The financial reports of a power company : Part 5 Date : 12 January 2026 ## 9. Classification of maintenance expenses versus capital expenditure - Company incurs substantial costs for maintenance and upgrades of distribution and transmission assets, alongside large capital projects. - The accounting policy and practical criteria for distinguishing between capital expenditure (capitalised as PPE) and operating maintenance expense are not described in sufficient detail, despite the material impact on current‑period profit via depreciation timing. **Audit concerns** - Whether there is an aggressive tendency to capitalise borderline expenditures, thereby deferring expense recognition. - Whether sample testing of work orders, contracts and approval documents supports the chosen classification on a consistent basis. *** ## 10. Other income and one‑off gains from asset disposals - In certain years, “other income” and gains from sale or transfer of assets provide a noticeable contribution to net profit, but the nature, counterparties, and commercial rationale of these transactions are not fully explained in the notes. - This reduces transparency regarding the sustainability of earnings and whether such transactions are recurring or one‑off in nature. **Audit concerns** - Whether these asset disposals or transfers are at fair value and at arm’s‑length, especially where counterparties are related parties or government entities. - Whether any arrangements bundle operational or financial concessions that are not clearly disclosed, potentially masking economic substance. End—————————————————————————————————————————————————— #FinancialAudit #PowerCompany #Thaitimes #ManagerOnline #News1

The financial reports of a power company : Part 4 Date : 11 January 2026 ## 7. Debt structure, interest expense and loan covenants - A company ’s long‑term borrowings and debentures are restructured or refinanced during 2022–2024, but the average effective interest expense does not rise in line with market rate increases, especially in 2023–2024. - Disclosures of loan covenants and key financial ratios required by lenders are limited, which obscures the extent of covenant pressure and the potential incentives to manage reported numbers. **Audit concerns** - Whether interest expense is fully recognised in accordance with the effective interest method, including amortisation of premiums, discounts and transaction costs. - Whether any accounting choices (e.g. capitalisation of borrowing costs, classification of leases) are influenced by a need to avoid covenant breaches. *** ## 8. Employee benefit obligations and actuarial assumptions - Defined benefit obligations and other long‑term employee benefit liabilities show relatively limited volatility across 2022–2024, even though discount rates and inflation expectations change materially with the interest‑rate cycle. - This stability may indicate the use of actuarial assumptions that dampen the impact of market movements on reported obligations and OCI. **Audit concerns** - Whether actuarial assumptions (discount rate, salary growth, mortality, staff turnover) are consistent with market benchmarks and internal HR data. - Whether sensitivity analyses and disclosures provide sufficient transparency regarding the potential impact on equity and profit if assumptions were more conservative. To be continued—————————————————————————————————————————————————- #FinancialAudit #PowerCompany #Thaitimes #ManagerOnline #News1

The financial reports of a power company : Part 3 Date : 10 January 2026 ## 5. Financial assets, fair value measurement and investment returns - Balances of financial assets and investments (debt and equity instruments, short‑term placements) fluctuate over 2022–2024, but interest income and fair value gains/losses do not fully align with the strong upward shift in market interest rates during this period. - This raises questions about the appropriateness of fair value measurement, classification (e.g. amortised cost vs FVOCI vs FVTPL) and timing of recognition of unrealised losses. **Audit concerns** - Whether fair value hierarchies, valuation techniques, and inputs are properly applied and disclosed. - Whether any losses have been deferred through classification choices or reliance on internal valuation models rather than observable market data. *** ## 6. Derivative instruments and hedge accounting - A company uses certain derivative instruments for risk management, yet the profit and loss effects of derivatives do not consistently track underlying risk factors (interest rates, FX) in some periods. - Disclosures on hedge relationships (hedged items, hedging instruments, hedge ratios, and effectiveness testing) are not sufficiently detailed to allow independent assessment of hedge effectiveness. **Audit concerns** - Whether the designation and documentation requirements for hedge accounting have been fully met, and whether any instruments are in substance speculative rather than hedging. - Whether hedge ineffectiveness is properly measured and recognised in profit or loss. To be continued——————————————————————————————————————— #FinancialAudit #PowerCompany #Thaitimes #ManagerOnline #News1

