The date for applying the two-component electricity price has not yet been finalized

At a seminar in April, a leader of Vietnam Electricity Group (EVN) said that the group is reporting to the Ministry of Industry and Trade to soon pilot two-component electricity price mechanisms this year, before implementing them. on a large scale from 2025. However, according to EVN’s latest report just sent to the Ministry of Industry and Trade, the roadmap for implementing this new calculation has not yet been determined.

Vietnam is applying the price of one ingredient, which means payment according to the output used. This calculation method is considered to not accurately reflect the costs spent by the electricity industry (depreciation of assets, lines, transformer stations…) for each customer. With two-component prices, calculated based on consumed output and registered capacity, customers will pay separately for each kW of capacity they register monthly with the supplier. When not in use, they still have to pay this cost, instead of the electricity industry paying it and recovering it through price adjustment like today.

EVN said that the consulting unit on the Project to build a two-component electricity price pilot mechanism has proposed a roadmap for application in two stages. In particular, the testing phase “on real-time data” but still using the current retail tariff to calculate electricity bills, will be implemented until 2024. The results of this calculation will be used to compare, evaluate and Make appropriate adjustments to complete the price schedule. Also during this period, legal documents will be prepared to get ready for the transition period – the official application of two-component prices.

After the testing phase, the consulting unit proposed to officially apply the pilot two-component price for manufacturing customers in the customer group of Decree 80/2024 on direct electricity trading mechanism (DPPA). That is, the pilot is proposed for about 7,000 customers with an average electricity consumption of 200,000 kWh per month who are eligible to participate in DPPA. Other customer groups continue to implement the current price schedule. The ideal roadmap is from January 1, 2025, as proposed by the consulting unit.

However, according to EVN, the implementation roadmap and subjects applying the two-component electricity price need to be approved by the Prime Minister and guided by the Ministry of Industry and Trade. At the same time, changing the electricity price calculation mechanism needs to be carefully considered and have an appropriate roadmap.

EVN also believes that the selection of customer groups under the DPPA mechanism for piloting is “prudent and can be considered in the current period”.

Regarding the application roadmap, this group recognizes that in the testing phase, payment should not be made according to the two-component price schedule but still according to the current price schedule. “Only apply, make official payments when “full legal documents or under the direction of the Government and Ministry of Industry and Trade”.

EVN affirms that reform of the retail electricity price mechanism needs to be considered at a time when Vietnam is transitioning to a market mechanism for electricity generation, wholesale and retail electricity. However, the application of two-component prices will impact customer groups and electricity-using households because the amount of money customers must pay may increase or decrease compared to the current mechanism.

“This will create mixed reactions in public opinion, easily being exploited and distorted by subjects who do not understand the nature of the incident. Therefore, it is necessary to communicate to create consensus,” EVN said.