Electricity price increase from 2-5% EVN can decide by itself every 3 months

The Ministry of Industry and Trade has the latest proposal on the mechanism for adjusting average retail electricity prices - Photo: EVN

The Ministry of Industry and Trade has just sent a report to Deputy Prime Minister Bui Thanh Son on the draft decree regulating the mechanism and time for adjusting average retail electricity prices.

The draft was completed after the Ministry of Industry and Trade sought additional opinions from the State Bank regarding the average interbank interest rate for a 6-month period as a basis for calculating the standard profit level for calculating profits for the electricity industry.

What is the basis for increasing/decreasing electricity prices?

After being revised and finalized, the draft regulation on the mechanism and time for adjusting the average retail electricity price developed by the Ministry of Industry and Trade sets out the principle for adjusting the average retail electricity price, which is that every year after the Vietnam Electricity Group (EVN) publicly announces the cost of electricity production and business, the average retail price is considered for adjustment according to objective fluctuations in input parameters of all stages and the allocation of other costs not included in the electricity price.

Specifically, 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 adjusted up.

Electricity prices are calculated according to regulations, but if the average electricity price is outside the price range, it will only be considered for adjustment within the price range prescribed by the Prime Minister. EVN is allowed to increase or decrease the selling price within the price range.

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 coordinate with relevant ministries and branches to review and report to the Government for consideration and comments.

Accordingly, the average retail electricity price will be determined based on the costs of electricity generation, transmission, retail electricity distribution, system operation and management, electricity market transaction management, electricity system ancillary service costs, and industry management costs.

There are also other allocated expenses, and only include expenses directly serving EVN's electricity production and supply.

This cost will also include EVN's annual standard profit calculated based on the stages of electricity distribution, retail, industry operation and management, multi-purpose strategic hydropower plants and other dependent accounting power plants during the period when EVN has not participated in the competitive electricity market.

In addition, the ratio of after-tax profit to equity will not be lower than the average daily interbank interest rate for a 6-month term announced by the State Bank.

EVN's authority to decide for itself?

After having a basis for calculation, if the average retail electricity price decreases by 1% or more compared to the current retail price, EVN is responsible for reducing the selling price at the corresponding level and preparing a report to EVN for inspection and supervision.

If the average retail electricity price increases from 2% to less than 5% compared to the current price, EVN will prepare a plan for the average retail electricity price and report to the Ministry of Industry and Trade for inspection, review and comments as a basis for EVN to adjust the price. Thus, this level is lower than the current regulation of 3-5%.

With an increase of 5% or more to less than 10%, EVN is allowed to adjust the price accordingly after reporting to the Ministry of Industry and Trade and getting approval. With an average retail electricity price increase of 10% or more, the Ministry of Industry and Trade will check, review and collect opinions from relevant ministries and sectors, synthesize a report to the Government for consideration and comments.

In this draft, the Ministry of Industry and Trade maintains the proposal on the minimum time to adjust the average retail electricity price of 3 months from the most recent electricity price adjustment. Previously, the ministry proposed to adjust the electricity price every 2 months but later withdrew this proposal and kept the 3-month mark.

Previously, when giving comments on this plan, VCCI said that the time to adjust the average electricity price should be reconsidered at least 3 months to match the time of data synthesis.

Also because the mechanism for adjusting the average electricity price in the year is based on quarterly data, that is, data is compiled once every 3 months. This quarterly data compilation is also consistent with accounting practices.

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Source: https://tuoitre.vn/gia-dien-tang-tu-2-5-evn-co-the-duoc-tu-quyet-trong-3-thang-lan-20250327113732881.htm