A new pricing and taxation scheme for customers of Electricite du Cambodge (EDC) will deliver lower tariffs to industrial and commercial power consumers, EDC announced in one of a pair of ads carried in the local media on Wednesday.
The ads were intended to clarify Monday’s announcement of a new value-added tax (VAT) on EDC power, which drew criticism from Cambodian business and manufacturing groups that claimed the new rates would only stifle industries already hampered by the high cost of energy.
Though the new tariffs may help commercial consumers, ordinary Phnom Penh residents fear that the sharp rise in monthly electricity rates they will face if the VAT is imposed could push them from their already-tenuous economic foothold.
In a notice dated January 26 and printed in several local newspapers, including the Post, EDC wrote, “As part of the ongoing effort ... to reduce electricity tariffs for the commercial and industrial customers, we are pleased to announce that starting from February 2010, the current electricity tariffs will be further reduced.”
EDC would not specify the new range of tariffs for the various types of commercial consumers on Wednesday, but Theng Marith, director of the electricity regulations department at the Electricity Authority of Cambodia (EAC), the government agency that sets tariff policy for EDC, confirmed that the new tariffs would be scaled to benefit businesses.
“The prices have fallen to a better rate. For some [commercial] customers, the cost [of the electricity] is higher than the tariff,” he said.
Ty Thany, director of the finance and price-setting department of the EAC, said that the reported tariff increases for Phnom Penh households were accurate.
“From February 2010, households using less than 50 kilowatt-hours per month, who once paid 390 riels (US$0.09) per kilowatt-hour, will be charged 610 riels ($0.14) per kilowatt-hour, and those using more than 50 kilowatt-hours per month will be charged 720 riels($0.17),” he said.
“In EDC’s coverage area, 25,000 households receive electricity, while 100,000 remain without it. We not only want to eliminate government subsidies, but also want to pay for expanding the reach of our grid. This is why we’ve set the new tariff where it is. Those 25,000 customers may not be satisfied, but 100,000 more will have electricity.”
But some of EDC’s Phnom Penh customers said they were more worried about solvency than satisfaction.
“The money we can earn in a day just barely covers expenses,” said Tol Phall, a bag vendor at the Central Market who lives in Russey Keo district.
“If the price goes up, where will we find the money to pay? During this crisis we haven’t been selling so well.”
Tol Phall said that even under the current price she was forced to reduce her power consumption from over 100 kilowatt-hours per month to between 50 and 60 per month because of poor sales.
EDC has scheduled a meeting for February 3 in Phnom Penh to bring together concerned parties to discuss the tariff and explain its position.