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Wednesday, 1 July 2009

Koh Samui Electricity Costs

In these troublesome economic days it is worth looking at how money can be saved in running your home. Apart from the “green – environmental” issues, which I do not dismiss but are not the theme of this article, it is what can be done to reduce monthly running costs? The main bill we get on a monthly basis is for electricity and often the one that produces the highest number of complaints, particularly on managed developments. Taking your electrical supply direct from the Provincial Electricity Authority (PEA) for single phase supply the basic charge depends on your contract. Because many properties are owned under company names the supply rate is that of a Small Business. As most people use more than 150 kWh per month there is in practice no difference to the Residential Rate. Usage as measured by the meter is then multiplied by the appropriate rate and to this is added a fuel cost factor – this varies from time to time based on the cost of production such as oil prices – and is currently 0.9255 Baht per unit. Add VAT @ 7% and that is the total bill. Fairly basic stuff.

For an average bill the gross unit rate will work out at between about 3.30 and 3.60 Baht per unit. Many developments and some individual houses have 3-Phase supply. This is calculated in pretty much the same way but the bill is more complicated because there are different readings for Peak Hours and Off Peak Hours supply yet for most properties the rate is the same unless an option for “Time of Use” metering has been taken, but once taken you cannot switch back to Normal Rate metering. The current basic rate for Normal Use is Baht 2.4649/unit. Added to this is a Service Charge of Baht 228 a fuel surcharge - 0.9255 Baht per unit and VAT. The final unit rate works out at about Baht 3.75.

Why then people ask do managed developments often charge higher unit prices? There are a couple of reasons for this. The main one is the loss on distribution. Power is transmitted to the main transformer on site and then distributed to the various properties. Between the transformer and the properties there will be a loss. The transformer may receive say 1000 kWh but the total measured in the property meters may only show 950 kWh. The difference is the distribution loss and needs to be apportioned between the properties. So, one property may show a meter reading of say 200 kWh which at Baht 3.30/kWh would cost 660 Baht but also has to share 200/1000 of 50 kWh or an additional 10 Baht increasing the unit charge to 3.35/kWh.
There are other charges which often come into the equation. Transformers need maintenance and these costs are frequently allocated as a cost on the electricity bill. Whether they are allocated as a proportion of properties supplied or apportioned according to usage is a matter for the management contract. The wires from the transformer may also need attention from time to time and these costs need to be apportioned as well. Transformers and wiring do have life spans and at some time will need replacing so it is not unusual to see a sinking fund built in to the costs to provide future capital for renewal.

Finally there is a cost for the management of these issues. Someone has to check the meters, calculate the bills and collect the money. This is usually provided for as a percentage of the total bill.

Different projects carry out these allocations in different ways. Some include the costs as described above whilst others separate out managements and sinking funds costs. It is therefore important to know how these costs are dealt with in the management or service contract that is signed on purchasing a property.

Reverting to how I started this article. Identifying the big energy users in your home and controlling them sensibly can make a big difference to your energy bills. There are obvious savings to be made by controlling the use of air conditioning both in the hours it is run and the temperature it is set at. Surprisingly a not so obvious high user of power is a pool pump which can easily use 1,500 kWh per year which alone can add Baht 500 a month to your bill. Reducing the cycle time for the pump to the minimum required to keep the water clean can save money. Refrigerators are the next biggest user of electricity so minimising the time the door is left open will help. Simple things such as leaving the television on standby will use about 5kWh per month. The table top water boilers seen everywhere are extremely inefficient in normal use as they continually boil water even when not required. Energy saving lights benefit in operating at a lower temperature so reducing cooling requirements but also produce the same amount of light using far less power – 20-30% less than standard light bulbs. The initial costs are greater but with lifetimes of 8 to 15 times standard incandescent light bulbs they have significant cost benefits. They are not however trouble free. They do not re-act well to being switched on and off in a short space of time and this can lead to a significantly shorter lifespan – as much as an 85% reduction. These bulbs also contain Mercury which can complicate their safe disposal.

Saving money or just being “Green” – it is up to you.

Another comment on Foreign Exchange. Buy Baht here. In the last month I have checked the exchange rates being offered by UK banks and the Post Office against rates quoted by the banks here. As an example on 12th June the Post Office was offering Baht 52.3653 for one Pound and Nat West would only have given you Baht 50.4410. Siam Commercial Bank would have given Baht 54.58875 for notes and Baht 55.57 for Telegraphic Transfers.

A visiting land Officer in Phuket made a rather controversial statement that Thai Spouses owning land on behalf of their foreign husbands was not allowed and in such cases the land title would be with drawn. This obviously caused alarm which was unnecessary as the statement was made in clear contravention of a Supreme Court Ruling in 1999 that provided the funds used to purchase the land were solely the property of the Thai spouse then such ownership was legal. This is why a joint declaration to that effect is required where land is being purchased by a Thai spouse. Further clarification has been made by the Land Office and is reproduced below confirming this.

And property prices continue to fall! If you check our web site and look at the Hot Press Offers you will see a great number of properties with prices that have been reduced from between 15% and 50% with an average reduction of 34%. These reductions are now beginning to produce sales and, although still not many, there are a few more buyers around than there were a few weeks ago. NEW REDUCTIONS EVERY MONTH!

If you would like to receive the full monthly Newsletter, or require advice on acquiring property in Thailand please send me an email at hbonning@kosamuiproperties.com

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