Companies Protest against Peak Hour Power Pricing

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Mar. 18 – Vietnamese businesses are protesting against a new pricing system that doubles the price of electricity during the peak hours between 9:30 a.m. and 11:30 a.m. and between 5 p.m. and 8 p.m.

The pricing is meant to discourage the use of electricity at those hours and force companies to change production schedules although it has invariably led to manufacturers reining in on production.

According to Thanh Nien News, companies say the new policy is unreasonable because it labels the time between 9:30 a.m. and 11:30 a.m. as peak hours when it is the usual hours that all businesses run.

Business complain that they have been forced to stop work during peak hours while employees are paid to do nothing during that time. Moreover, businesses that cannot afford a lull in production times have been forced to pay more on top of slowing export demand.

Prior to the new electricity pricing system that took effect last March 1, only the hours from 6 p.m. to 10 p.m. were considered peak rates.

Deputy Minister Hao told Thanh Nien News that businesses should arrange for their staff to do more work more after 8 p.m. to decrease electricity costs. This suggestion will not help lower costs because night shift workers are compensated 30 percent higher than normal salary.

The average price of electricity has increased by 8.9 percent to VND948.5 per kilowatt-hour beginning March 1. The Ministry of Industry and Trade announced that such a measure would hold back Vietnam's GDP goal of 6.5 percent by between 0.05 and 0.07 percent and would also increase CPI by 0.25 and 0.3 percent.

Vietnam has set a goal of generating an estimated 83.3 billion kilowatt-hours of power for 2009 with Electricity of Vietnam contributing around 57.44 billion kilowatt-hours.