logo
Laos to renegotiate power purchase deals in bid to cut bills for home-owners

Laos to renegotiate power purchase deals in bid to cut bills for home-owners

The Star5 days ago
FILE PHOTO: Aerial photo taken on July 31, 2020 shows the construction site of the Nam Theun 1 hydropower project in Borikhamxay Province, Laos. A group of Chinese builders have been working day and night in the vast Lancang-Mekong River Basin in Laos. Laos plans to renegotiate power purchase agreements with hydropower plant developers that sell power to the state for countrywide distribution. - Sinohydro 3/Hangout via Xinhua
VIENTIANE: The government plans to renegotiate power purchase agreements with hydropower plant developers that sell power to the state for countrywide distribution, with the aim of reducing soaring electricity bills and easing the burden of domestic consumers.
The cabinet endorsed the plan at a meeting last week with provincial governors and key state agencies, and the meeting agreed to push for a cut in electricity purchasing rates.
Currently, Électricité du Laos (EDL), the state enterprise that oversees domestic power distribution, purchases electricity at an average cost of 6.2 US cents per kilowatt-hour (kWh) — equivalent to 1,260 kip — but sells it to households for an average of three cents (approximately 647 kip/kWh). This pricing disparity means the government provides substantial subsidies.
According to a plan obtained by the Vientiane Times, EDL is preparing to renegotiate its contracts with power producers in the hope of securing lower purchasing prices, with the aim of reducing electricity rates and easing the financial burden on consumers.
Power bills rose sharply after the government introduced a new tiered pricing system in February for the years 2025-2029. As a result, the cost of electricity for households consuming 0-25 kWh per month jumped from 355 kip in January (before the price hike) to 679 kip per kWh in July — a 91.27 per cent increase. Higher energy consumption incurs higher rates.
If left unchanged, the rates are set to rise further. By 2029, households using 0-25 kWh per month will pay 911 kip per kWh, while those consuming over 1,500 kWh will face charges of up to 2,223 kip per kWh.
The adjustment is part of the government's broader effort to reform EDL, which has been operating at a loss for many years and has accumulated substantial debt. EDL attributes its financial woes to massive investment in the expansion of infrastructure including power grids to rural areas — an essential but unprofitable undertaking - to ensure more people have access to power.
The dramatic rise in electricity bills has sparked public complaints, with this concern dominating debate during the recent 9th Ordinary Session of the National Assembly.
While the government defended the price adjustment as necessary for EDL's financial health, lawmakers called for the government to reconsider, warning of the economic strain on households and businesses already grappling with high-level inflation and soaring living costs for years.
The government's spokesperson Sonexay Sitphaxay told reporters that last week's meeting adopted proposed solutions.
'The meeting agreed in principle to approve a report on the review of electricity price adjustments and proposed solutions,' he said, referring to the report presented and discussed at the meeting.
He specified the renegotiation of power purchasing contracts as a key measure.
EDL's statistics suggest that its subsidy extends beyond the basic power purchase price. The full cost structure of electricity — known as the base electricity tariff — includes four main components: power purchase costs (both domestic and imported), system power loss, operation and maintenance expenses, and exchange rate/inflation adjustments due to dollar-based purchases.
Altogether, the average base tariff reaches 7.29 US cents (1,567 kip) per kWh, while the average household retail rate remains at just three cents (647 kip) per kWh.
In addition to contract renegotiations, the government pledged to modernise electricity metering and payment systems to improve transparency and reduce billing errors, which have also triggered public complaints in previous cases. - Vientiane Times/ANN
Orange background

Try Our AI Features

Explore what Daily8 AI can do for you:

Comments

No comments yet...

Related Articles

Trump tariffs leave costly China supply question unanswered; Indonesia among countries deeply affected
Trump tariffs leave costly China supply question unanswered; Indonesia among countries deeply affected

The Star

time2 hours ago

  • The Star

Trump tariffs leave costly China supply question unanswered; Indonesia among countries deeply affected

