Vietnam's government is proposing time-of-use electricity pricing for households, allowing different rates during peak, off-peak and normal hours when technical conditions permit.
The National Assembly Standing Committee discussed proposed amendments to several provisions of the Electricity Law on the morning of Sept. 21.
According to the government's proposal, the draft law would revise regulations governing direct electricity trading between large power consumers and electricity generators, expanding participation in the direct power purchase mechanism to include electricity retailers. The government would determine specific eligibility criteria and scale requirements.
Deputy Minister of Industry and Trade Nguyen Viet Son presents the government's proposal. Photo: National Assembly Media
The government has also proposed adding provisions covering circumstances in which electricity supply may be suspended or reduced, as well as clarifying when a power seller has the right to disconnect a customer who fails to pay electricity bills as agreed in their contract.
The draft would also revise and clarify circumstances in which electricity supply may be suspended or reduced under plans involving power sellers, buyers and related organizations and individuals.
The government would set detailed procedures for suspending or reducing supply, as well as methods for determining the costs of disconnection and reconnection.
On electricity pricing, the draft adds provisions allowing peak, off-peak and normal-hour retail electricity rates to be applied to residential customers when technical conditions permit.
It would also authorize the Minister of Industry and Trade to approve wholesale electricity price frameworks and introduce transitional provisions governing the retail tariff structure for tourist accommodation businesses.
The proposed amendments more closely follow the direction set out in Politburo Resolution No. 70 to eliminate cross-subsidies in electricity pricing between customer groups by establishing a roadmap for their gradual removal.
In its preliminary review of the bill, Nguyen Thanh Hai, chairwoman of the National Assembly's Committee on Science, Technology and Environment, said the committee's standing body broadly supported the principle that electricity prices should reflect reasonable and legitimate costs, help mobilize investment, gradually eliminate cross-subsidies and promote a competitive electricity market.
However, the reviewing body raised concerns that the draft's requirement for power purchase agreement prices to "ensure full recovery" of costs and investment capital, along with a reasonable profit, could be interpreted as the state guaranteeing investors' financial outcomes.
It said the government should make clear that electricity prices are formed on the basis of reasonable and legitimate costs, investment efficiency, risk levels and market conditions.
Nguyen Thanh Hai, chairwoman of the National Assembly's Committee on Science, Technology and Environment, presents the committee's preliminary review. Photo: National Assembly Media
In particular, investment and business risks should not be transferred entirely to the state, electricity buyers or consumers.
The draft also provides that when electricity prices cannot be adjusted promptly because of the need to maintain macroeconomic stability and social welfare, the state would establish a mechanism to compensate for reasonable costs.
The reviewing body asked the government to clarify the funding source, method and timing for recognizing and handling such costs to avoid an interpretation that they would automatically create an obligation for the state budget.
The removal of cross-subsidies should also clearly define its scope, affected customer groups and implementation roadmap, the committee said.
It should be kept separate from direct support policies for poor households, other eligible beneficiaries and disadvantaged areas, with funding provided in an open and transparent manner.
Concluding the discussion, National Assembly Vice Chairman Nguyen Hong Dien said the Standing Committee agreed on the need to amend and supplement provisions of the Electricity Law to fully and promptly institutionalize new policies adopted by the Party Central Committee and Politburo.
The Standing Committee called for a careful review of the scope of the amendments to ensure that changes are limited to provisions that are genuinely necessary and have sufficient political, legal and practical grounds.
It agreed to submit the draft law to the National Assembly for consideration and discussion at its second session after the drafting agency incorporates feedback and provides explanations in line with the conclusions of the meeting.
Vietnamnet.vn
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