Govt. Eyes Revision of Electricity Charges to Generate More Revenue

Source: Vientiane Times

The government plans to make changes to the structure of electricity pricing, bringing charges in line with changing economic and financial circumstances.
The changes will increase the income stream of Electricite du Laos (EDL) and compensate for the weak exchange rate of the kip, making it easier for EDL to buy electricity in dollars, which constitutes 85 percent of EDL’s electricity payments, according to the Ministry of Energy and Mines.

The price structure currently in use is basically the same as that formulated in 2012, while charges are basically the same as those introduced in 2017, although the price increased by 2 percent in February 2021.

From 2012-2019 the average cost of electricity was 8 cents/kWh but as of last year, this equated to 5.13 cents/kWh due to the weak kip.

The government will also consider reducing the amount by which it subsidizes businesses for electricity usage. The extra income generated will go some way towards enabling EDL to repay loans and pay money owed to domestic electricity producers during the investment replacement period.

Up until 2022, electricity consumption by non-resident users was about 10,000 million kilowatt hours, comprising 1.62 million units, while residential usage constituted 25 percent of the total electricity consumption, recorded at 2,647 GWh and distributed through 1.53 million electricity meters.

Other user categories account for 75 percent of the total energy consumption of 7,924 GWh, comprising 85,959 consumers.

The non-residential category is made up of embassies and international organizations and comprises 0.1 percent of consumers with just 140 users. The general business category, backup electricity, and temporary electricity usage account for 9 percent of the total and comprise 43,562 users.

The education and sports business category comprises 0.3 percent and has 743 users, entertainment accounts for 0.1 percent and has 111 users, while public administration offices account for 3.3 percent of the total and comprise 17,985 users.

Agriculture uses 0.6 percent of total electricity and has 1,121 users, while industry accounts for 30.7 percent and comprises 22,277 users, and railways account for 0.6 percent of usage and have 10 user units.

The digital asset mining business category accounts for 30.2 percent and has 10 users, with separate electricity pricing due to short-term power consumption and an experimental government project.