Electricity price may decrease by 20 percent in morning peak hours

July 3, 2009

VietNamNet Bridge – The Ministry of Industry and Trade (MOIT) has proposed a 20 percent decrease in the electricity price during morning peak hours in an effort to help businesses reduce expenses.

In its report to the Government, MOIT said that the morning peak hour scheme has helped a lot in dealing with the capacity shortage of the national power grid. The application of the morning peak hour scheme has encouraged people to practice thrift and use electricity sparingly.


However, the ministry’s survey has shown that the scheme has forced enterprises to pay more for electricity and raised the proportion of expenses on electricity in the total production costs of enterprises.


The survey of 40,000 businesses showed that 63-72 percent of polled enterprises saw electricity expenses increasing by up to 10 percent. Meanwhile, 13.28-15.7 percent of enterprises saw bills increase by over 20 percent. These are enterprises which have usually have one production shift a day and use electricity mostly during morning peak hours.


In Tien Giang, Long An and Hanoi, local enterprises had to pay 2.26-22.6 percent more for their electricity bills in March, while the ratio of expenses to total production cost increased by 0.04-0.07 percent when the morning peak hour scheme was implemented.


Two projects suggested by MOIT


MOIT’s principle is that Vietnam needs to maintain the peak hour scheme. However, in order to help enterprises ease difficulties, MOIT has suggested a new format.


The morning peak hours would still be from 9.30 am to 11.30 am, while the electricity price would be lowered by 20 percent as of August 1, 2009 until the next electricity price adjustment.


Those who could enjoy price decreases would be small-scale enterprises which are now purchasing electricity at the voltage level of 35/22KV and lower.


As such, the total turnover from electricity sales would decrease by 350 billion dong.


The average electricity sale price in 2009 would decrease by 0.5 percent from 948.5 dong per kilowatt currently to 943.7 dong per kilowatt. The proportion of additional electricity expenses due to the morning peak hour scheme of enterprises would be lowered to less than 10 percent.  



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