Applying the Capital Asset Pricing Model in Identifying the Electricity Retail Price in Ho Chi Minh City, Vietnam

Minh Nguyen and Nguyen Duy Hoang
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Nguyen Duy Hoang: Ho Chi Minh City Power Corporation, Vietnam

International Journal of Energy Economics and Policy, 2017, vol. 7, issue 2, 185-192

Abstract: This paper applies the capital asset pricing model to calculate the expected return rate equivalent to electricity retail price in Ho Chi Minh City (HCMC), with observed 1464 h of HCMC Power Corporation. The study suggests the model of calculate the electricity retail price so that government has more tools to adjust the electricity prices in electricity market, and recommends an electricity retail price list of 12 levels, with the minimum sale price of 965 VND1/kWh and maximum sale price of 1675 VND/kWh. Specifically, with current electricity sale price of 1447 VND/kWh, the HCMC Power Corporation reaches the highest return rate of 11.7% and the return rate fluctuates from -12% to 11.7% (price of 1447 VND/kWh with rf = 6%). The sensitive analysis shows that from rf = 12% above, the return rate always reaches the maximum point at price of 1313 VND/kWh (It is an average cost to produce 1 kWh)

Keywords: Capital Asset Pricing Model; Electricity Retail Price; Electricity Market (search for similar items in EconPapers)
JEL-codes: Q4 (search for similar items in EconPapers)
Date: 2017
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Persistent link: https://EconPapers.repec.org/RePEc:eco:journ2:2017-02-24

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