The Ministry of Industry and Trade has just sent a report to the Prime Minister with additional information on the proposal to adjust electricity prices every three months.
According to the new draft replacing Decision 24 on the mechanism for adjusting average retail electricity prices, the Ministry of Industry and Trade proposes to shorten the time for adjusting electricity prices from 6 months to once every 3 months. Thus, there will be a price change every quarter if the input cost of electricity prices continuously increases and the price will be updated a maximum of 4 times a year according to electricity generation costs.
In a report to the Prime Minister, the Ministry of Industry and Trade said that the mechanism for adjusting retail electricity prices is being implemented according to Decision 24/2017 and is applied according to the rule: the time between two adjustments is 6 months. The increase in electricity prices will be implemented if the management agency reviews, checks and identifies input costs that cause the electricity price to increase by 3% or more.
The Ministry of Industry and Trade said that although there are regulations on increasing electricity prices, the implementation of this decision is not regular. Since 2017, electricity prices have only been adjusted 3 times (in 2017, 2019 and May 2023).
According to the Ministry of Industry and Trade, adjusting electricity prices every three months will help update costs more fully.
In addition, in reality, the average electricity price adjustment in recent years has often been lower than the proposed plan of Vietnam Electricity Group (EVN) and the review results of competent State agencies. This leads to accumulated costs because the adjustment level is not enough to recover the arising costs that have not been calculated or not fully calculated in the electricity price.
"The proposal to shorten the minimum price adjustment period from 6 months to 3 months is appropriate. This ensures that costs do not accumulate too much, affecting EVN's financial balance and gradually adapts electricity prices to fluctuations in input parameters according to the market," the Ministry of Industry and Trade argued, adding that "ministries and branches did not object when asked for opinions."
Regarding some expert opinions related to electricity price adjustment, especially the proposal to ensure transparency, avoid abuse of power and establish an independent Energy Council outside of EVN, the Ministry of Industry and Trade said that the implementation of electricity price adjustment in recent years has become increasingly transparent with the participation of relevant ministries and agencies such as the Ministry of Finance and the State Capital Management Committee. Therefore, the establishment of an independent Energy Council is unnecessary.
Regarding the adjustment of electricity prices, in early August, EVN sent a document to the Ministry of Industry and Trade stating that it is ready to adjust the average retail electricity price in the direction of increasing or decreasing according to the market if input costs increase by 3% or more. The Group will reduce electricity prices if input costs decrease by 1%.
EVN also supports the Ministry of Industry and Trade inviting independent consultants to examine the electricity production and business cost reports of EVN and its member units to provide transparent information to the public.
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