Electricity officials mull charges for 2021-2025

Electricite du Laos, a state enterprise, is studying possible price structures for electricity consumption for the period 2021-2025 in response to changes in socio-economic development.
Changes to the existing price structure aim to enable the enterprise to continue its operations while minimising the impact on householders and the growth of businesses.
Speaking at a seminar held in Vientiane on Monday, EDL Managing Director, Mr Chanthaboun Soukaloun said the enterprise was operating at a loss and was suffering an increasing debt burden.

“Our business has been losing money for at least the past 10 years,” he said, saying that this loss affected EDL’s financial liquidity and its capacity to pay its debts.
Officials said a survey conducted in 2017 found that the cost of electricity production was 880 kip per kWh.
However, consumers currently using less than 150 kWh per month are charged only 355 kip per kWh. For consumption of 150-461 kWh a month, the first 150 kWh costs 355 kip per kWh and the rest is charged at 710 kip per kWh.
The government’s intention is to help people, particularly those living in rural areas, to gain access to electricity.
In 1990, only 16 percent of the population had access to electricity so the government encouraged private investment to develop this sector.
Serving as a middleman, the EDL mostly buys electricity from hydropower plants and has borrowed extensively from banks in order to build transmission lines to rural regions so that more people have access to electricity.
Deputy Minister of Energy and Mines Dr Daovong Phonekeo told the seminar it was important to review the price charged for electricity to ensure that prices reflected the nation’s circumstances while addressing EDL’s financial liquidity.
Chairman of the National Assembly’s Law Committee, Mr Saithong Keoduangdy, said the cost of electricity in Laos was not high compared to other countries, but the problem was that many people have very low incomes.
The cost of electricity production remains high, but the relevant sector was unable to confirm whether the amount charged for electricity would increase or not.
From 2021-2025, EDL is offering seven options under the household category and asked participants at yesterday’s seminar to comment on their suitability.
The first option is to use the six electricity pricing rates introduced between 2016 and 2019. The second would be to charge 355 kip per kWh for people who use 150kWh or less per month and 710 kip for those using more than 150kWh per month.
Third, those using 100kWh per month would be charged 355 kip and those using 101-200kWh per month would be charged 532.5 kip, while everyone else would be charged 710 kip per kWh. Fourth, people using 0-200kWh per month would be charged 420 kip per kWh, those using 201-500kWh would pay 630 kip per kWh, and the rest would be charged 840 kip per kWh.
The fifth and six options would be based on the six rates and groups of consumers but no further details have been made available.
These rates are merely proposals at this stage and no decision has been made regarding the new electricity charges. Authorities will discuss the matter with wider society and obtain more input from consumers.

By Somsack Pongkhao
(Latest Update October 6, 2020)