Retail electricity price list for households: The more it is revised, the more confusing it becomes.

The Ministry of Industry and Trade has just released the Draft Decision of the Government "Regulations on the structure of retail electricity prices" to amend and replace Decision No. 28 issued more than 6 years ago (from April 7, 2014).

Although it is affirmed that these options have been widely consulted with many related parties, however, immediately after the Draft was announced, many experts said that these options not only failed to resolve the frustration of many households using electricity for daily life when their electricity bills "shockingly increased" at certain times, but also increased doubts about the way electricity prices are calculated - which has had many shortcomings in recent times.

The fundamental difference in this revision of the retail electricity price structure is: Instead of just having one option for progressive retail electricity prices, there is also an additional option of "single retail electricity price" for customers to choose from.

Retail electricity price list for households: The more it is revised, the more confusing it becomes. Illustrative photo

However, according to calculations, all 3 electricity price options proposed by the Ministry of Industry and Trade, most electricity consumers will have to pay more for electricity than the current retail electricity price. Notably, there will be about 4 million customers (currently using 200-300kWh/month at level 4 in the current 6-level progressive price list) who will have to pay a higher electricity price (3%) because the new retail electricity price list has combined 2 levels 4 and 5 into 1 level (specifically, according to the new price list - this is level 3 - for households using from 200-400kWh/month).

As for the "single price electricity" option, experts affirm that only households consuming 700kWh of electricity per month or more (equivalent to paying over 2 million VND per month for electricity) should consider choosing it, because the single price of electricity is not "pleasant" at all. If applied according to the current average retail electricity price of 1,864.44 VND/kWh (excluding VAT), then for 1 kWh of "single price electricity", consumers will have to pay about 3,000 VND/kWh, or even higher than this level!

Not to mention, in the proposal including the retail electricity price list according to 5 steps and the "single price electricity" price list, there have been 2 options proposed (Options 2A and 2B). It is worth mentioning that in these options, to get the "single price electricity retail price" of about 3,000 VND (ie 145% compared to the average retail electricity price), households consuming electricity according to the steps of more than 700kWh or more must pay up to more than 5,000 VND/kWh (ie the rate is up to 274% compared to the average retail electricity price);

And, with the other option (2B), to reduce pressure for households using more than 700kWh, choosing the step-by-step electricity price option at 3,800 VND/kWh (equal to 185% of the average retail electricity price), the amount to be paid for each kWh of "single-price electricity" is also up to nearly 3,200 VND/kWh (equal to 155% of the average retail electricity price).

The question is, on what basis did the Ministry of Industry and Trade set the reference level and regulate the retail electricity price according to the steps in the Draft?

The reason for such options is because the management agency is calculating the options on the basis of ensuring that the revenue from electricity production and business activities plus the profit required by the industry management ministry is not lost, meaning that whether it is a 1-level option, or a 5-level option, or a combination of 5 levels and 1 level, the total revenue of the electricity industry remains unchanged.

In this Draft, the social security policy has been clearly shown - when the 5-step price list proposed to merge the first 2 steps of the current price list into 1 new step (from 0-100kWh), at the same time keeping the number of kWh from 101-200 and proposing to keep the same, even lower than the current price. This means that the higher steps must be stretched/stretched to make up for it, if one place is reduced, another place must be increased to compensate.

According to experts in the energy sector, the current average electricity price is calculated based on the total revenue of the Electricity sector divided by the total amount of commercial/consumed electricity in the year. Is the revenue from electricity sales according to the above plans equal to the approved average retail electricity price and the total actual cost? It is necessary to publicize the total revenue from electricity sales and the revenue of each step for the residential customer group.

The Ministry of Industry and Trade also needs to clarify the legal basis for proposing retail electricity prices at a rate of up to 274% compared to the average retail electricity price in the proposed new electricity price schedule. It cannot propose "puzzle" options for consumers as proposed in the Draft!./.