Gov’t Defends New Pricing Scheme on Electricity, Says Public

Government officials yesterday defended their decision to raise electricity prices for residents living in Phnom Penh and other provinces, saying the new tariff hikes were necessary if electrical coverage is to expand further in the country.

Although the government announced a price hike for thousands of ordinary residents on Jan 25, electricity costs for commercial and industrial customers as well as for foreign embassies, NGOs, foreign residents and international institutions were reduced from Feb 1.

Ith Praing, secretary of state for the Ministry of Industry, Mines and Energy, called on the public whose power bills will increase to shoulder the financial burden gracefully, adding that their increased charges will go toward funding the electric grid’s expansion.

“We request the 30,000 customers in Phnom Penh city to share the charge for those who don’t have electricity,” Mr Praing said while speaking at a seminar on electricity pricing yesterday in Phnom Penh.

According to information released yesterday by the Electricity Authority of Cambodia, 48,000 households are currently without access to the electricity supply on the outskirts of Phnom Penh and Kandal province.

In Kandal province and Phnom Penh city the price of electricity for those using less than 50 kilowatt-hours per month is now charged at 610 riel per kilowatt-hour, up 56 percent from the previous price of 390 riel. According to government officials, the 390 riel tariff was only made possible because of a large subsidy paid for by Electricite du Cambodge, which had kept the price of power artificially low. Those that use more than 50 kilowatts of electricity per hour now pay 720 riel per kilowatt-hour, up from the previous amount of 610 riel.

Government officials yesterday blamed the rising international price of oil, as well as the government’s decision to charge a 10 percent value added tax on utilities, for the rise in electricity prices.

Keo Rottanak, director general for the state-owned EdC, said that with less than 25 percent of the population with access to electricity, more money was needed in order to expand electricity coverage. Mr Rottanak said that the EdC had not abandoned the poor, who are paying the most through the new pricing schemes.

“We will do what we can to help real poor people…get a cheaper price of electricity soon,” he said, adding that additional power coming from hydropower dams and coal-fired plants would help increase the coverage over the coming years.

Ty Norin, general director of the Electricity Authority of Cambodia, said the money the EdC’s garners from the new tariffs will be used to help expand the electricity coverage.

“We will share the money we get from the new tariff to help those who don’t have electricity,” he said.

The UN Development Program said last week that the hike in prices would put extra financial pressure on the urban poor.

 

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