Electricity prices will only increase by 2-5% if EVN is allowed to compensate for the loss of 45,000 billion VND.

Ministry of Industry and Trade :

Last month, the Ministry of Industry and Trade proposed amending Decree 72, allowing Vietnam Electricity (EVN) to calculate and allocate into electricity prices the costs of electricity production and supply that have not been compensated since 2022. This cost corresponds to a loss of about VND44,792 billion by the end of last year of EVN.

In the third draft recently sent to the Ministry of Justice for review, the Ministry of Industry and Trade proposed two specific additional options for this expense.

Option 1: EVN is allowed to allocate uncompensated direct costs for electricity production and supply in the average retail price from 2022 onwards, after deducting profits from other activities. This mechanism can be applied in the following years if it continues to arise. This option will create initiative for operations, but can also reduce the motivation to save and control costs of electricity units because it is compensated through the average retail electricity price. Option 2: EVN is only allowed to handle uncompensated direct costs from 2022 until before this decree takes effect, not applicable in the following years. This option will require electricity units to review and strictly manage production and business activities, minimize arising and move towards not letting similar situations recur in the future.

The drafting agency said that thanks to favorable hydrological conditions in the first 7 months of the year, EVN's business results were better than expected. Therefore, if EVN is allowed to add a regulation to calculate losses into prices, the electricity price level at the end of the year will be almost unchanged, or only increase slightly by 2-5%. In case of a 3% increase from October, the CPI for the whole year will only increase by about 0.03 percentage points.

The Ministry also emphasized that electricity price adjustments will be implemented according to a roadmap, avoiding "jerkiness", in order to maintain socio -economic stability and balance interests between businesses and people.

Electricity prices will only increase by 2-5% if EVN is allowed to compensate for the loss of 45,000 billion VND.

Electricity workers check equipment. Photo: Ngoc Thach

In fact, according to the report on the results of the inspection of electricity production and business costs in 2023 conducted by the Ministry of Industry and Trade, EVN's total production cost is more than VND 528,600 billion. This level is equivalent to a production price of VND 2,088.9 per kWh, an increase of 2.79% compared to 2022. In particular, the revenues of the group and its member units from liquidation, sale of fixed assets, recovered materials and rental of electric poles have been deducted. Also in 2023, the retail electricity price increased twice (3% in May and 4.5% in November). With these two adjustments, the retail electricity price increased to VND 1,920.3 and VND 2,006.79 per kWh (excluding VAT), respectively. That is, despite the price adjustment, EVN still lost VND 82.1-168.6 per kWh of electricity sold.

“The accumulated losses have led to a decrease in State investment capital in EVN, making it impossible to preserve this capital flow,” EVN’s report stated. Therefore, the group believes that this loss needs to be calculated to be recovered in the electricity price. This is to promptly compensate for the decrease in State investment capital in previous years, helping EVN have resources to invest in Ninh Thuan nuclear power projects, Quang Trach power plant cluster, offshore wind power and other power sources to ensure electricity supply for the coming period.

The mechanism for adjusting the average retail electricity price is stipulated in Decree 72. According to the Ministry of Industry and Trade, in recent times, EVN has built and calculated the average retail electricity price according to regulations, helping to adjust prices more promptly and flexibly than before.

However, the operator acknowledged that this regulation needs to be reviewed and adjusted according to the Electricity Law 2024, to ensure the principle of correctly and fully calculating reasonable and valid costs in the process of determining and adjusting retail electricity prices to preserve and develop business capital of enterprises.

Currently, the average retail electricity price is 2,204.07 VND per kWh (excluding VAT), after a 4.8% increase on May 10.

Source vnexpress.net

Source: https://baophutho.vn/gia-dien-chi-tang-2-5-neu-cho-evn-tinh-bu-khoan-lo-45-000-ty-dong-239251.htm