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VietNamNews

Power hikes follow huge losses

Update: September, 14/2015 - 09:25

Tran Viet Ngai, chairman of the Viet Nam Energy Association, spoke to Nong thon Ngay nay (Countryside Today) about the price of electricity.

Do you think it is the right time for the Ministry of Industry and Trade (MOIT) to revise the retail electricity price?

Viet Nam National Coal - Mineral Industries Corporation (VIINACOMIN) and Viet Nam Oil and Gas Corporation suffered huge losses because of the increase in value of the US dollar. They have asked the government to help them to recover their losses by increasing the retail electricity price.

If all these losses are transferred to the electricity price, the average electricity retail price will increase considerably. We have to consider the MOIT's proposal seriously so that it will not shift the burden to consumers.

However, in my opinion, it is time for Viet Nam to revise the retail electricity price as in 2016 a national pilot project to launch a competitive wholesale electricity market (VWEM) will be launched.

Please explain why we have to revise the retail electricty price before the introduction of the VWEM pilot project?

When we introduce the VWEM, Electricity of Viet Nam will no longer be the sole buyer of electricity from power plants. Therefore various players will join the market. Power plants will compete against each other through their prices. So will distributors. They will also have to improve their service quality.

To prepare for this, the Electricity Regulatory Authorities of Viet Nam (ERAV) have done everything to ensure competitiveness and transparent prices. At present ERAV has worked closely with concerned agencies to revise the Prime Minister's Decision 69 which was approved in 2013 regarding average electricity retail prices.

Amendments to Decision 69 will focus on four areas, namely, the retail price must be in conformity with the ERAV proposal; the price must cover future input market variables, including fuel, exchange rates and others; all expenses relating to the purchase of electricity in the wholesale market will become an input factor to determine the retail price; poor households or social beneficiary households will still enjoy government subsidised electricity for lighting.

Please explain the proposed price list that the EVN will introduce?

The current price list developed by the EVN is divided into six scales progressively. As a result, the electricity bills of many households have increased by 1.5 to 3 times. This has caused anxiety among the population.

The MOIT has a plan to shorten the progressive scales with hopes to bring more benefits to consumers and allow electricity companies to improve their management.

I'm confident low income households will benefit a lot from the new progressive scales in their electricity bills.

Have you got any hints on the average electricity price that the MOIT will introduce?

Frankly speaking, until now I had no idea what the MOIT's plan was. But before setting the new electricity price, the MOIT will consult with the public. As I have mentioned above, the increase in electricity price will affect production and the general public. And the government has asked all concerned agencies to caculate carefully before contributing their ideas. The ultimate objective is to have reasonable retail prices of electricity. — VNS

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