The Deputy Minister of Industry and Trade said that if the household electricity price is reduced by 5 levels, only households using more than 711 kWh, equivalent to 2% of total customers, will have to pay an increase in electricity bills.
According to the Prime Minister's draft Decision on the structure of retail electricity prices, household electricity prices are still designed in a ladder but have been shortened from 6 to 5 levels. The price at the highest level (701 kWh or more) is more than 3,612 VND per kWh, excluding VAT.
At the regular Government press conference in November on the afternoon of December 6, Deputy Minister of Industry and Trade Do Thang Hai mentioned the need to maintain the regulation on electricity prices according to the ladder because of the special nature of this commodity, which is simultaneous production and consumption, and storing electricity is costly.
According to the pricing plan proposed by the Ministry of Industry and Trade, the electricity price for levels 1-5 is calculated at 90-180% of the average retail price of VND2,006.79 per kWh (adjusted from November 9). Thus, the lowest price (level 1) is about VND1,806 per kWh and the highest (level 5) is VND3,612 per kWh. These prices do not include VAT.
The five-tiered utility price plan, Mr. Hai said, will reflect costs, i.e., allocate costs to each group of customers; helping to limit part of the increase in electricity bills during the changing seasons. The difference between tiers 1 and 5 is two times, in line with the general trend of the world to encourage the use of electricity economically and efficiently.
Households that use less than 710 kWh of electricity per month, about 98% of households using electricity, will have to pay less for electricity. Conversely, households that use more electricity, over 711 kWh per month, accounting for about 2% of households using electricity nationwide, will have their electricity bills increase when the price list is changed.
Mr. Do Thang Hai, Deputy Minister of Industry and Trade, answered at the Government press conference on the afternoon of December 6. Photo: Nhat Bac
In addition, the tiered electricity price will encourage people to use electricity economically. Currently, many countries in the region and the world also apply a similar price list to Vietnam. "The tiered electricity price is simple to apply, but also relatively suitable for Vietnam's conditions," said Mr. Hai.
Commenting on the retail electricity price list, many experts recommended that Vietnam consider applying a two-component electricity price (capacity and electricity consumption). Explaining at today's press conference, Deputy Minister Do Thang Hai said that this is a new mechanism that needs to be carefully researched and tested to avoid affecting groups of electricity users. Some countries are applying a two-component electricity price but only for the production group.
"The Ministry will study and propose a two-component trial application with a number of manufacturing customers, to have a basis for calculating the average retail electricity price, as well as assessing the cost impact on electricity customers," Deputy Minister Hai added.
According to the draft new price structure, electricity prices for production and business customers are still calculated based on low and high hours. Mr. Hai commented that this mechanism is still suitable, optimizes system operation and ensures incentives for households to use electricity economically.
Deputy Minister Hai analyzed that the power system always has a difference in electricity demand between low and peak hours, so there must be a large reserve. Some factories are invested to operate only during peak hours, have few operating hours, so the price is high, making it difficult to operate the power system, increasing power loss.
Therefore, during peak hours, to have enough capacity, the power system must mobilize gas turbine plants, high-priced oil. To reflect the actual production costs, the peak hour price is higher than normal or off-peak hours.
“If peak prices are not applied during peak hours of the system, the system's capacity demand will increase even more, leading to difficulties in supplying electricity during peak hours,” said Mr. Hai.
In addition, applying a time-of-day retail electricity price also encourages customers to shift a portion of their peak-hour usage and production to off-peak, normal hours. That is, they will save costs, and the power system will reduce the load during peak hours, reducing the pressure on capital investment in building new power sources.
According to VNE
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