Power company threatens to cut electricity, enterprises on a hot tin roof

While enterprises are on tenterhooks because of the threat by the Hiep Phuoc Power Company (HPPC) to cut electricity from April 1, 2011, the Ministry of Industry and Trade (MOIT) still has not raised its voice.

HPPC, the owner of Hiep Phuoc Thermopower Plant in Nha Be district in HCM City has threatened to cut electricity from April 1, 2011 onwards if either one of its two proposals (raising the electricity sale price or having the right to purchase gas at low prices) is not approved. The threat is worrying enterprises in Hiep Phuoc Industrial Zone, because they now face the risk of stopping production because they will have no power. Meanwhile, according to Nguoi lao dong, MOIT has been slow in settling the problem.

Electricity price increases by three times

The Hiep Phuoc Industrial Zone Development Company, a client of HPPC, has sent an urgent document to the HCM City People’s Committee and the HCM City Management Board of Industrial Zones and Export Processing Zones (Hepza), asking to take urgent actions to help settle the problem. HPPC has released an “ultimatum” that if enterprises do not agree to pay electricity surcharges, it will cut electricity. With the surcharges, the actual electricity price will increase from 5 cent per KWH to 17 cent per KWH.

If so, the enterprise, which now pays 500 million dong for electricity bill will have to pay 1.5 billion dong if the new electricity price is applied. Representative of Ngoi Sao Mechanical Engineering and Investment Company in Hiep Phuoc Industrial Zone said export contracts have been signed and the company cannot raise the sale prices; therefore it will not have money to pay the electricity surcharges. The representative said that the company may go bankrupted due to the overly high electricity price.

To date, only 20 out of 160 enterprises in Hiep Phuoc Industrial Zone and Tan Thuan Export Processing Zone have agreed to pay surcharges, while other enterprises have not accepted the new electricity price because they cannot bear the high prices. Meanwhile, HPPC has stated that it will still cut electricity, if only a few of enterprises accepts to pay the new prices. As such, the danger of having no electricity for production is clear.

PVGas does not have gas to sell to HPPC, while the Electricity of Vietnam also cannot sell electricity to HPPC, so that HPPC can resell to its clients in the industrial zones. Meanwhile, no solution for the electricity price standoff has been found.

Enterprises call for government’s intervention

In the latest document sent to the HCM City People’s Committee, the HCM City Industry and Trade Department has suggested a solution: enterprises agree to pay the surcharges required by HPPC; however, the government will prop up the surcharges in order to ease the burden on enterprises. Also according to the industry and trade department, if enterprises have to bear the high electricity prices then this will create inequality. The principle is that the power selling prices must be the same nationwide, no matter where the power is sourced from.

Vu Van Hoa, Head of Hepza, believes that in the immediate time, in order to help the 160 enterprises maintain their production, the government or the HCM City People’s Committee need to provide support.

Nguoi Lao Dong quoted Hoang Quoc Vuong, Deputy Minister of Industry and Trade, as saying that MOIT will organize a meeting this week to discuss the solutions.

Meanwhile, the HCM City People’s Committee has sent an urgent document to MOIT, asking to verify HPPC’s power pricing project and report to the Prime Minister about the surcharges that need to be propped up.

As for long term solution, HCM City has proposed finding a solution on supplying gas to HPPC, or ask the power company to use modern production equipments that use import liquidized gas in order to cut down the production costs. – Nguoilaodong

Tags: Vietnam electricity, Vietnam energy, Vietnam power shortage