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Proposal for 5-level retail electricity price list, highest price up to 3,612.22 VND/kWh

Việt NamViệt Nam22/11/2023

The Ministry of Industry and Trade has just issued Document No. 7970/BCT-DTĐL to the Ministry of Justice to appraise the draft Decision of the Prime Minister regulating the structure of the new retail price list for household electricity, replacing Decision 28/2014/QD-TTg in 2014.

The retail price of household electricity as proposed by the Ministry of Industry and Trade is expected to include 5 levels, instead of 6 levels as at present, with the lowest level from 0-100 kWh, the highest from 701 kWh and above. Of which, the electricity price level 5 (for kWh from 701 and above) is proposed to be 3,612.22 VND/kWh. Specifically:

+ Level 1: for the first 100 kWh; electricity price is 1,806.11 VND/kWh

+ Level 2: for kWh from 101 - 200; electricity price is 2,167.33 VND/kWh

+ Level 3: for kWh from 201 - 400; electricity price is 2,729.23 VND/kWh

+ Level 4: for kWh from 401 - 700; electricity price is 3,250.99 VND/kWh

+ Level 5: for kWh from 701 and up; electricity price is 3,612.22 VND/kWh

New household electricity price list ensures minimal impact on electricity users

Based on the design of the levels, the electricity price for each level is redesigned to ensure the minimum impact on electricity users. In particular, the current electricity price for the first level from 0-100 kWh is kept unchanged to ensure stable electricity prices for poor households and social policy households with low electricity usage (accounting for 33.48% of households). The difference in reduced electricity revenue is compensated by households using electricity from 401-700 kWh and over 700kWh. The current electricity price is kept unchanged for levels from 101-200 kWh and 201-300 kWh.

"Electricity prices for levels from 401-700 kWh and from 701 kWh and above are designed to offset revenue for lower levels," the Ministry of Industry and Trade stated.

According to the Ministry of Industry and Trade, the advantage of this plan is that it is simple and easy for people to understand because it reduces the current electricity price structure from 6 levels to 5 levels. In addition, combining the levels together to increase the gap in electricity consumption between levels and widen the gap in consumption of higher levels, in order to reflect the actual situation of electricity consumption and encourage the efficient use of electricity. At the same time, it partly limits the increase in electricity bills during the changing seasons.

The Ministry also believes that the price increase between the levels is reasonable, the difference between the first and last levels is twice, in line with the general trend of countries around the world to encourage the use of electricity economically and effectively through increasing the price difference between the first and last levels.

For example, the difference between the first and last tiers in Southern California, USA is 2.2 times, South Korea is 3 times, Laos is 2.88 times; Thailand is 1.65 times. Households with electricity usage of 710 kWh or less (accounting for about 98% of households) will have to pay less electricity. However, the disadvantage of this option is that households with high electricity usage of 711 kWh/month or more (accounting for about 2% of households) will have to pay more electricity.

Electric vehicle charging at business rates

According to the report and calculation of Vietnam Electricity Group (EVN) and consultants in the Project on improving the structure of retail electricity prices, the current electricity price for production does not accurately and sufficiently reflect the cost of electricity production and business (lower than the allocated cost). The Ministry of Industry and Trade believes that it is possible to immediately apply the electricity price plan for tourist accommodation facilities equal to the electricity price for production to ensure a step-by-step roadmap to accurately and fully calculate the cost for the production customer group.

Accordingly, the revenue shortfall due to the addition of the "tourist accommodation" customer group can be considered to compensate for the off-peak electricity price of the manufacturing customer group by 4% - 8%, compared to the average retail electricity price because the current off-peak price of this customer group is much lower than the average retail electricity price (from 52% - 56%). However, the disadvantage of this option is that manufacturing enterprises will be affected by a price increase of 1.27% - 3.85%, causing adverse impacts on manufacturing industries.

VinFast is covering a network of electric vehicle charging stations on 106 national highways and a series of expressways in Vietnam.

In addition, regarding the electricity price for electric vehicle charging activities, the Ministry of Industry and Trade has studied to add the customer group of electric vehicle charging stations and poles. The structure of the retail electricity price list for electric vehicle charging stations and poles is built on the basis of the electricity price reflecting the production cost that the charging station/pole causes to the power system (option 1).

However, the Ministry also received many different opinions on this issue. Specifically, Vietnam Electricity Group and Vietnam Consumer Protection Association proposed to apply the electricity price for electric vehicle charging activities according to the business price (option 2); the Ministry of Transport and Vinfast Trading and Service Company Limited proposed to apply the electricity price for electric vehicle charging activities according to the production price (option 3).

“The Ministry of Industry and Trade believes that, because option 3 applies retail electricity prices for production for the purpose of charging electric vehicles, it will generate cross-subsidies from other customer groups, so it is not consistent with the policy stipulated in Resolution No. 55-NQ/TW. Therefore, the Ministry of Industry and Trade recommends not considering this option, only considering options 1 and 2 to report to the Prime Minister for consideration, decision, and selection of the applicable option.

According to Nguyen Quynh/VOV.VN


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