Ministry of Home Affairs: Power system control center should follow the business model

The Ministry of Industry and Trade proposed separating A0 from EVN, operating as an administrative unit, but the Ministry of Home Affairs said that A0 should be "an enterprise".

Vietnam Electricity (EVN) owns more than one-third of the electricity generation sources, and manages and operates the entire electricity transmission and distribution system. Meanwhile, the National Power System Dispatch Center (A0) is a dependent accounting unit of EVN. Separating A0 from the group aims to clarify the interests between the electricity seller and buyer.

A0 operates the transmission and distribution of electricity to ensure the safe and stable operation of the power system. This unit is also responsible for operating power plants; exploiting and regulating reservoirs; and handling incidents in the 500 kV power system. The separation of A0 from EVN was stated in the 2017 Decision on restructuring the electricity sector but has not been implemented.

Giving comments to the Prime Minister on June 18, Minister of Home Affairs Pham Thi Thanh Tra said that transferring A0 to the Ministry of Industry and Trade is in line with policies to move this unit to operate independently, without sharing interests with the electricity seller and buyer.

However, the operation of this center should be a LLC, which will be suitable for the management and operation of the electricity market according to the market mechanism, instead of an administrative unit as previously proposed by the Ministry of Industry and Trade. In addition, there is currently sufficient legal basis for A0 to operate under the enterprise model according to the Enterprise Law and the Law on Management and Use of State Capital Invested in Production and Business at Enterprises.

"A0 operates under the model of a one-member LLC, which will have the conditions to attract high-quality human resources, meet the requirements of the national power system dispatching task and be consistent with the price and fee management mechanism," the Minister of Home Affairs commented.

A0 engineers operate the national power system. Photo: EVN — A0 engineers operate the national power system. Photo: *EVN*

If after being separated from EVN to the Ministry of Industry and Trade, A0 operates under the model of a public service unit, it will be very difficult to attract personnel, and this conversion will be entangled in many legal regulations on organizational structure, policy mechanisms, bidding, and price management. Not to mention, as a public service unit, A0 will not separate business functions from state management, and will not meet the development roadmap of this center.

This conversion also helps facilitate the operation of the market mechanism in the relationship between the national power system dispatching unit and the power generation unit, power transmission unit, and power distribution unit according to the provisions of the Electricity Law.

The Minister of Home Affairs proposed that the Prime Minister direct the Ministry of Industry and Trade and the State Capital Management Committee at Enterprises to complete the plan to transfer A0 from EVN to the Ministry of Industry and Trade and develop a project to convert A0 into a Limited Liability Company for Power System and Electricity Market Operation under the Ministry of Industry and Trade.

A0 will work with the electricity regulatory agency (under the Ministry of Industry and Trade) to manage the electricity market. This is to overcome current shortcomings in electricity market management.

Previously, to avoid disruption of human resources, leading to risks in the stable, safe and efficient operation of the power system, the Ministry of Industry and Trade proposed a special financial mechanism to maintain salaries and allowances equivalent to those currently enjoyed by dispatch engineers. The average salary of engineers at the National Power Dispatch Center is 40 million VND per person per month.

The Ministry of Industry and Trade also wants to have a suitable roadmap to transfer the current assets and personnel of A0 from EVN to the Ministry and propose amending regulations related to the charter of organization and operation of EVN; tasks, powers and organizational structure of the Ministry.

The National Power System Dispatch Center (A0) was established in 1994, responsible for dispatching the power system and operating electricity market transactions.

EVN is currently under inspection for its electricity supply, in the context of frequent power outages in Hanoi and other northern provinces since early June. The average electricity consumption nationwide reached nearly 820 million kWh per day in May, an increase of more than 20% compared to April. In Hanoi alone, the average electricity consumption in May was more than 75.4 million kWh, an increase of 22.5% compared to April. By June 8, the average consumption reached more than 85.6 million kWh.

Mr. Minh

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