The above information is stated in the Decision regulating the mechanism for adjusting average retail electricity prices replacing Decision 24/2017/QD-TTg approved by the Prime Minister on March 26.

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Electricity prices can be adjusted every 3 months. Photo: Hoang Giam

Accordingly, the average electricity selling price is established based on the cost of electricity generation, cost of purchasing electricity transmission services, electricity distribution - retail, power system dispatch and electricity market transaction management, cost of electricity system auxiliary services, industry operation - management costs, other allocated costs and only includes costs directly serving the production and supply of electricity of Vietnam Electricity Group (EVN)...

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

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

When the average electricity price increases by 3% or more compared to the current average electricity price, the electricity price is allowed to be adjusted upwards.
The minimum time for adjusting the average electricity price is 03 months from the most recent electricity price adjustment.

Regarding the mechanism for adjusting the average electricity price in the year, the Decision clearly states: In case after the updated calculation, the calculated average electricity price is lower by 1% or more compared to the current average electricity price, EVN Group is responsible for adjusting the average electricity price down to the corresponding level. Within 5 working days from the date of adjustment, EVN is responsible for preparing a report to the Ministry of Industry and Trade to preside over and coordinate with relevant ministries and agencies for inspection and supervision.

In case after the updated calculation, the average electricity price needs to be adjusted higher than the current average electricity price from 3% to less than 5% , EVN decides to adjust the average electricity price to increase at the corresponding level. Within 5 working days from the date of adjustment, EVN will prepare a report to the Ministry of Industry and Trade to preside over and coordinate with relevant ministries and agencies to inspect and monitor.

In case after the updated calculation, the average electricity price needs to be adjusted higher than the current average electricity price from 5% to less than 10%, EVN Group is allowed to adjust the average electricity price to increase at 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 price plan dossier of EVN, the Ministry of Industry and Trade is responsible for responding in writing for EVN to implement. Within 5 working days from the date of adjustment, EVN Group is responsible for reporting to the Ministry of Industry and Trade.

In case after the updated calculation, the average electricity price needs to be adjusted to be 10% or more higher than the current average electricity price or affect the macro-economic situation, based on the electricity price plan submitted by EVN, the Ministry of Industry and Trade shall preside over the inspection, review and send it to the Ministry of Finance and relevant ministries and agencies for comments. Based on the comments of the Ministry of Finance and relevant ministries and agencies, the Ministry of Industry and Trade shall synthesize and report to the Prime Minister 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 Prime Minister.

According to the Electricity Regulatory Authority (Ministry of Industry and Trade), the Decision proposing to shorten the minimum time between two price adjustments from 6 months to 3 months does not mean that electricity prices will be adjusted every 3 months, but also depends on the assessment of the impact on the macro economy, as well as on whether the results of the updated calculation of electricity prices are sufficient to be considered for adjustment according to regulations.

In fact, the Prime Minister’s Decision 24/2017/QD-TTg also allowed electricity prices to be adjusted every 6 months. However, for many reasons, the electricity price was kept unchanged for 4 years.

Using 700 kWh or more will apply the highest electricity price of more than 3,600 VND/kWh. The Ministry of Industry and Trade proposed a new tiered electricity price list, according to which the lowest price is over 1,806 VND/kWh, the highest price is more than 3,600 VND/kWh. Households using 710 kWh or less (accounting for about 98% of households) will have to pay less electricity.