Proposal for EVN to be allowed to increase or decrease electricity prices by 5% every 3 months

The Ministry of Industry and Trade has just proposed a new plan to amend the mechanism for adjusting the average retail electricity price. Based on the plan for power supply and operation of the power system, and the results of the inspection of electricity production and business costs, Vietnam Electricity Group (EVN) will calculate the average retail electricity price.

In case the average electricity price decreases by 1% or more compared to the current average electricity price and within the prescribed price range, EVN will be responsible for reducing the price at the corresponding level. To implement the price reduction, EVN will prepare a report to the Ministry of Industry and Trade and the Ministry of Finance for inspection and supervision.

In case the average electricity price needs to be adjusted to increase from 3% to less than 5% compared to the current price and within the price range, EVN is allowed to adjust the price increase at the corresponding level.

The expected time for adjusting electricity prices is 3 months, instead of 6 months as before.

After increasing the price, EVN prepared a report to the Ministry of Industry and Trade, the Ministry of Finance and the State Capital Management Committee at Enterprises for inspection and supervision.

If the electricity price increases from 5% to less than 10% compared to the current price and within the price range, EVN will report and get approval from the Ministry of Industry and Trade to increase the price.

With an average retail electricity price increase of 10% or more compared to the current level or outside the price range, affecting the macro economy, the Ministry of Industry and Trade will report to the Prime Minister for consideration and comments.

The minimum time for adjusting the average electricity price is 3 months from the most recent electricity price adjustment, shorter than the current regulation of 6 months.

Based on the power supply and system operation plan issued by the Ministry of Industry and Trade and the results of the inspection of electricity production and business costs, EVN will calculate the average electricity selling price.

Current regulations in Decision 24/2017 of the Prime Minister on the mechanism for adjusting average retail electricity prices state: EVN is allowed to adjust electricity prices when input parameters fluctuate by 3% or more compared to the current average level.

Conversely, in case input parameters fluctuate causing the average electricity price to decrease compared to the current level, the electricity price will also be adjusted downward.

If the average electricity price increases by 3-5% compared to the current price, EVN is allowed to decide to adjust the price; if the average retail price increases from 5% to less than 10%, the authority belongs to the Ministry of Industry and Trade, and if it increases by 10% or more, it will be reported to the Government for comments.

Electricity is a 'sensitive' commodity, it is necessary to legalize electricity price adjustment . It is necessary to regulate electricity price policies according to market mechanisms and electricity trading activities to ensure development, promote a competitive, transparent and fair electricity market.

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