Starting from November 9, 2023, the average retail electricity price has increased by 4.5%. The new retail electricity rates with 6 tiers (excluding VAT) are as follows:
• Tier 1: From 0 – 50 kWh: 1,806 VND/kWh
• Tier 2: From 51 – 100 kWh: 1,866 VND/kWh
• Tier 3: From 101 – 200 kWh: 2,167 VND/kWh
• Tier 4: From 201 – 300 kWh: 2,729 VND/kWh
• Tier 5: From 301 – 400 kWh: 3,050 VND/kWh
• Tier 6: From 401 kWh and above: 3,151 VND/kWh
This time, the electricity price adjustment, according to the EVN chief accountant, will bring an additional 3.2 trillion VND to EVN.
Proposed EVN apply a fairer electricity pricing formula (Illustrative photo)
Besides the increase in electricity prices, which is already a disappointment for consumers, the closing of the meter index also causes concern for people as it may lead to confusion in calculating the tiered electricity charges. Previously, the meter index closing schedule ranged from the 3rd and could be on the 20th of each month. But starting now, it will be closed on the last day of the month (effective from February 29). And it leads to the fact that instead of customers paying for electricity for one month, the number of days of electricity usage in the bill can be from 41 – 58 days. If EVN, in a certain department, uses the meter reading for 58 days and applies tiered electricity rates for one month, the people will suffer a great disadvantage. In fact, in the past few days, public opinion has spoken out a lot about this issue. And EVN has clarified with the formula 92-92-184-184-184 that it should actually apply the formula 100-100-200-200-200.
The 100-100-200-200-200 formula (by doubling the 50-50-100-100-100 tiered pricing) is more reasonable for consumers. The 92-92-184-184-184 formula is more beneficial for EVN.
Why does EVN use the 92-92-184-184-184 formula with only 92% of the total of both months? It may be because EVN is based on the number of days exceeding one month ranging from 12-29 days of the previous month and set the figure at 92%.
Another formula, based on statistical averages, is fairer for both sides. It takes the total amount, divides it by the total number of days, and multiplies the number of days for each month by the separate 50-50-100-100-100 regular formula for each month.
Specifically, at the end of February 29, 2024, there will be:
58 days (29 days in February, 29 days in January)
57 days (29 days in February, 28 days in January)
—
42 days (29 days in February, 13 days in January)
41 days (29 days in February, 12 days in January).
Let’s take a specific example for all 3 formulas. Assume customer A on the closing date of February 29, 2024, with 58 days of usage, and the total electricity consumption is 928 kWh. Dividing by the average for 58 days, it is 16 kWh/day. Therefore, customer A used 464 kWh in February and 464 kWh in January.
Applying three options (PA) for customer A, the results obtained are as follows:
1. PA1 (EVN): 92-92-184-184-184
(58 days 928 kWh)
92 x 1.806 VND = 166,152 VND
92 x 1.866 VND = 171,672 VND
184 x 2.167 VND = 398,728 VND
184 x 2.729 VND = 502,136 VND
184 x 3.050 VND = 561,200 VND
192 x 3.151 VND = 604,992 VND
Total PA1 = 2,404,880 VND.
2. PA2: 100-100-200-200-200
(58 days 928 kWh)
100 x 1.806 VND = 180,600 VND
100 x 1.866 VND = 186,600 VND
200 x 2.167 VND = 433,400 VND
200 x 2.729 VND = 545,800 VND
200 x 3.050 VND = 610,000 VND
128 x 3.151 VND = 403,328 VND
Total PA2 = 2,359,728 VND.
3. PA3: Statistical Average
• Month 1 (464 kWh)
50 x 1.806 VND = 90,300 VND
50 x 1.866 VND = 93,300 VND
100 x 2.167 VND = 216,700 VND
100 x 2.729 VND = 272,900 VND
100 x 3.050 VND = 305,000 VND
64 x 3.151 VND = 201,664 VND
Total Month 1 PA3 = 1,179,864 VND.
• Month 2 (464 kWh)
50 x 1.806 VND = 90,300 VND
50 x 1.866 VND = 93,300 VND
100 x 2.167 VND = 216,700 VND
100 x 2.729 VND = 272,900 VND
100 x 3.050 VND = 305,000 VND
64 x 3.151 VND = 201,664 VND
Total Month 2 PA3 = 1,179,864 VND.
Total Month 1 + Month 2 (PA 3) = 2,359,728 VND.
Which is the correct amount equal to PA2 and slightly less than PA1 of EVN 45,152 VND.
In the case of EVN, applying the usual calculation method, customer A will have to pay a much higher amount as follows.
4. PA4: 50-50-100-100-100
50 x 1.806 VND = 90,300 VND
50 x 1.866 VND = 93,300 VND
100 x 2.167 VND = 216,700 VND
100 x 2.729 VND = 272,900 VND
100 x 3.050 VND = 305,000 VND
528 x 3.151 VND = 1,663,728 VND
Total PA4 = 2,641,928 VND.
More than PA1 is 237,048 VND, and more than PA2, PA3 is 282,200 VND.
Applying PA3 to all customers from 41 days (12 days in January, 29 days in February) to 58 days (29 days in January, 29 days in February) leads to an interesting observation:
Only customers with 41 days (12 days in January, 29 days in February) get a slight benefit of 6,940 VND from EVN’s PA1. From customers with 42 days (13 days in January, 29 days in February) to 58 days (29 days in January, 29 days in February), the calculation method proposed by EVN brings disadvantages compared to PA3 based on statistical averages. Below are the specific figures for a few calculated days:
41 days: PA1: 1,555,888 VND; PA3: 1,562,828 VND
42 days: PA1: 1,604,688 VND; PA3: 1,601,996 VND
44 days: PA1: 1,702,288 VND; PA3: 1,689,324 VND
45 days: PA1: 1,751,088 VND; PA3: 1,732,988 VND
46 days: PA1: 1,799,898 VND; PA3: 1,776,652 VND
48 days: PA1: 1,900,730 VND; PA3: 1,865,264 VND
58 days: PA1: 2,404,880 VND; PA3: 2,359,728 VND.
As the number of days increases, customers suffer more disadvantages from day 42 to day 58.
5. Errors in meter index
Apart from applying the tiered pricing of 50-50-100-100-100 for both months causing an abrupt increase in the bill, mistakes in the meter index should not be ruled out. On social media, many consumers have said that their bills have tripled or gone from normal 1.3-1.5 million VND to 4.2 million VND. Therefore, in addition to reviewing the application of tiered pricing formulas separately for each month, there needs to be a check on the accuracy of the meter readings. At the same time, recheck all unusual billing amounts for customers.
Proposal
1. Propose EVN to apply the 100-100-200-200-200 formula instead of the 92-92-184-184-184 formula. The people not only have to bear the 4.5% increase in electricity prices but also suffer from an unfair tiered pricing formula. Or at best, according to the statistical average PA3, which is fairer for both sides, instead of using the default formula 92-92-184-184-184, which makes consumers suffer a loss.
2. Propose EVN to have measures to check so as not to mistake applying the 1-month tiered pricing of 50-50-100-100-100 for any bill more than 1 month and have appropriate measures to ensure the accuracy of the meter readings. At the same time, conduct a review of all abnormally increased bills of customers.
3. Importantly, EVN needs effective management measures throughout the industry to avoid loss, waste, and the resulting cost increase and the risk of proposing an electricity price increase after a period of time. With the current inefficient machinery and management methods, and many losses as it is now, the risk of electricity price hikes is hard to avoid.
