electricity tariffs will enable us to attract other upstream and downstream industries that are more dependent on electricity.

“The government could consider this as an investment that would yield a higher return in the form of more jobs and more taxes when business and industry prosper. If the price of electricity could drop significantly to be on par with Vietnam’s, it will also help promote investment in local fabric mills, as Cambodia now imports almost all of its fabrics,” he said.

Reducing tariffs would require introducing much larger facilities that can generate 350-500 megawatts of power.

It has been reported that under the plan, electric tariffs for the industrial sector will be lowered to 595 riel in 2019 and 592 riel by 2020 for Phnom Penh. Currently, electric tariffs stand at 676 riel in Phnom Penh and 672 riel in provincial areas. For administrative users, tariff charges will drop to 640 riel in 2019, from 676 riel in Phnom Penh and 672 riel in provincial areas.

Households consuming between 1-10 kilowatt hour per month will see a drop in tariffs to 380 riel in 2019 from 480 riel per kWh. Those consuming between 11-15 kWh per month will pay 480 riel per kWh, down from 610 riel currently. Households that use 51-200 kWh per month will pay 720 riel in 2019 and 610 riel in 2020, compared to 770 riel currently, while those who use more than 200 kWh per month will pay 610 riel in 2019 and 2020, compared to 720 riel earlier.

Last year, government spokesman Phay Siphan had said Prime Minister Hun Sen had asked concerned officers to move quickly to introduce the new, cheaper electricity prices.

Speaking to Khmer Times, Chairman of the Electricity Authority of Cambodia Yim Viseth said the government has decided to lower the cost of electricity for consumers in industry and agriculture. “We had come out with a new list before for the electricity tariff for 2020 and had consulted with other stakeholders, but the new list was killed because the government had decided a new tariff for industry and the agriculture sectors,” Yim said.

At present, in Phnom Penh and Takhmao city, households that consume more than 201 kilowatts an hour (kWh) per month pay electricity tariffs of 740 riel ($0.185). However, for families that use less than 50 kWh, the price of electricity is 480 riel ($0.12) per kWh, while for those who use from 51 kWh to 200 kWh, the price will be 610 ($0.15).

For commercial, agriculture and industrial enterprises operating in the capital and in Takhmao, the cost of electricity will also fall. For example, medium-sized enterprises that use EDC’s transformers have tariffs of 718 riel ($0.1470) per kWh. In addition, for large enterprises or heavy industries, the electricity tariff is $0.1590 per kWh.

People and companies in provinces like Kampong Speu, Preah Sihanouk, Takeo, Kampot, Battambang, Banteay Meanchey, Siem Reap, Prey Veng, Kampong Cham, Tboung Khmum, Kratie, Stung Treng, Mondulkiri, Preah Vihear and Ratanakiri will also enjoy lower tariffs.

Lun Yeng, secretary-general of the Cambodian Rice Federation, which has more than 300 mills, said that lowering the price of electricity would boost production and maintain competitiveness in the rice sector. “Some millers paid an average of between $30,000 and $40,000 a month. This will also help reduce production costs,” he said.

Meanwhile, Undersecretary of State of the Ministry of Mines and Energy, Victor Jona, told Khmer Times that Cambodia is reviewing its electricity tariff yearly. “The policy to review the electricity tariff had already begun in 2015. We have been reducing the tariff every year, except for 2020 and 2021, when there was lower demand and a surplus in power supply,” he said.

“Also, the tariff depends on electricity cost, which depends on resources to generate power. It is now 300 per cent costlier than it used to be,” he said, explaining that coal price, which used to be $80 for one tonne, now costs $200, which is imported from Indonesia.

He said Cambodia is also looking at ways to increase hydropower usage to cater to its demand for energy. “Currently, hydropower represents fifty percent of our total power generation,” he said.

Senior Minister Ly Thuch said that even though it did not come under his purview, he said it was not uncommon knowledge that there are simply insufficient electricity power plants. “There has been remarkable progress in Phnom Penh, but it is yet to reach the provinces. The aim now for Cambodia is to have better electricity in all villages in two to three years,” he said.

Source: https://www.khmertimeskh.com/501052317/high-electricity-bills-push-every-cambodian-to-the-brink-of-despair/