An engineer of the Electricity of Vietnam (Photo: tienphong.vn)Hanoi (VNA) – A newdecision by Prime Minister Nguyen Xuan Phuc has given more authority to theState-owned Electricity of Vietnam (EVN), the largest supplier of electricityin the country, in deciding power prices.
According to Decision 24/2017/QD-TTg, signed on June 30, EVN is allowed toraise the average retail price of electricity by 3 percent to less than 5 percentwithout asking permission from the Ministry of Industry and Trade (MoIT).
The hike can be done when there are fluctuations in input prices, such as theprice of coal and gas, or changes in foreign exchange rates, which result inincreases to production costs.
The duration of each hike must last at least six months.
In case of an increase from 5 percent to less than 10 percent but still withinthe permitted price range, EVN must ask permission from MoIT.
When EVN proposes an increase of 10 percent or more, or beyond the permittedprice range, MoIT must cooperate with the Ministry of Finance to examine theproposal.
In case input prices fall, EVN should reduce the retail power priceaccordingly, the decision said.
The decision, which will take effect from August 15, replaces the Decision69/2013/QD-TTg which allowed EVN to raise electricity prices only when there isa need for a hike by at least 7 percent to make up for the increase of inputprices. Moreover, EVN can only do so after receiving approval from MoIT.
The 7-percent floor rate had made EVN unable to adjust retail electricityprices corresponding to changes in input prices, especially when fuel pricesfluctuated, said Nguyen Anh Tuan, head of the Power Regulatory Department underMoIT.
It caused losses to power companies under EVN and made it hard to attractinvestment in the power industry, he said.
Prof Tran Dinh Long, Vice Chairman of Vietnam Electricity Association toldthe Tuoi tre (Youth) newspaper that the new decision solved theproblem but warned that it risked causing instability in the market due to thepossibility of frequent small price changes.
He suggested that EVN should still be required to explain in writing when itwants to increase the price of power, even in the range where permission is notrequired.
Another official who was involved in power price regulation also suggested theGovernment build a mechanism enabling consumer monitoring of power prices toavoid sudden increases.-VNA
According to Decision 24/2017/QD-TTg, signed on June 30, EVN is allowed toraise the average retail price of electricity by 3 percent to less than 5 percentwithout asking permission from the Ministry of Industry and Trade (MoIT).
The hike can be done when there are fluctuations in input prices, such as theprice of coal and gas, or changes in foreign exchange rates, which result inincreases to production costs.
The duration of each hike must last at least six months.
In case of an increase from 5 percent to less than 10 percent but still withinthe permitted price range, EVN must ask permission from MoIT.
When EVN proposes an increase of 10 percent or more, or beyond the permittedprice range, MoIT must cooperate with the Ministry of Finance to examine theproposal.
In case input prices fall, EVN should reduce the retail power priceaccordingly, the decision said.
The decision, which will take effect from August 15, replaces the Decision69/2013/QD-TTg which allowed EVN to raise electricity prices only when there isa need for a hike by at least 7 percent to make up for the increase of inputprices. Moreover, EVN can only do so after receiving approval from MoIT.
The 7-percent floor rate had made EVN unable to adjust retail electricityprices corresponding to changes in input prices, especially when fuel pricesfluctuated, said Nguyen Anh Tuan, head of the Power Regulatory Department underMoIT.
It caused losses to power companies under EVN and made it hard to attractinvestment in the power industry, he said.
Prof Tran Dinh Long, Vice Chairman of Vietnam Electricity Association toldthe Tuoi tre (Youth) newspaper that the new decision solved theproblem but warned that it risked causing instability in the market due to thepossibility of frequent small price changes.
He suggested that EVN should still be required to explain in writing when itwants to increase the price of power, even in the range where permission is notrequired.
Another official who was involved in power price regulation also suggested theGovernment build a mechanism enabling consumer monitoring of power prices toavoid sudden increases.-VNA
VNA