The financial reports of a power company : Part 2 Date : 9 January 2026 ## 3. Capital projects that do not yet generate commensurate benefits - Several major infrastructure and system projects recognised as assets in 2022–2023 do not appear to yield clearly observable incremental revenues or cost savings in the 2023–2024 results. - These assets continue to be carried at cost without impairment charges, despite technology changes and regulatory developments that could affect expected cash flows and utilisation. **Audit concerns** - Whether management has performed robust impairment testing (under TFRS) for projects with delays, cost overruns, or under‑utilisation. - Whether the business cases, IRR/NPV assumptions and demand forecasts used to justify capitalisation remain valid under current economic and policy conditions. *** ## 4. Trade receivables and allowance for doubtful accounts / ECL - Trade and other receivables remain high and increase in some years, while the allowance for doubtful accounts and expected credit loss (ECL) does not increase in proportion to the exposure and macro‑economic conditions. - Disclosures on aging profiles, major customers, and high‑risk groups are limited, making it difficult to assess the true credit quality of the receivables portfolio. **Audit concerns** - Whether the ECL model parameters (PD, LGD, forward‑looking overlays) are sufficiently conservative and reflect the impact of customer support schemes, payment moratoriums, or economic slowdown. - Whether management judgement has been used to keep impairment charges low in order to support reported profit. To be continued————————————————————————————————————————————————— #FinancialAudit #PowerCompany #Thaitimes #ManagerOnline #News1

The financial reports of a power company : Part 1 Date : 8 January 2026 ## 1. Revenue and profit trends versus cost environment - Company ’s core operating revenues show only modest growth over 2022–2024, while gross profit and operating profit do not decrease in line with the sharp increase and subsequent volatility in fuel and power purchase costs during the same period. - This pattern suggests that profit figures may appear “smoother” than would be expected given the external cost pressures, raising concerns about possible use of classification, timing, or presentation of income and expenses to stabilise reported earnings. **Audit concerns** - Whether revenue recognition and expense classification policies have been applied consistently, or selectively adjusted to maintain stable profit margins. - Whether there are any year‑end manual adjustments or reclassifications (e.g. moving items to “other income”) that significantly affect operating profit. *** ## 2. Property, plant and equipment and construction in progress - The carrying amounts of property, plant and equipment (PPE) and construction in progress (CIP) increase significantly over 2022–2024, reflecting large capital expenditures in network and system projects. - However, depreciation expense does not rise proportionately with the growth in PPE balances, especially in 2023–2024, which may indicate extensions of useful lives, changes in residual values, or delayed capitalisation/commissioning decisions that reduce current‑period expenses. **Audit concerns** - Whether useful lives, residual values and depreciation methods have been revised in a manner that is adequately supported and disclosed, or primarily to reduce depreciation expense. - Whether CIP projects are tested for impairment or re‑assessed for capitalisation criteria when there are delays, scope changes, or lower‑than‑expected economic benefits. To be continued————————————————————————————————————————————— #FinancialAudit #PowerCompany #Thaitimes #ManagerOnline #News1

Strategic Roadmap for Liberalizing Thailand’s Electricity Distribution Market : Part 7 Date : 7 January 2026 ### 10) Policy Decision Points To move decisively, the Energy Ministry should make (and publicly communicate) five clear decisions: 1. Thailand will keep distribution networks as regulated infrastructure, but open them under nondiscriminatory access rules. 2. MEA/PEA will transition to neutral DSO roles with performance-based incentives. 3. Retail competition will be phased, starting with large customers tied to investment competitiveness and clean procurement needs. 4. Sandbox pilots (including P2P concepts) will be scaled only through standardized market rules and digital settlement infrastructure. 5. Social policy will be protected through explicit, transparent mechanisms—not hidden cross-subsidies. End—————————————————————————————————————————————————— #DistributionMarketReform #Thaitimes #ManagerOnline #News1

