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An EVN employee is monitoring safe electricity operation |
In the draft electricity retail price structure for domestic use, the current 6 levels will be reduced to only 5:
_Rate 1 of VND1,806 (US$0.075) /kWh: the first 100kWh
_Rate 2 of VND2,167 ($0.09) /kWh: from 101kWh – 200kWh
_Rate 3 of VND2,729 ($0.11) /kWh: from 201 – 400kWh
_Rate 4 of VND3,250 ($0.13) /kWh: from 401 – 700kWh
_Rate 5 of VND3,612 ($0.15) /kWh: from 701kWh and above.
The Ministry of Industry and Trade explained the reason for this new 5-level electricity price structure, saying that it could minimize the negative effects on household users. The first two levels ensure stable prices for poor families and those eligible for social policies, who are now accounting for about 33.5 percent of the total. The revenue gap created by a decrease to these levels will be compensated by those applying the price levels of 4 and 5 (from 400kWh and over).
The advantages of this new structure, according to the above ministry, lie in its simplicity and intelligibility while able to encourage energy conservation in the community, especially in peak months. However, households whose electricity use is above average (more than 710kWh a month), accounting for 2 percent of the total, will see an increase in their bill.
Expert on this field Assoc. Prof. Dr. Ngo Tri Long voiced his support for this new price structure because of its effectiveness in promoting electricity conservation. Yet he commented that to a certain extent, switching from 6 to 5 levels in price calculation has some drawbacks.
As usual, the more levels there are, the more precise the calculation is. It is important not to count the number of levels in a price structure but to devise a logical way to charge electricity use so that the rights of both consumers and suppliers are maintained.
According to the current retail price for domestic electricity use of households consuming more than 400kWh per month, the charge is VND3,151 ($0.13) /kWh. The new price structure will obviously increase their bill as they will fall into Rate 4 and Rate 5 categories.
