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Government sticks to plan on power price cuts ahead of election

A worker installs new electricity lines in Phnom Penh in July 2014. Heng Chivoan
A worker installs new electricity lines in Phnom Penh in July 2014. Heng Chivoan

Government sticks to plan on power price cuts ahead of election

Officials appeared to walk back a promise to issue larger-than-average electricity price reductions ahead of July’s elections, instead following a previously announced plan to make small reductions in costs.

Ty Norin, chairman of the Electricity Authority of Cambodia (EAC), released a statement earlier this month announcing a modest cut in electricity prices, dropping prices by up to 20 riel, or less than $0.01, per kilowatt hour (kWh) for some residential users. The cuts are set to take effect in April.

Norin’s announcement comes on the heels of a statement he made last month promising a price cut greater than previous years, after he was urged by Mines and Energy Minister Suy Sem to consider a deeper reduction. Sem suggested a price cut could garner support for the ruling Cambodian People’s Party ahead of July’s national elections.

But the recently announced cuts, which were first detailed in the EAC’s five-year plan in 2015, are the same cuts referred to by the minister, according to Victor Jona, a spokesman at the Ministry of Mines and Energy. Jona said he was unaware of any additional planned cuts.

“This [plan for price reduction] is what we have considered since 2015,” he said yesterday, adding that electricity costs had been declining slightly for the past three years. “The decrease in electricity prices this year has been made in accordance with our clear-cut annual plan.”

Commercial and industrial enterprises will see a smaller drop in electrical costs than most residents, with prices dropping by less than 2 riel, or $0.0004, per kWh, according to Norin’s statement.

While Jona acknowledged that the reduction in electricity costs for commercial enterprises was small, he said the effect of the price cuts would be felt over time.

“If we compare the decline of electricity price year-on-year, we see it is slight, but if we see the trend for the last several years there is a significant decrease,” he said, adding that for those industries consuming the greatest amount of electricity in the Kingdom, prices had fallen by up to 350 riel, or $0.09, per kWh since 2010.

Private firms have often urged the government to seek ways to lower its electricity prices, which are higher than regional neighbours and viewed as a deterrent to potential foreign direct investment.

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