Strategic Roadmap for Liberalizing Thailand’s Electricity Distribution Market : Part 6 Date : 6 January 2026 ### 8) A Sequenced Implementation Roadmap **Year 1 : Rulemaking + accounting separation** - Finalize enforceable TPA rules and standard contracts consistent with Thailand’s direction toward TPA development. - Require MEA/PEA accounting separation and publish cost allocation methods. - Stand up a compliance function for nondiscrimination monitoring. **Years 2–3 : Large-customer contestability + functional separation** - Enable large customers to choose suppliers/retailers and contract via TPA-enabled arrangements. - Implement functional separation and staff/process firewalls. - Launch a central switching/settlement platform for eligible customers. **Years 4–6 : Expansion to SMEs and households** - Scale switching and consumer protections. - Formalize aggregator participation and flexibility markets informed by sandbox learnings. - Introduce provider-of-last-resort and tighter retail conduct regulation. ### 9) Risks and Mitigations - **Risk: Cost shifting and tariff shock** - Mitigation: Transparent social tariffs funded explicitly; gradual reform; periodic tariff rebalancing. - **Risk: “Cream skimming” of profitable customers** - Mitigation: Universal service obligations; network charge design; POLR mechanism. - **Risk: Discrimination by incumbents** - Mitigation: Functional separation, audits, penalties, and transparent performance reporting. - **Risk: Reliability degradation due to poor settlement rules** - Mitigation: Strong imbalance settlement, technical standards, retailer credit requirements. To be continued————————————————————————————————————————————- #DistributionMarketReform #Thaitimes #ManagerOnline #News1

Strategic Roadmap for Liberalizing Thailand’s Electricity Distribution Market : Part 5 Date : 5 January 2026 ### 6) Pillar D — Build the Digital Market Layer (From Sandbox to System) Thailand has explored peer-to-peer (P2P) concepts and sandbox experimentation, showing technical feasibility but also illustrating why pilots cannot scale without rules for settlement, consumer protection, and network charging. Public information on P2P-related initiatives (including utility-supported pilots) reinforces that technology is not the main barrier—market design and regulation are. **Recommended digital architecture:** - **National energy data access standards**: Define who can access meter data, under what consent, cybersecurity, and privacy conditions. - **Central settlement and switching platform**: A neutral platform that processes switching, validates meter data, calculates network charges, and settles imbalances. - **DER aggregation rules**: License aggregators to pool rooftop solar, batteries, EV chargers, and flexible loads to provide services. - **(Optional) Renewable attribute tracking**: If policy wants credible green procurement claims, implement certificates/attributes with auditable rules. This digital layer enables competition beyond “selling kWh”—it creates a market for flexibility, reliability services, and customer-centric products. ### 7) Reliability and Investment: Recasting MEA/PEA as DSOs A reformed market must strengthen—not weaken—grid operations. The future-facing role for MEA/PEA network arms is the **Distribution System Operator (DSO)**: actively managing DER, congestion, voltage, fault response, and hosting capacity. To support this, shift regulation toward **performance-based incentives**: - Reward reductions in technical losses, outage duration, and connection times. - Reward DER hosting capacity and timely interconnections. - Penalize poor service quality and discriminatory behavior. This aligns utility incentives with modernization and public value, while allowing competitive retailers and service providers to innovate. To be continued—————————————————————————————————————————————————— #DistributionMarketReform #Thaitimes #ManagerOnline #News1