JAKARTA (Bloomberg): President Donald Trump's recent flurry of trade deals have given Asian exporters some clarity on tariffs, but missing are key details on how to avoid punitive rates that target China's supply chains. Trump unveiled tariffs of 20% for Vietnam and 19% for Indonesia and the Philippines, signaling those are the levels the US will likely settle on for most of Southeast Asia, a region that ships US$352 billion worth of goods annually to the US. He's also threatened to rocket rates up to 40% for products deemed to be transshipped, or re-routed, through those countries - a move largely directed at curbing Chinese goods circumventing higher US tariffs. But still unclear to manufacturers is how the US will calculate and apply local-content requirements, key to how it will determine what constitutes transshipped goods. South-East Asian nations are highly reliant on Chinese components and raw materials, and US firms that source from the region would bear the extra tariff damage. That's left companies, investors and economists facing several unanswered questions about Trump's tariffs that appear aimed at squeezing out Chinese content, according to Deborah Elms, head of trade policy at the Hinrich Foundation in Singapore. "Is that raw materials? All raw materials? Above a certain percentage?' she said. "How about parts? What about labor or services? What about investment?' In an agreement with Indonesia last week, the White House said the two countries would negotiate "rules of origin' to ensure a third country wouldn't benefit. The deal with Vietnam earlier this month outlined a higher 40% tariff rate for transshipped goods. And Thai officials, who have yet to secure a deal, detailed that they likely need to boost local content in exports to the US. Missing Details The Trump administration isn't providing much clarity on the matter right now. US officials are still working out details with trading partners and looking at value-based local content requirements, to ensure exports are more than just assembled imported parts, according to a person familiar with the matter, who didn't want to be identified discussing private talks. A senior Trump administration official also said this week that details on the approach to transshipment are expected to be released before Aug. 1, the deadline for when higher US tariffs kick in. Some factories are already adjusting their supply chains to comply with rules that will require more locally-made components in production. Frank Deng, an executive at a Shanghai-based furniture exporter with operations in Vietnam - and which gets about 80% of business from the US - said in an interview his firm is making adjustments as authorities appear to be more strictly enforcing country-of-origin rules. Vietnam has always had specific local content requirements for manufacturers, Deng added, including that a maximum of 30% of the volume of raw materials originates from China, and the value after production in Vietnam must be 40% higher than the imported raw materials. "We've been struggling to meet all the standards so that we can still stay in the game,' Deng said. "But I guess that's the only way to survive now.' For most of Southeast Asia, reducing the amount of Chinese-made components in manufacturing will require a complete overhaul of their supply chains. Estimates from Eurasia Group show that Chinese components make up about 60% to 70% of exports from Southeast Asia - primarily industrial inputs that go into manufacturing assembly. About 15% of the region's exports now head to the US, up about four percentage points from 2018. Local Content The US has become increasingly vigilant about China's ability to bypass US trade tariffs and other restrictions through third countries since Trump's first trade war in 2017. Thailand signaled its frustration over the lack of clarity for how much local content is needed in goods exported to the US to avert transshipment rates, but noted it will likely be much higher than a traditional measure of 40%. "From what we've heard, the required percentage could be significantly higher, perhaps 60%, 70%, or even 80%,' Deputy Prime Minister Pichai Chunhavajira said July 14. "Emerging countries or new production bases are clearly at a disadvantage,' he said, as their manufacturing capabilities are still at an early stage and must rely on other countries for raw goods. Vietnam, Thailand and Malaysia have all taken steps this year to address Trump's concerns, increasing scrutiny of trade that passes through their ports including new rule-of-origin policies that centralize processing and imposing harsh penalties on transshippers. Developing nations may still struggle to enforce Trump's rules or comply with the rules if it means going up against China, their largest trading partner and geopolitical partner. "The reality is it's not enforceable at all,' said Dan Wang, China director at Eurasia Group. "Chinese companies have all kinds of ways to get around it and those other countries have no incentive to enforce those measures, or capacity to collect the data and determine local content.' -- Reports from Patpicha Tanakasempipat, Skylar Woodhouse and Nguyen Dieu Tu Uyen. -- ©2025 Bloomberg L.P.

Taiwan recall vote fails, opposition lawmakers keep seats
Taiwan recall vote fails, opposition lawmakers keep seats

