Recently, we have seen a significant number of people reporting a sudden surge in their electricity bills here in Vietnam. Consumers were in shock as their bills skyrocketed: as high as 300 times the regular cost in some cases.
A report from EVN showed that a whopping 3.1 million users (out of a total of 26 million) received 30% higher bills in May compared to April 2020. What could be the cause of this sudden change? Has someone made a big mistake, or is there some kind of supernatural force at play?
The scorching hot summer
One of the obvious contributors to your energy bill is the fierce summer heat. In-fact, national energy company EVN blamed recent high temperatures in Hanoi and the North Central area for the sudden spike in energy costs. When temperatures are high, air-conditioners and cooling devices have to work much harder to bring the heat down. This, coupled with your increased need for cooling, might be the culprit behind your rising bills.
However, this surely isn’t the first hot summer we’ve had in Vietnam? Associate Professor Ph.D. Nguyễn Đức Thành, former Director of the Vietnam Institute for Economic and Policy Research, comments: “With so many people complaining about the abnormal increase in bills, EVN should be responsible for making this issue transparent, under the supervision of the Electricity Regulatory Authority (Ministry of Industry and Trade), and Government Inspectorate.”
In answer to such observations, however, Vice President of Vietnam Electricity Association, Mr. Trần Đình Long, insists that hot weather and cooling systems drove up electricity consumption. He also pointed out that progressive electricity pricing, which is in use in many other countries, also plays a part in these high bills. He added: “Complaint all you want but that is exactly how things go right now.”
The progressive pricing mechanism
A progressive pricing mechanism means that the more energy people use, the more they have to pay. In Vietnam, there are six tiers of pricing to be aware of. This system helps consumers save money if the amount of electricity they consume is within the ‘low tier’. However, as we have seen recently, it will also aggressively ramp-up the bills when you move up through the tiers.
Former Director of Price Market Research Institute, Dr. Ngô Trí Long, thinks that this progressive method conflicts with the usual order of consumerism, i.e. the more you buy, the cheaper things get. It also makes EVN’s pricing “confusing and hard to keep track of.” This pricing plan sprouted many controversies from long ago, as it was deemed “beneficial to only EVN”.
Conceding this point, Mr. Trần Đình Long informed that changes to the pricing mechanism are now in the work. Also, with the increase of energy investors & developers in Vietnam (including Shire Oak International), consumers will soon be able to enjoy especially friendly pricings.
“The annual progressive electricity tariff is still being studied and adjusted accordingly. The Ministry of Industry and Trade is proposing to use 5 levels instead of 6 levels. In addition, when the competition in the electricity retail market is fully built, the will only be one level of pricing.
The future is not far off, because by the Prime Minister’s approval we will start in 2022 and will have a fully competitive retail market by 2024,” said Mr. Long.
To increase transparency in pricing, economy expert Dr. Lê Đăng Doanh says an independent third party unit should inspect and keep track of the system. This party could work with EVN to see if there are any abnormalities in pricing and meter readings and then involve organizations such as the Price Management Department or Competition Administration Department when needed.
Our provider might be at fault, too
Had you surfed social media over the past few weeks, you might have seen posts from people complaining they have been overcharged on their electricity bills. Some of these stories were picked up and reported on by local news providers.
In one case, a household in Đà Nẵng claimed to get a bill 14.3 times higher than usual. In response, EVN said that the electricity meter had malfunctioned. In another, a family in Nghệ An was asked to pay a bill that was 32 times higher than their normal usage. Another household in Quảng Ninh was charged 90 million VND.
The pattern repeated in a number of areas including Quảng Bình, where a family was charged VND 58.480.013 instead of VND 554.090, as well as Hồ Chí Minh City. The causes, as reported by EVN, were “mistakes in recordings of electric meters.” The company says it is taking these cases very seriously, with staff members responsible for the mistakes facing strict punishments to ensure they do not happen again.
What to do when your bill seems too high:
Take a meter reading
The first step is to ensure EVN has an accurate reading from your meter, not an estimate. It only takes a few seconds to take a meter reading, and it helps prevent your supplier from overcharging you.
Check your meter
You can look online or ask your provider how to check if your meter is faulty. Alternatively, contact an electrician for further help.
Contact EVN/your energy provider immediately
If you were overcharged for any reason, be it because of an incorrect reading or a meter malfunction, contact your service provider to get a re-inspection, and possibly a refund.
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