Proposed Amendments to the Electricity Law Submitted to National Assembly

On October 21, Minister of Industry and Trade Nguyen Hong Dien, with the Prime Minister’s endorsement, introduced a draft amendment to the Electricity Law to the National Assembly.

The current Electricity Law, implemented in 2004, has revealed several issues over its almost 20-year span that necessitate updates to align with practical needs and legal coherence.

Minister Nguyen Hong Dien stated, “This draft law aligns with the Constitution. It is transparent, devoid of conflicting policies with Party principles or state laws, and does not favor any special interest groups.”

A significant aspect of the amendments is the focus on nuclear power development. The proposal advocates for a state monopoly on investments in nuclear power plants due to their critical role in national security.

All stages, including construction, operation, and decommissioning of nuclear facilities, are to adhere strictly to the Law on Atomic Energy and relevant regulations.

The draft emphasizes the use of advanced, reliable technology in nuclear projects to maintain the highest safety standards. Depending on varying socio-economic conditions, the Prime Minister may authorize a special investment mechanism for nuclear power plants.

Nuclear power planning will be integrated into the broader national power development strategy to reinforce energy security.

During their review, the National Assembly’s Science, Technology, and Environment Committee noted that nuclear power is a novel area in this draft and called for the Ministry of Industry and Trade to obtain higher approval for its inclusion and details in the law.

The committee also highlighted the need for careful evaluation of state monopoly areas, advocating for regulations that are essential for energy security while promoting social investment and enhancing state management efficiency.

Moreover, the draft suggests that electricity pricing should be based on market mechanisms, complemented by state regulation to foster efficient energy use. The goal is to rationalize pricing and progressively remove cross-subsidies among different customer groups, with particular emphasis on residential versus industrial users.

The pricing structures will also be customized for high consumption and emission sectors, such as lodging and industry, while the government will focus on establishing charging stations for eco-friendly transportation.

Electricity pricing is intended to remain transparent and fair, ensuring equal treatment among providers and allowing companies to set their buying and selling prices within state-defined parameters.

While the review committee generally supports the proposed electricity development strategies, it seeks further clarification on specific aspects, including the viability of the proposed electricity pricing strategies and the removal of cross-subsidies. They recommend the inclusion of environmental protection and climate change considerations.

The Ministry of Industry and Trade has addressed some concerns, but there are outstanding issues, particularly regarding a clear guiding framework for electricity prices, including transparency for subsidies granted to beneficiaries and remote regions.

The Ministry has requested that the National Assembly consider and pass this law in a single session (during the 8th session of the 15th National Assembly).

However, the review committee recommends that the law be debated over two sessions: discussing it in the 8th session and then passing it in the following one.