The Sun

time2 hours ago

  • The Sun

Taiwan recall vote fails, opposition lawmakers keep seats

TAIPEI: Taiwan opposition lawmakers survived a major recall election on Saturday, thwarting a bid to oust one-fifth of the island's parliamentarians - a move supporters had hoped would send a message to China but that opponents said was an assault on democracy. All recall votes against 24 lawmakers from the largest opposition party, the Kuomintang (KMT), were rejected, according to live vote counts by Taiwanese media. The voting followed a campaign begun by civic groups. The election result will come as a blow to President Lai Ching-te's Democratic Progressive Party, which has missed an opportunity to reshape the Taiwan legislature and regain its majority. The government said the island's largest-ever recall vote had faced 'unprecedented' election interference by China, which claims the democratically governed island as its own - a claim Taiwan rejects. While Lai won last year's presidential election, the DPP lost its legislative majority. The opposition has flexed its muscles since then to pass laws the government has opposed and impose budget cuts, complicating efforts to boost defence spending in particular. KMT Chairman Eric Chu thanked Taiwan's voters and called for Lai to apologise and reflect on his own governance. 'One should not lose the elections and then call for malicious recalls. One should not seek for one-party dominance and destroy democracy,' he told a press briefing in Taipei. 'Most importantly, the people of Taiwan chose stability and chose a government that gets things done, rather than political infighting.' The political drama comes as China ramps up a military and diplomatic pressure campaign against Taiwan to assert the territorial claims that Lai and his government reject. Lai has offered talks with Beijing many times but been rebuffed. It calls him a 'separatist'. The heated recall campaign has been closely watched by China, whose Taiwan Affairs Office and state media have repeatedly commented on the vote and used some of the same talking points as the KMT to lambast Lai, Reuters reported this week. Taipei this week said Beijing was 'clearly' trying to interfere in its democracy and it was up to Taiwan's people to decide who should be removed from or stay in office. Wu Szu-yao, secretary general of the DPP's legislative caucus, said the party respected the voters' decision with pleasure, adding that the result would only strengthen the DPP's 'anti-communist and pro-Taiwan' stance. 'This time we saw China was trying everything it could to intervene,' she told reporters at party headquarters in Taipei, pointing to Chinese military pressure and a disinformation campaign. 'We must be more vigilant against their possible malicious intentions toward Taiwan.' The groups seeking the recalls have said theirs is an 'anti-communist' movement, accusing the KMT of selling out Taiwan by sending lawmakers to China, not supporting defence spending and bringing chaos to parliament. The KMT rejects the accusations, denouncing Lai's 'dictatorship' and 'green terror' - referring to the DPP's party colour. The KMT campaigned against what it called a 'malicious' recall that failed to respect the result of last year's parliamentary election, saying they have simply been keeping lines of communication open with Beijing and exercising legitimate oversight of Lai's government. Recall votes for seven other KMT lawmakers will be held on August 23. - Reuters

58th AMM Highlights ASEAN's Balancing Act Amid Superpower Rivalry
58th AMM Highlights ASEAN's Balancing Act Amid Superpower Rivalry

