Putting EVN's losses into electricity prices: 'Hundreds of mulberry leaves' fall on electricity users?

giá điện - Ảnh 1. — Energy experts say it is necessary to clarify the causes of losses and ensure transparency before allocating them to electricity prices - Photo: T.PH.

Previously, in the draft Decree 72 (amended) regulating the mechanism for adjusting average retail electricity prices that was just put out for comments, the Ministry of Industry and Trade proposed to include EVN's losses in the electricity price to allow the recovery of direct costs for electricity production and supply that have not been calculated.

The information disclosed is still not transparent.

Speaking to Tuoi Tre, Dr. Nguyen Huy Hoach - an expert from the Scientific Council of the Vietnam Energy Association - said that Decree 72 had just been issued by the Government and took effect on March 28, just a few months earlier. However, the advisory body for drafting the decree, the Ministry of Industry and Trade, had not calculated and evaluated all issues related to the pricing structure, and raised the issue of EVN's losses.

"Although the decree has only been in effect for nearly 5 months, it has had to be amended, with the proposed basis stemming from EVN's losses, including losses in electricity production and business costs and exchange rate losses, as the basis for amending the pricing structure... is not convincing," Mr. Hoach emphasized.

Although he supports the full accounting of reasonable and valid direct costs that increase electricity prices... to ensure the business efficiency of EVN and the electricity industry, and ensure the security of electricity and power sources. However, Mr. Hoach suggested that the Ministry of Industry and Trade should inspect and announce the specific causes of EVN's losses.

"Only when the specific causes leading to EVN's losses given by the Ministry of Industry and Trade are convincing to electricity users, will the amendment of regulations to legalize EVN's losses be agreed upon by the people," Mr. Hoach said, adding that although the Ministry of Industry and Trade annually announces the cost of electricity production and business of EVN, the published information still does not ensure transparency and clarity.

Citing the structure of power sources, Mr. Hoach acknowledged that the proportion of coal-fired power sources has increased and the cost of coal-fired power generation has increased due to times when world coal prices fluctuated. However, about 25-30% of the source structure is still hydropower with low costs, so it can help offset the cost of electricity. Therefore, the explanation of input fluctuations due to world coal and fuel prices is not really convincing.

According to Mr. Hoach, electricity is a monopoly industry when EVN still produces more than 30% of electricity and plays a major role in electricity transmission and distribution. While previously, electricity prices have been continuously adjusted up three times in a row since 2023, now it is proposed to be accounted for in other expenses with a loss of more than 44,000 billion VND, which will raise doubts and consumers will feel that it is not transparent.

"Customers need to be explained more clearly what factors caused the loss, subjective or objective, was it due to slow price adjustment, input price fluctuations, or unreasonable investment, or inappropriate operational management?", Dr. Hoach asked.

giá điện - Ảnh 2. — According to experts, low-cost hydropower still accounts for 25 - 30% of the power source structure - Photo: NAM TRAN

Need to clarify the causes of losses

Speaking to Tuoi Tre, Mr. Ha Dang Son - Center for Energy and Green Growth Research - said that amending the regulations in Decree 72 is necessary to ensure clarity on the costs included in electricity prices. In particular, the costs directly serving the production, transmission, supply and distribution of electricity have not been fully offset in the retail price, along with the cost of the revaluation exchange rate difference that has not been allocated.

This is to ensure that reasonable and valid costs are fully compensated and preserved, develop state capital at EVN, as well as ensure the development of the electricity industry and national energy security. However, Mr. Son said that the proposal to "count all" losses into electricity prices while the group has not yet had a report and a full explanation of the causes of the losses is "unsatisfactory".

"The cost structure of electricity production and business is calculated based on factors including production, transmission, distribution of electricity, industry management service costs... Among these factors, the cause of loss for EVN has not been clearly separated, whether it is subjective cause, objective cause due to price management policy or due to inadequate management factors," said Mr. Son.

