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Vinacomin still cannot get agreement with EVN on electricity price
The ‘verbal battle’ between the Electricity of Vietnam (EVN) and PetroVietnam has not been settled, while the Vietnam Coal and Mining Industries Group (Vinacomin) has spoken out about the deadlock in negotiating the electricity sale price with EVN.
Vinacomin has recently sent a document to the Ministry of Industry and Trade, asking the ministry to help settle the existing problem. Vinacomin invested in the Son Dong thermo power plant and still has not reached any agreement with EVN about the price of electricity Son Dong will sell to EVN. The power plant will still have to generate power, while the electricity price will depend on the only buyer, EVN.
Electricity price: VND 678/kwh or VND 710/kwh?
Kicking off the investment in November 2005 and beginning the power purchasing agreement (PPA) more than one year ago, the investor of the 220 mega watt Son Dong power plant still has not made any agreement on the electricity sale price, while the commercial power generation has been slated for the beginning of the second quarter. Vinacomin, the investor of the power plant, seems to be very impatient.
In principle, the two sides, Son Dong and EVN, have agreed that the electricity price will include two factors, fixed expenses (which do not change in accordance with fuel prices), and changeable expenses (which can be adjusted in accordance with the prices of input fuel, such as coal or DO oil). If so, the electricity price will be adjusted in accordance with the coal price to be set by the State.
However, the concrete electricity sale prices have not been agreed by the two sides.
At first, Vinacomin offered to sell electricity at VND 720/kwh, but then it changed its mind, offering at VND 710/kwh (US 0.0418/kwh). Meanwhile, EVN has been insisting that it would purchase electricity if the price is at VND 678.4/kwh.
Nguyen Van Bien, Head of the Planning Division under Vinacomin, said that the offered price at VND 710/kwh proves to be the most reasonable level. The Son Dong Power Plant makes power with the coal from Dong Ry and Tan Dan mines, which have low quality, therefore, the investment of the plant would be high (Vinacomin is selling good quality coal to the power plants of EVN).
However, EVN, the only electricity buyer, has another argument. Nguyen Anh Tuan, Deputy Director of the Power Purchasing Company under EVN, said that if purchasing is at VND 710/kwh, the purchasing price will be higher than the price at which EVN is selling to consumers.
Who should be the arbitrator?
Nguyen Van Bien, representing Vincomin, admitted that EVN has its own reason to think of buying electricity from different sources in order to avoid loss, as the EVN’s electricity sale price is still being controlled by the state.
Bien said that the Ministry of Industry and Trade should come forward to act as the arbitrator in the price negotiation of the two parties. But the ministry still remains the outsider, leaving the sellers and buyers in prolonged negotiations.
Bien said that the Price Control Agency under the Ministry of Industry and Trade always stands between the involved parties in the coal price negotiations. However, the situation proves to be quite different in power pricing. The only buyer from power plants is EVN, while the sellers all do not belong to EVN. The power price frame, the most important basis for electricity price negotiations, has not been set up by state management agencies.
Sharing the same view, Tuan from EVN also thinks that the thing that state management agencies should do right now is to promulgate the electricity price frame which will be referred to by investors when making investment decisions.
VietNamNet/LD
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