Barnama

time2 hours ago

  • Barnama

58th AMM Highlights ASEAN's Balancing Act Amid Superpower Rivalry

Analysts believe that the engagement by both powers reflects ASEAN's growing strategic importance amid shifting global dynamics, with China projecting a stable diplomatic approach and the US seeking to re-establish trust in the region. KUALA LUMPUR, July 25 (Bernama) -- The presence of China and the United States (US) at the 58th ASEAN Ministerial Meeting (AMM) and Related Meetings has reinforced the grouping's zest to maintain regional peace and neutrality amid rising superpower rivalry and heightened Malaysia's diplomatic credibility as a trusted partner and future bridge-builder among competing powers. Similarly, US Secretary of State Marco Rubio's presence at Kuala Lumpur signalled Washington's endeavour to re-establish ties with Southeast Asia as a security and economic partner, more so after the chaos caused by America's sweeping tariffs, most of which will take effect come August. Amid renewed geopolitical competition, an analyst opined that China's Foreign Minister Wang Yi's active engagement reflected Beijing's evolving foreign policy posture and its desire to align with ASEAN's principles of peace and neutrality. 'Wang's participation was a productive time for China. It was an opportunity to show its international standing and willingness towards dialogue,' said Dr Rowena Abd Razak, a historical consultant and an Associate with IMAN Research (A Kuala Lumpur-based think tank which focuses on the domains of protective security, peacebuilding and sustainable development). She noted that China's reiteration of support for the Zone of Peace, Freedom and Neutrality (ZOPFAN), along with Wang's meeting with Rubio, demonstrated Beijing's openness to working within international frameworks. Undoubtedly a feather in the cap for ASEAN, 'these moves undeniably showcased China's ability to play a savvy foreign policy game - one that is markedly different from perceived US aggression and the unpredictability of (Donald) Trump's presidency,' she said. Rowena added that Wang's conduct during the meetings reflected an alignment with ASEAN's aspiration to maintain peace and advance a nuclear-free Southeast Asia. Despite China being an economic superpower and Southeast Asia's dependence on the Chinese economy, Wang's approach also showed deference to ASEAN centrality and Malaysia's role as the regional bloc's Chair this year, she said. From an economic perspective, she said Beijing is capitalising on the region's growth potential, mainly as the US adopts increasingly protectionist policies. She cited the proposed upgrade of the China-ASEAN Free Trade Agreement (CAFTA 3.0) as reflecting Beijing's vision of deeper integration with the region. 'Beijing sees ASEAN as an important zone of trade and exchange, particularly amid growing US economic isolation,' she said, referring to the debilitating tariffs imposed on ASEAN member states. 'Wang is expressing Beijing's view of ASEAN's importance and positioning China as a champion for the region,' she added. WASHINGTON RECOVERS LOST GROUND Concurring with Rowena, Universiti Malaya (UM) Security and International Relations analyst Collins Chong Yew Keat said this year's AMM served as a platform for ASEAN to assert its relevance amid intensifying great power competition. Rubio's attendance reflected Washington's attempt to re-engage the region more consistently and rebuild strategic trust. He attributed this to the US attempting to recover lost ground and re-establish itself as a security and economic partner. 'This year's meetings marked a turning point in US efforts to restore credibility and demonstrate dependable support for ASEAN centrality, especially after years of transactional diplomacy. 'While China's rise has been structured and steady, the US is now working to show it remains committed to ASEAN's future,' he said. Rubio's reaffirmation of support for ASEAN principles – neutrality, regional autonomy, and freedom of navigation – was significant, especially amid tensions in the South China Sea and the Taiwan Strait. 'The emphasis on shared values, rules-based order and connectivity offered by Rubio provides a needed contrast to China's assertiveness,' he added. Still, Collins said ASEAN must balance engagement with both powers without eroding unity or compromising neutrality. MALAYSIA ACTS AS A BRIDGE-BUILDER Collins also said this year's AMM tested ASEAN's strategic maturity as the global order becomes more fragmented. It seemed to have passed with flying colours. He said Washington's clearer messaging and sustained high-level participation reflected an understanding that past diplomatic absences had created a vacuum increasingly filled by China. 'ASEAN is now in the spotlight to prove that it remains a relevant and cohesive force amid competing frameworks like the Quad, a grouping comprising Australia, India, Japan and the US and AUKUS, the trilateral security partnership between Australia, the United Kingdom and the US. 'There is now recognition in Washington that inconsistency has damaged trust in the region,' he said. Looking ahead, Collins said that Malaysia's ASEAN Chairmanship for the remainder of 2025, especially at the upcoming summit and with leaders of dialogue partners, possibly including US President Trump, will be pivotal in steering the bloc through a complex regional environment. He added that Putrajaya, Malaysia's federal administrative capital, has the diplomatic credibility to act as a trusted interlocutor between competing powers. 'Malaysia must step forward as a bridge-builder to ensure ASEAN remains cohesive while promoting inclusive, rules-based cooperation with all major powers. 'Malaysia's leadership will be critical in strengthening ASEAN mechanisms, advancing economic resilience and anchoring strategic convergence based on mutual respect and autonomy,' he said. Wang participated in key sessions during the AMM, including the ASEAN-China and ASEAN Plus Three (APT) meetings. Rubio, on his first official visit to Asia, participated in the ASEAN-US Foreign Ministers' Meeting and held bilateral talks with Wang on the sidelines. The meetings, held from July 8 to 11, were hosted under Malaysia's 2025 ASEAN Chairmanship, with the theme 'Inclusivity and Sustainability'. -- BERNAMA BERNAMA provides up-to-date authentic and comprehensive news and information which are disseminated via BERNAMA Wires; BERNAMA TV on Astro 502, unifi TV 631 and MYTV 121 channels and BERNAMA Radio on FM93.9 (Klang Valley), FM107.5 (Johor Bahru), FM107.9 (Kota Kinabalu) and FM100.9 (Kuching) frequencies. Follow us on social media : Facebook : @bernamaofficial, @bernamatv, @bernamaradio Twitter : @ @BernamaTV, @bernamaradio Instagram : @bernamaofficial, @bernamatvofficial, @bernamaradioofficial TikTok : @bernamaofficial

DOWNLOAD THE APP

Get Started Now: Download the App

Ready to dive into a world of global content with local flavor? Download Daily8 app today from your preferred app store and start exploring.
app-storeplay-store