Strategic Roadmap for Liberalizing Thailand’s Electricity Distribution Market : Part 4 Date : 4 January 2026 ### 4) Pillar B — Unbundling to Remove Conflicts of Interest (Without Privatizing the Grid) Even with a TPA code, monopoly power can persist if the incumbent controls both the network and the retail relationship. The practical solution is **unbundling**—not necessarily ownership separation at the outset, but immediate accounting separation and staged functional separation. **Stage 1: Accounting separation (Year 1)** - Separate regulated network costs (capex, opex, depreciation, losses) from competitive retail and service costs. - Prohibit cross-subsidies and require cost allocation audits. **Stage 2: Functional separation (Years 2–3)** - Create independent management, performance metrics, and “Chinese walls” between the network operator and any affiliated retailer. - Establish compliance obligations and penalties for discrimination. This approach maintains public ownership while removing the incentive and ability to self-preference. It also makes tariff reform and investment planning more credible to both customers and investors. ### 5) Pillar C — Retail Competition (Phased Contestability That Protects Households) Retail competition should be introduced in phases, because the capability requirements (metering, settlement, consumer protection) expand dramatically when households are included. **Phase 1: Large customers (Years 1–2)** - Allow customers above a threshold (e.g., >1 MW or a defined annual consumption) to choose licensed retailers and/or contract via Direct PPA using TPA. - Focus on industrial zones, data centers, and export-oriented manufacturing where clean-energy procurement and price-risk management are urgent. Thailand’s Direct PPA policy discussion has already highlighted targeted early-use cases, making this phase aligned with current direction. **Phase 2: SMEs (Years 2–4)** - Introduce simplified contract templates, standardized disclosure formats, and default service options. - Encourage retailers to offer bundled services: demand response, energy efficiency, EV fleet charging optimization. **Phase 3: Households (Years 4–6)** - Enable switching for households only after: 1) wide smart-meter coverage (or equivalent interval data capability), 2) strong complaint/dispute channels, 3) clear rules against predatory pricing and misleading marketing, 4) a robust “provider of last resort” (POLR) mechanism. In all phases, MEA/PEA should retain (or a designated entity should retain) a regulated default supply obligation to ensure continuity and social protection. To be continued—————————————————————————————————————————————————— #DistributionMarketReform #Thaitimes #ManagerOnline #News1

ขอบคุณ Thaitimes ที่ให้พื้นที่ในการแสดงผลงานทางวิชาการเพื่อปรับปรุงสังคมให้ดีขึ้น ขอบคุณ Manager online #DistributionMarketReform #Thaitimes #ManagerOnline #News1

Strategic Roadmap for Liberalizing Thailand’s Electricity Distribution Market : Part 3 Date: 3 January 2026 2) Guiding Principles for Reform A reform package must be anchored to a few principles that prevent liberalization from becoming either symbolic or harmful: - **Neutrality**: The network operator must not favor its affiliated retailer (or legacy supply arm) over competitors. - **Cost-reflectiveness with protection**: Wheeling and network tariffs should reflect costs, while social policy (lifeline tariffs, targeted subsidies) should be transparent and funded explicitly. - **Reliability first**: New entrants must meet technical and commercial standards; settlement and imbalance rules must protect the system. - **Consumer choice with safeguards**: Switching must be easy, billing must be clear, and dispute resolution must be strong. - **Scalable digital infrastructure**: Data access, smart metering, and settlement systems are the “market plumbing” that make competition real. 3) Pillar A — Third-Party Access as the Foundation (Move from Pilot to Rule) Thailand’s direction toward Third-Party Access and Direct PPA mechanisms indicates a policy pathway to allow qualified parties to move electricity across existing networks under regulated terms. The immediate need is to convert “permissioned exceptions” into a predictable, bankable rulebook that supports investment and competition. **Key design requirements:** - **Standardized connection and use-of-system rules**: Clear timelines, technical requirements, and standardized contracts for interconnection and wheeling. - **Transparent wheeling charges**: A published methodology that is stable enough for long-term contracting and investment decisions. - **Non-discriminatory access and information symmetry**: The network operator must provide the same queue management, outage information, metering access, and processing speed to all parties. - **Imbalance and settlement rules**: A workable mechanism to handle deviations between contracted and actual consumption/generation—especially critical as variable renewables and DER increase. A strong TPA framework also enables corporate decarbonization strategies by allowing a customer to match consumption with contracted clean generation under enforceable delivery and settlement rules. Thailand’s evolving Direct PPA framework discussions make this a timely priority for investment competitiveness. To be continue———————————————————————————————————————————— #DistributionMarketReform #Thaitimes #ManagerOnline #News1

