Allow electricity prices to be adjusted once every 3 months.

The Government Office has just issued document No. 05/2024/QD-TTg dated March 26, 2024, a Decision stipulating the mechanism for adjusting the average retail electricity price, replacing Decision 24 issued in 2017.

The latest decision allows shortening the minimum time between electricity price adjustments from 6 months to 3 months. However, this does not mean that electricity prices will be adjusted every 3 months.

According to the decision, the average electricity selling price is determined based on the costs of electricity generation, the cost of purchasing electricity transmission, distribution and retail services, electricity system dispatch and electricity market transaction management, electricity system ancillary service costs, industry operation and management costs, and other allocated costs, and only includes those costs directly related to the production and supply of electricity by Vietnam Electricity Group (EVN)...

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

When the average electricity selling price decreases by 1% or more compared to the current average electricity selling price, the electricity price is allowed to be adjusted downwards accordingly.

When the average electricity selling price increases by 3% or more compared to the current average electricity selling price, the electricity price is allowed to be adjusted upwards.

The minimum time interval for adjusting the average electricity selling price is 3 months from the last electricity price adjustment.

Regarding the mechanism for adjusting the average electricity selling price during the year, the Decision clearly states: If, after updating calculations, the calculated average electricity selling price is 1% or more lower than the current average electricity selling price, EVN Group is responsible for adjusting the average electricity selling price downwards accordingly. Within 5 working days from the date of adjustment, EVN is responsible for preparing a report to the Ministry of Industry and Trade, which will preside over and coordinate with relevant ministries and agencies for inspection and supervision.

In the event that, after recalculation and updating, the average electricity selling price needs to be adjusted higher than the current average electricity selling price by 3% to less than 5%, EVN will decide to adjust the average electricity selling price accordingly. Within 5 working days from the date of adjustment, EVN will prepare a report to the Ministry of Industry and Trade, which will coordinate with relevant ministries and agencies for inspection and supervision.

In the event that, after recalculation and updating, the average electricity selling price needs to be adjusted higher than the current average electricity selling price by 5% to less than 10%, EVN Group is permitted to adjust the average electricity selling price accordingly after reporting to and obtaining approval from the Ministry of Industry and Trade. Within 15 working days from the date of receiving EVN's complete pricing plan dossier, the Ministry of Industry and Trade is responsible for providing a written response for EVN to implement. Within 5 working days from the date of implementing the adjustment, EVN Group is responsible for reporting to the Ministry of Industry and Trade.

In cases where, after updated calculations, the average electricity selling price needs to be adjusted higher than the current average electricity selling price by 10% or more, or if it negatively impacts the macroeconomic situation, based on the electricity price plan submitted by EVN, the Ministry of Industry and Trade will preside over the review and verification process and send it to the Ministry of Finance and other relevant ministries and agencies for comments. Based on the comments from the Ministry of Finance and other relevant ministries and agencies, the Ministry of Industry and Trade will compile a report and submit it to the Prime Minister for consideration and feedback. If necessary, the Ministry of Industry and Trade will coordinate with relevant ministries and agencies to report to the Steering Committee for Price Management before reporting to the Prime Minister.

Based on feedback from the Ministry of Finance and other relevant ministries and agencies, the Ministry of Industry and Trade will compile and report to the Prime Minister for consideration and comments. If necessary, the Ministry of Industry and Trade will coordinate with relevant ministries and agencies to report to the Steering Committee for Price Management before reporting to the Prime Minister.

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