"Not changing the average retail tariff"
In October 2022, the Ministry of Industry and Trade sent the new electricity retail tariff schedule draft to ministries, agencies and local authorities for their comments. Regarding the tariff schedule for daily household use, the Ministry of Industry and Trade proposed lessening from six levels of prices to five levels or four levels.
In reply to VietNamNet, Mr. Tran Viet Hoa, Director of the Electricity Regulatory Authority of Vietnam (Ministry of Industry and Trade), said that among the comments sent to the Ministry of Industry and Trade, 92.2% proposed choosing option 1 (from six levels down to five levels and changing the proportion compared to the average retail tariff). Only 7.8% proposed choosing option 2 (from 6 levels down to four levels and changing the proportion compared to the average retail tariff).
Five-level option
Four-level option
According to the representative of the Electricity Regulatory Authority of Vietnam, the current retail electricity tariff schedule designed as level-based is simple to apply but meets the goal of promoting the economical and efficient use of electricity. At the same time, it ensures the State's social security policy by applying low prices for the first levels in order to support households with low and medium electricity consumption levels.
"Although the adjustment of the electricity retail tariff schedule for daily household use does not change the average retail tariff, some customers will have to pay more for their electricity bills. On the contrary, some customers will pay less than their bills according to the current tariff at different levels, subject to levels of electricity consumption of customers", the leader of the Electricity Regulatory Authority of Vietnam shared.
Energy expert Ha Dang Son, Director of the Center for Energy Research and Green Growth, in his comments on the draft, analyzed: With the five-level option, households using less electricity will benefit more when compared to the current retail electricity tariff. Those who consume electricity from 700kWh or more will have to pay more.
The electricity tariff schedule should be amended in an early manner
At the 2022 review conference, Vietnam Electricity (EVN) made recommendations to the Prime Minister to promptly approve the amendment of Decision No. 28/2014/QD-TTg dated April 7, 2014, on the retail electricity tariff schedule structure.
In fact, for many years, the Ministry of Industry and Trade has proposed several new draft retail electricity tariff schedules but has not been able to issue them because of many fiercely controversial comments.
According to the Ministry of Industry and Trade, the change in the structure of the retail electricity tariff schedule would have a big impact on households using electricity for daily life, especially poor, low-income households with low or moderate electricity usage levels. Therefore, there should be thorough studies, assessments and analyses in place and it would take time.
Therefore, in October 2022, the Ministry of Industry and Trade arranged to acquire comments from agencies under the National Assembly; relevant ministries, bodies, associations and organizations; People's Committees of provinces and centrally-run cities, on options to improve the retail tariff structure.
The Ministry of Industry and Trade has been reviewing comments from ministries, agencies and local authorities on options to improve the retail tariff structure, so as to coordinate with the Ministry of Finance and relevant agencies to finalize the draft decision to amend and supplement Decision No. 28/2014/QD-TTg in accordance with the Law on Promulgation of Legal Documents.
Mr. Nguyen Tien Thoa, Chairman of the Vietnam Price Appraisal Association, stated that: The current retail electricity tariff schedule has been promulgated since 2014, over many years of implementation, it has brought into play many positive effects. However, since electricity production and supply conditions, consumption structure and people's income have changed, the current 2014 tariff schedule is no longer relevant to the new situation.
According to this expert, the current six-level retail electricity tariff for daily household use makes it difficult for the authorities to manage and consumers to oversight. The level of reflecting electricity production and business costs as well as the structure of electricity consumption are no longer appropriate.
“We need to improve the electricity retail tariff schedule to overcome shortcomings of the current one, ensuring that the new and improved tariff schedule will be simpler, more transparent for being managed and monitored. At the same time, it will put stronger pressure on the economical and efficient use of electricity," commented Mr. Nguyen Tien Thoa.