New regulations on mechanism and time for adjusting average retail electricity price

Adjust average retail electricity price every 3 months

Principles for adjusting average retail electricity prices

Decree No. 72/2025/ND-CP stipulates that every year, after Vietnam Electricity Group publicly announces the cost of electricity production and business in year N-2, the average retail electricity price in year N is reviewed and adjusted according to objective fluctuations in input parameters of all stages (power generation, power transmission, power distribution - retail, power system operation and management of electricity market transactions, power system ancillary services and industry operation - management) and the allocation of other costs not included in the electricity price.

During the year, the average retail electricity price is reviewed and adjusted based on updated electricity generation costs, electricity purchase costs from power plants providing ancillary services according to basic input parameters in the electricity generation stage and other costs not included in the electricity price.

The Decree clearly states: When the average retail electricity price decreases by 1% or more compared to the current average retail electricity price, the electricity price is allowed to be adjusted down accordingly.

When the average retail electricity price increases by 2% or more compared to the current average retail electricity price, the electricity price is allowed to be adjusted upward.

The average retail electricity price is calculated according to the provisions of Article 4 of this Decree. In case the calculated average retail electricity price is outside the price range, it shall only be considered for adjustment within the price range prescribed by the Prime Minister. Vietnam Electricity Group shall be allowed to increase or decrease the average retail electricity price within the price range according to the mechanism prescribed in Articles 5 and 6 of this Decree.

In case the average retail electricity price needs to be adjusted to be 10% or higher than the current average retail electricity price, the Ministry of Industry and Trade shall preside over and coordinate with relevant ministries and agencies to inspect, review and report to the Government for consideration and comments. If necessary, the Ministry of Industry and Trade shall coordinate with relevant ministries and agencies to report to the Price Management Steering Committee before reporting to the Government.

Adjustment of average retail electricity price must be carried out publicly and transparently.

Average retail electricity price

The Decree stipulates that the average retail electricity price is established on the basis of the cost of electricity generation, the cost of purchasing electricity transmission services, electricity distribution - retail, power system operation and management, electricity market transaction management, electricity system auxiliary service costs, industry operation - management costs, other allocated costs and only includes costs directly serving the production and supply of electricity of Vietnam Electricity Group to ensure the ability to operate, supply electricity and meet investment needs according to the approved plan, in which the costs of each stage take into account the cost deductions according to regulations.

The average retail price of electricity in year N (G _BQ ) is determined according to the following formula:

In there:

C _PD : Total cost of power generation in year N (VND); determined by the following formula:

C _PD = C _TTĐ + C _DMT + C _BOT + C _TTN + C _NLTT + C NK

C _DVPT : Total cost of power plants providing auxiliary services to the power system in year N (VND), including the cost of testing the power plants;

C _TT : Total cost of purchasing electricity transmission services in year N (VND);

C _PP-BL : Total cost of electricity distribution - retail and standard profit in year N (VND), including the cost of mobilizing backup generators of electricity customers to supplement the supply to the national power system in urgent situations that seriously threaten the ability to ensure electricity supply;

_General C: Total operating and management costs of the industry and standard profit for year N (VND);

C _DD : Total cost of purchasing power system operation and power market transaction management services in year N (VND);

_Other C: Total other costs not included in the electricity price, are costs that are allowed to be calculated but not included in the electricity price, including the unallocated revaluation exchange rate difference, the exchange rate difference not recorded and paid to power plants according to the agreement in the power purchase contract, calculated and allocated to the average retail electricity price of year N (VND);

A _TP : Total expected commercial electricity output for year N (kWh).

Regulations on adjusting average annual retail electricity prices

The Decree stipulates that based on the power supply and power system operation plan for year N issued by the Ministry of Industry and Trade, the electricity production and business costs for year N-2 of Vietnam Electricity Group, and the estimated results of electricity production and business in year N-1 (in case the electricity production and business costs for year N-1 have not been announced), before January 25 of year N, Vietnam Electricity Group shall calculate the average retail electricity price according to the above formula, comply with the requirements for documents as prescribed and perform as follows:

a) In case the calculated average retail electricity price decreases by 1% or more compared to the current average retail electricity price, Vietnam Electricity Group is responsible for reducing the average retail electricity price by the corresponding level. Within 05 working days from the date of adjustment, Vietnam Electricity Group is responsible for preparing a report to the Ministry of Industry and Trade for inspection and supervision;

b) In case the average retail electricity price needs to be adjusted to increase from 2% to less than 5% compared to the current average retail electricity price, Vietnam Electricity Group shall prepare a dossier of the average retail electricity price plan and report to the Ministry of Industry and Trade for inspection, review and comments. Within 15 working days from the date of receiving the complete dossier of the average retail electricity price plan from Vietnam Electricity Group, the Ministry of Industry and Trade shall be responsible for providing written comments. Vietnam Electricity Group shall decide to increase the average retail electricity price after receiving comments from the Ministry of Industry and Trade. Within 05 working days from the date of adjustment, Vietnam Electricity Group shall be responsible for reporting to the Ministry of Industry and Trade for supervision;

