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  Policy & Strategy

Power consumers enjoy single price mechanism

Households consuming more than 300kWh/month will have to pay at least VND65,000 more a month as of January 1, 2005, according to a new Government decision announced by the Ministry of Industry.

However, power consumers expressed their concern over Electricity of Vietnam’s (EVN) accumulated calculations, as they claim that households consuming more than 300kWh/month will suffer from more losses than those consuming less than 300kWh/month.

Deputy Minister of Industry, Bui Xuan Khu, reaffirmed that the decision does not mean the Government wants to increase power prices.

Production units, State offices and local households in rural areas will not be affected by the new calculations if they consume less than 300kWh/month. The accumulated pricing rates remain unchanged for these consumers.

The new calculations will be also applied to customers consuming power at peak, normal and off-peak hours of the day.

Noteworthy is that the new calculations will be applied equally for both local and foreign customers. This means that foreigners who used to pay higher prices for power will enjoy lower rates similar to Vietnamese people.

According to EVN estimations, the power sector will incur losses worth VND350-400 billion in 2005 if the single price mechanism is observed and more investment is needed to build more power plants. The figure will amount to VND5,200 billion by 2009.

Mr Khu also said the power sector’s total revenue has kept declining after the decision came into force.

To enjoy lower prices, EVN has advised consumers to practice thrift and keep monthly power consumption to below 300kWh. In addition, they will have to use three-price level meters and adjust power consumption at off-peak hours. As a meter of such type costs more than US$100, EVN will have to carefully consider consumers’ opinions before making a final decision.

VOV - (25/01/2005)

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