Jury out on nation’s new power pricing plan

“Presently, customers don’t know what kind of voltage they are using and their payments are equal,” he said.
Under the new system, power generation, transmission and distribution will be separated into three sectors.
World Bank consultant Pedro Antmann said that a gradual reduction in subsidies and the establishment of platforms to ensure transparency and efficiency were needed to ensure the industry’s sustainability.
He said that as Vietnam was struggling to meet power demands, subsidies on the first 200 kWh of consumer use were now inappropriate.

“Price supports from the state have been for high, medium and low income earners equally,” he said.
Statistics released by Electricity of Vietnam (EVN) stated that poor households normally use below 100 kWh per month and that in 2006 alone, the state had to pay out VND7,098 billion ($440 million) in power rebates.
Analysts also said that the existing mechanism did not protect customers from rural areas who were given a low quality service, while being charged high prices for power by companies outside EVN.

A joint project on retail tariffs has been formulated under the cooperation between ERAV and the World Bank.
ERAV said that if the country was to have a competitive power market by 2009, the current retail tariff system must be fine tuned, as it had failed to attract investors by building a concrete price mechanisms for power generation and transmission costs.

“The state subsidised cap at 50 kWh per household per month in a new system of power pricing instead of the current 200Kwh level applied would be a proper level to support poor consumers really,” Antmann said.
“A ladder system where the more power consumers use the more they pay would result in greater fairness and transparency.”
The new regulations have been scheduled for rolling out on a trial basis by 2009 with the aim of having an operation framework in place by 2010.