Lao Prime Minister Thongloun Sisolith has announced a reduction in prices for power use following weeks of public anger at high costs, saying “This is something we have to do.”
“I have heard a lot of complaints about high power charges,” Thongloun said during a meeting of the Lao National Assembly on June 25.
“One restaurant owner said that he had closed his restaurant for the duration of the business lockdown [to contain the spread of coronavirus], but that his bills had doubled,” the prime minister said, adding that employees of the state-owned power company Electricite du Laos had read some meters incorrectly, claiming the meters were “broken.”
“I am now ordering Electricite du Laos to punish those corrupt employees and pay money back to their customers,” he said.
Earlier rate structures “were not really fair” and had disadvantaged low-income families and discouraged foreign investment, Thongloun said, noting that up to 70 percent of the Lao population use less than 150 kilowatt hours of power per month.
“So we, the government, proposed earlier this year to charge just half of a flat rate of 710 kip (U.S. $0.08) per kilowatt hour for those who use between 0 and 150 kilowatt hours per month, and to charge full price for those who use more than 150 kilowatt hours,” Thongloun said.
Because of business shutdowns to contain the spread of coronavirus, though, “people were staying home, using more power, and complaining of higher charges—which had doubled in some households,” he said.
Now, in new rates taking immediate effect and retroactive to April, consumers of from 0-150 kilowatt hours will be charged 355 kip (U.S. $0.04) per kilowatt hour, half of the flat rate of 710 kip (U.S. $0.08) per kilowatt hour previously in force, the prime minister said.
Charges will then climb incrementally, with power use of 461 and up then charged at the former flat rate, he said.
“The government knows that Electricite du Laos will lose 100 billion kip (U.S. $11 million) per year as a result of this new pricing system. But this is something we have to do,” he said.
'Wait and see'
Lao citizens welcomed the announced change but voiced caution in interviews with RFA on June 29, with one resident of Bolikhamxay province saying he will “wait to see” if any reduction to his bills is made.
“I’m going to wait to see. It’s hard now for people to pay their bills, because they’re so expensive. I’ll believe this if I see my bills reduced,” he said.
A resident of Khammuane province meanwhile said he was happy to see the prime minister address the problem of power costs, and will follow developments to see what happens.
“Yes, [the government] is adjusting the price of electricity, it’s changing the unit price,” he said, adding, “We don’t know the details yet.”
A restaurant owner in the capital Vientiane said, however, that he may see no benefit from the restructured costs, as his restaurant uses more than 461 kilowatt hours per month and will still have to pay the flat rate.
“The government is only resolving problems for the households. For us as a business, it will be the same price,” he said.
Power prices have become a sensitive issue in Laos, where people who were already poor before the COVID-19 pandemic slammed the economy now chafe at high rates in a country building billion-dollar hydropower dams on its major rivers to sell electricity to richer neighboring countries.
Reported by RFA’s Lao Service. Translated by Max Avary. Written in English by Richard Finney.