c) In case the average retail electricity price needs to be adjusted to increase from 5% to less than 10% compared to the current average retail electricity price, Vietnam Electricity Group is allowed to adjust the average retail electricity price to the corresponding level after reporting and being approved by the Ministry of Industry and Trade. Within 15 working days from the date of receiving the complete dossier on the average retail electricity price plan of Vietnam Electricity Group, the Ministry of Industry and Trade is responsible for responding in writing for Vietnam Electricity Group to implement. Within 05 working days from the date of adjustment, Vietnam Electricity Group is responsible for reporting to the Ministry of Industry and Trade for supervision;

d) In case the average retail electricity price needs to be adjusted to increase by 10% or more compared to the current average retail electricity price, based on the electricity price plan submitted by Vietnam Electricity Group, the Ministry of Industry and Trade shall preside over the inspection, review and send it to relevant ministries and agencies for comments. Based on the comments of relevant ministries and agencies, the Ministry of Industry and Trade shall synthesize and report to the Government for consideration and comments. If necessary, the Ministry of Industry and Trade shall coordinate with relevant ministries and agencies to report to the Price Management Steering Committee before reporting to the Government.

Regulations on adjusting average retail electricity prices during the year

The Decree stipulates that before the 25th day of the first month of the second, third and fourth quarters, Vietnam Electricity Group shall determine the actual commercial electricity output of the previous quarter and the total cumulative commercial electricity output from the beginning of the year, estimate the commercial electricity output of the remaining months of the year; determine the electricity generation costs of the previous quarter, the cumulative electricity generation costs from the beginning of the year (including the cost of purchasing electricity from factories providing ancillary services), estimate the electricity generation costs of the remaining months of the year according to the basic input parameters in the electricity generation stage and update other costs not yet included in the average retail electricity price to recalculate the average retail electricity price according to the above formula (other parameters remain unchanged), comply with the requirements on documents as prescribed and perform as follows:

a) In case after the updated calculation, the calculated average retail electricity price is lower by 1% or more compared to the current average retail electricity price, Vietnam Electricity Group is responsible for adjusting the average retail electricity price down to the corresponding level. Within 05 working days from the date of adjustment, Vietnam Electricity Group is responsible for preparing a report to the Ministry of Industry and Trade for inspection and supervision;

b) In case after the updated calculation, the average retail electricity price needs to be adjusted to be higher than the current average retail electricity price from 2% to less than 5%, Vietnam Electricity Group shall prepare a dossier of the average retail electricity price plan and report to the Ministry of Industry and Trade for inspection, review and comments. Within 15 working days from the date of receiving the complete dossier of the average retail electricity price plan from Vietnam Electricity Group, the Ministry of Industry and Trade shall be responsible for providing written comments. Vietnam Electricity Group shall decide to increase the average retail electricity price after receiving comments from the Ministry of Industry and Trade. Within 05 working days from the date of adjustment, Vietnam Electricity Group shall be responsible for reporting to the Ministry of Industry and Trade for supervision;

c) In case after the updated calculation, the average retail electricity price needs to be adjusted higher than the current average retail electricity price from 5% to less than 10%, Vietnam Electricity Group is allowed to adjust the average retail electricity price to the corresponding level after reporting and being approved by the Ministry of Industry and Trade. Within 15 working days from the date of receiving the complete dossier on the average retail electricity price plan of Vietnam Electricity Group, the Ministry of Industry and Trade is responsible for responding in writing for Vietnam Electricity Group to implement. Within 05 working days from the date of adjustment, Vietnam Electricity Group is responsible for reporting to the Ministry of Industry and Trade for supervision;

d) In case after the updated calculation, the average retail electricity price needs to be adjusted to be 10% or more higher than the current average retail electricity price, based on the average retail electricity price plan submitted by Vietnam Electricity Group, the Ministry of Industry and Trade shall preside over the inspection, review and send it to relevant ministries and agencies for comments. Based on the comments of relevant ministries and agencies, the Ministry of Industry and Trade shall synthesize and report to the Government for consideration and comments. If necessary, the Ministry of Industry and Trade shall coordinate with relevant ministries and agencies to report to the Price Management Steering Committee before reporting to the Government.

Adjust average retail electricity price every 3 months

The Decree clearly stipulates that in case the average retail electricity price needs to be adjusted downward but the Vietnam Electricity Group does not adjust it downward, the Ministry of Industry and Trade is responsible for requesting the Vietnam Electricity Group to adjust the average retail electricity price downward. The Vietnam Electricity Group is responsible for implementing the request of the Ministry of Industry and Trade within 05 working days from the date of receiving the request.

If any errors are found in the results of calculating electricity prices according to regulations, the Ministry of Industry and Trade is responsible for requesting Vietnam Electricity to stop adjusting or readjust the average retail electricity price. Vietnam Electricity is responsible for implementing the request of the Ministry of Industry and Trade within 05 working days from the date of receiving the request.

According to regulations, the minimum time for adjusting the average retail electricity price is 03 months from the most recent electricity price adjustment.

Phuong Nhi

Source: https://baochinhphu.vn/quy-dinh-moi-ve-co-che-thoi-gian-dieu-chinh-gia-ban-le-dien-binh-quan-102250401145756615.htm