Strategic Roadmap for Liberalizing Thailand’s Electricity Distribution Market: Part 2 Date: 2 January 2026 Detailed Strategy 1) The Strategic Problem: Monopoly-by-Area in a System Becoming Competitive Thailand’s distribution structure is a classic case of “monopoly by territory.” While distribution wires often remain a natural monopoly, the **sale of electricity and energy services** is no longer inherently monopolistic. Technology has changed the cost curve: rooftop solar, behind-the-meter storage, smart inverters, EV charging, and energy management software increasingly enable customers to optimize consumption and even provide grid services. In this environment, geographic retail monopoly can become a barrier to innovation, a brake on clean energy procurement, and a source of persistent inefficiency. The central policy objective, therefore, should not be “breaking up the wires.” It should be **opening access to the wires** while ensuring reliability, fair cost allocation, and universal service. The question is how to accomplish this without destabilizing MEA/PEA finances, undermining cross-subsidies that protect vulnerable users, or introducing regulatory arbitrage. To be continued—————————————————————————————————————————————————— #DistributionMarketReform #Thaitimes #ManagerOnline #News1

Strategic Roadmap for Liberalizing Thailand’s Electricity Distribution Market: Part 1 Date: 1 January 2026 Thailand’s electricity distribution sector is effectively organized as two geographically exclusive retail-distribution monopolies: the Metropolitan Electricity Authority (MEA) serving Bangkok, Nonthaburi, and Samut Prakan, and the Provincial Electricity Authority (PEA) serving the other provinces. This structure delivered reliability and scale in an era of centralized generation and predictable demand growth, but it now creates economic and strategic constraints in a power system increasingly shaped by distributed energy resources (DER), corporate decarbonization requirements, and digitalization. At the same time, Thailand is beginning to experiment with market-opening mechanisms—most notably the emerging Third-Party Access (TPA) framework and a direct power purchase agreement (Direct PPA) pathway that would allow certain customers to contract for electricity supply while using existing networks. Thailand’s draft/advancing TPA code discussions and the evolving Direct PPA framework signal a policy direction toward selective liberalization, but they remain limited in scope and must be designed carefully to prevent discrimination, cost shifting, and reliability risks. This report proposes an “Open Grid, Open Market” roadmap that preserves national ownership and public-interest obligations of distribution networks, while introducing regulated competition in supply and value-added energy services. The core reform is to separate (functionally and in accounting) the “wires business” from the “energy retail business,” so that MEA/PEA (or their network arms) operate as neutral Distribution System Operators (DSOs) providing nondiscriminatory access to all qualified retailers, aggregators, and prosumers. Four pillars define the strategy: 1. **Neutral network access via enforceable TPA**: Establish nondiscriminatory, transparent access to distribution networks with standardized connection, metering, settlement, and wheeling charges; align this with the evolving TPA code direction. 2. **Unbundling to remove conflicts of interest**: Implement accounting separation immediately and functional separation on a defined timeline to prevent self-preferencing and cross-subsidies that can entrench monopoly power even after “market opening.” 3. **Retail competition (phased contestability)**: Start with large customers and special economic zones, then expand to SMEs and households once metering, billing, and consumer protections are mature. 4. **A digital market layer for DER and P2P**: Scale learnings from sandbox pilots toward a regulated platform for aggregation, peer-to-peer trading, flexibility services, and transparent renewable attribute tracking (where policy chooses to adopt it). Thailand’s P2P trading discussions and sandbox-related materials illustrate both feasibility and the need for rules to move from pilots to an economy-wide framework. If executed with discipline, these reforms can (a) lower total system costs through competitive procurement and demand-side flexibility, (b) accelerate clean-energy investment by enabling corporate procurement and DER participation, and (c) improve service quality by shifting utility incentives toward reliability, efficiency, and modernization rather than volume-based retail margins. The transition must be carefully sequenced so that universal service, affordability, and grid stability improve—not erode. To be continued—————————————————————————————————— #DistributionMarketReform #Thaitimes #ManagerOnline #News1