However, according to experts in the energy sector, EVN's losses are reported to be due to fluctuations in input material prices, high electricity production and business costs such as coal prices, gas prices, high costs of purchasing electricity sources, and unallocated exchange rate losses. Electricity production and business costs have also been accumulated for many years.

Meanwhile, electricity prices were not adjusted in a timely manner, causing EVN's losses to increase, especially in the 2022-2023 period. However, other costs such as power loss rate, distribution factors, transmission and unreasonable management and operation causing losses in the electricity industry have not been clarified.

Specifically, according to Mr. Son, in EVN's audited financial report, specific items with related costs have not been clarified, which factors increase costs compared to the production and business plan, which factors have been optimized and reduced. For example, during this period, EVN supported people with electricity bills due to the impact of the COVID-19 epidemic, or how fluctuations in raw material prices caused losses...

"It is necessary to clarify more to allocate costs reasonably, directly impacting the cost of electricity production on the average retail price of electricity. If it is due to power loss, unreasonable operating costs, poor management, then we must find ways to adjust, restructure... and also accounting for losses to allocate to electricity prices is not reasonable," said Mr. Son.

Are the costs of electricity production and supply not fully calculated?

According to the Ministry of Industry and Trade, the mechanism for adjusting the average retail electricity price is being implemented according to Decree 72. However, this Decree needs to be amended and supplemented to allow the recovery of costs directly related to electricity production and supply that have not been fully calculated and compensated in the previous average retail electricity price.

Citing EVN's report, the Ministry of Industry and Trade said that due to the impact of the global geopolitical situation, the cost of purchasing electricity increased in the period of 2022 - 2023, causing EVN to face many difficulties in production and business activities with the accumulated loss of about 50,029 billion VND in these two years. By 2024, the accumulated loss of the parent company EVN will still be about 44,792 billion VND. Therefore, if not calculated for recovery in the electricity price, it will not be able to promptly compensate for the decrease in state investment capital in previous years.

Previously, EVN also proposed that the Ministry of Industry and Trade report to the Government to allow the calculation of accumulated losses, and costs directly serving the production and supply of electricity that have not been calculated and compensated in the average retail electricity price to be included in the retail electricity price.

EVN's business management costs increase

According to the 2024 financial report published by EVN, the group recorded an accumulated loss of VND 45,374 billion, down 10% compared to the previous year, thanks to the recording of after-tax profit of VND 5,237 billion in 2023. Most of EVN's accumulated losses were formed in the period 2022 - 2023, with losses of VND 26,498 billion and VND 23,529 billion, respectively.

Analysis of the business results report shows that in both the most loss-making years, the parent company EVN fell into a situation of selling below cost price, meaning that revenue could not cover costs. For example, in 2023, revenue reached VND 405,466 billion, while the cost of goods sold reached VND 433,173 billion, nearly 7% higher. Similarly, in 2022, EVN's revenue reached VND 373,187 billion, while the cost of goods sold was nearly 8% higher.

Entering 2024, EVN recorded revenue of VND 479,835 billion and cost of goods sold of VND 470,910 billion. Therefore, EVN had a positive gross profit of VND 8,924 billion compared to the same period of negative VND 27,707 billion. As a result, the parent company EVN reported a profit after tax of VND 5,237 billion, while the same period of the previous year had a huge loss. It can be seen that after increasing the electricity price, EVN's gross profit from electricity sales has improved significantly to more than VND 46,400 billion.

Therefore, EVN still recorded a consolidated pre-tax profit of VND9,436 billion, despite the decrease in profits from associated companies and financial revenue, while sales and administrative expenses increased. Specifically, in 2024, EVN's sales expenses reached VND7,308 billion, an increase of nearly 11% compared to 2023. Meanwhile, administrative expenses increased by more than VND930 billion, to VND15,734 billion.

NGOC AN - BINH KHANH

Source: https://tuoitre.vn/dua-khoan-lo-cua-evn-vao-gia-dien-tram-dau-do-dau-nguoi-dung-dien-20250818235606732.htm