Electricity prices will increase again this year?

Deputy Prime Minister Vuong Dinh Hue requested EVN to build electricity prices based on the principle of calculating full and correct costs in the price, ensuring appropriate profits, creating room to attract investment.

“EVN is requested to balance factors according to different scenarios to complete three important documents of the electricity industry: the 2016-2020 retail electricity price framework, the electricity price management mechanism and the 2017 electricity price management scenario.”-The above direction was given by Deputy Prime Minister Vuong Dinh Hue at a working session with Vietnam Electricity Group (EVN) on the Group's production and business situation in the 2017-2020 period.

At the meeting, the Deputy Prime Minister stated that the upcoming 5th Central Conference will review the implementation of the arrangement, innovation, development and improvement of the efficiency of state-owned enterprises. The Prime Minister, the Government Standing Committee, and the Steering Committee for Enterprise Innovation and Development worked with the Party Committee of the Central Enterprises Bloc, Petro Vietnam Group, TKV, and a number of other corporations and groups to draft the Resolution of the 5th Central Conference on restructuring state-owned enterprises.

In the above context, Deputy Prime Minister Vuong Dinh Hue requested that EVN Group clarify the results of its recent business restructuring and plans, including issues of equitization, divestment, building a competitive electricity market, restructuring finance, governance, human resources, technology, etc.

EVN and ministries and branches discussed and clarified solutions, especially capital mobilization solutions, to effectively implement the revised Power Plan 7, ensuring national energy safety and security until 2020.

EVN focuses on directing the implementation of key power source and grid projects; developing scenarios and balancing capital sources year by year in the 2017-2020 period and beyond. EVN and ministries and branches discuss and clarify solutions, especially capital mobilization solutions to effectively implement the revised Power Plan 7, ensuring national energy safety and security until 2020.

In addition, it is necessary to promote administrative procedure reform, improve the business environment, improve the energy saving index; ensure the separation of production and business tasks from public service tasks (separate the function of representing the owner from state management, separate production and business tasks from political tasks), and criteria for evaluating state-owned enterprises in the electricity sector.

The Deputy Prime Minister requested the Ministry of Industry and Trade to continue reviewing the power development plans of provinces and cities to have appropriate plans and prepare solutions for power supply to meet investors' needs, especially for projects in the Power Plan 7; propose to the Prime Minister to restructure investors in some power projects if necessary.

Regarding equitization and divestment, the Deputy Prime Minister requested the Ministry of Industry and Trade and EVN Group to coordinate with ministries and branches to speed up the equitization process at power generation corporations, trying to complete it in the third quarter of 2017.

Regarding improving EVN's management capacity, the Deputy Prime Minister suggested that the Group proactively review and include in the list of loss-making and ineffective projects of the Group in handling according to market principles.

“Not only EVN, but I also require this task for other corporations; ensure cash flow balance in production and business; apply modern technology in management, reduce labor costs, especially reduce electricity loss; be transparent and public in calculating electricity prices. EVN saves at least 10% of costs,” said Mr. Hue.

Regarding the task of issuing the electricity price scenario for 2017, Deputy Prime Minister Vuong Dinh Hue requested EVN to build electricity prices based on the principle of calculating full and correct costs in the price, ensuring appropriate profits, creating room to attract investment, ensuring energy security, especially ensuring investment attraction in wind and solar power and controlling inflation.

According to VnEconomy