Electricity prices will be calculated like telephone charges.

Việt Nam•05/11/2024

The two-component electricity pricing mechanism will be piloted for the manufacturing sector in 2024 and expanded in 2025 when the legal framework and conditions for implementation are fully met.

The adoption of electronic electricity meters will help implement a more effective two-component electricity pricing system - Photo: T.HIỆP

Vietnam Electricity Group (EVN) has just proposed to the Ministry of Industry and Trade a mechanism and roadmap for implementation. electricity prices two components.

Accordingly, the two-component electricity price will include both the price per capacity and the price per energy, meaning the amount payable for the registered capacity and the actual energy consumed, instead of being calculated solely based on actual electricity consumption as is currently the case.

Test before mass implementation.

The project categorized customers into three groups: non-residential customers, residential customers with consumption above 2,000 kWh/month, and residential customers with consumption below 2,000 kWh/month.

In addition, voltage levels that are priced include ultra-high voltage, high voltage, medium voltage, and low voltage, which are also classified.

Specifically, non-residential customers will share a two-component electricity tariff based on capacity (VND/kW) and peak/off-peak electricity prices (VND/kWh). These are the three groups: production, business, and public services in the current pricing system.

Residential customers with a consumption volume exceeding 2,000 kWh/month will be treated like non-residential customers but using low-voltage electricity. Statistics show that this group comprises up to 56,000 customers, so equipping them with a two-component metering system is not feasible in the immediate future.

Therefore, a two-component pricing scheme could be considered, applied to households with consumption below 2,000 kWh/month, meaning a fixed price based on a package and a constant electricity price.

For customer groups with low consumption output (

This group has a large customer base. Meanwhile, the group of customers consuming less than 50kWh/month is still receiving government support. Therefore, the consumption scale for calculating fixed prices is currently being structured according to the existing tiered pricing system.

The classification of these objects is considered a reference for the representation system. retail electricity prices Two key components for Vietnam in the coming period.

Therefore, implementation requires a specific roadmap in stages. This process is accompanied by thorough preparation of metering infrastructure, especially issues related to... legal framework and the media.

According to EVN's proposal, the pilot program will initially be applied to typical and efficient households belonging to the group of large electricity consumers (as defined in Decree 80/2024 on the mechanism of direct electricity purchase and sale). During this phase, the electricity sector and customers will continue to use the current pricing system to calculate electricity bills.

The results of the two-component pricing scheme will serve as internal control during testing, providing a basis for summarizing lessons learned and making appropriate adjustments before official implementation.

Fair and equitable

Speaking to Tuoi Tre newspaper, Associate Professor Tran Van Binh, an electrical expert from Hanoi University of Technology, said that building and promptly applying a two-component electricity pricing system is necessary to ensure that electricity users pay only for the system's costs, avoiding a one-size-fits-all pricing system.

In principle, the two-component electricity price will consist of a capacity price (fixed capacity registered by the customer) and an energy price (the actual amount of electricity used, calculated at a flat rate). Therefore, the more electricity is used, the lower the price will be. Calculating electricity prices based on long-term marginal costs – that is, the cost of electricity production – is also appropriate.

"This aims to accurately reflect the amount of electricity used at each point in time. For example, users during off-peak hours, when costs are low, will only have to pay a lower price. But if they use electricity during peak hours, when the system generates electricity at a higher cost, they will have to accept paying a higher price," Mr. Binh said.

Mr. Nguyen Minh Duc, from the Legal Department of the Vietnam Chamber of Commerce and Industry (VCCI), argued that applying a two-component electricity pricing system is similar to calculating the cost of a fixed-line telephone. Accordingly, users would have to accept paying a "monthly subscription fee" that would be charged even if they didn't use electricity, thus representing a payment for the fixed investment costs of the electricity sector.

The remaining amount is calculated based on the actual electricity consumption, similar to how you only pay for a phone call based on the actual minutes used. "Therefore, this method of calculating these two components more accurately reflects the costs that the electricity industry incurs to supply electricity to each customer, including line costs and electricity costs. This method of calculating the bill is also fairer among customers," Mr. Duc affirmed.

However, experts also believe that a roadmap for implementation is needed and should be carefully considered based on feedback from affected parties, experts, and scientists.

According to Mr. Binh, the two-component electricity pricing system is a new pricing mechanism and Vietnam has no precedent for its application. Therefore, before implementing it, even on a pilot basis, it is necessary to widely consult with scientists and consumers.

Similarly, Mr. Duc also suggested that, initially, a pilot program could be implemented in certain areas and for specific customer groups, focusing on new customers, to provide a basis for evaluation and subsequent expansion.

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