The Ministry of Industry and Trade has submitted a draft amendment to Decision 24/2017 on the mechanism for adjusting the average retail electricity price, sent to the Government.
In this draft, the Ministry of Industry and Trade still proposes that the electricity price be calculated with additional costs that were not previously included, such as exchange rate differences. The adjustment time for electricity prices is expected to be shortened from 6 months to 3 months.
Therefore, there will be 4 price adjustment periods per year and the prices will be updated quarterly based on electricity generation costs. This is not a new proposal, in the previous draft, the Ministry of Industry and Trade also proposed to shorten the electricity price adjustment time to 3 months per period.
EVN is authorized to decide on electricity price increases below 5%
The proposed average retail electricity price will still have price increases or decreases within specific ranges, as stated in the previous draft. Accordingly, if the input parameters of the stages such as generation, transmission, distribution… reduce the average retail electricity price by 1% or more compared to the current average price, Vietnam Electricity (EVN) is responsible for reducing the price accordingly. However, if the average electricity price increases by 3% or more compared to the current price, EVN is allowed to adjust the price upwards. EVN will prepare reports to be submitted to the Ministry of Industry and Trade and the Ministry of Finance for inspection and supervision.
Regarding the authority to adjust electricity prices, EVN is allowed to independently decide on reductions or increases below 5%; the Ministry of Industry and Trade has the authority to approve EVN’s decisions on adjustments and increases from 5% to less than 10%; the Prime Minister will provide opinions for EVN to decide on adjustments when the increase is from 10% or more, or when it affects the macro economy.
The Ministry of Industry and Trade will still be responsible to the government for state management of electricity, electricity usage, including electricity pricing. The Ministry of Industry and Trade will be the agency guiding EVN in calculating the average retail electricity price, implementing price adjustments, and overseeing and supervising.
The Ministry of Industry and Trade also proposes the participation and coordination of relevant ministries and agencies in accordance with their functions, tasks, and legal regulations.
To make the process of reviewing electricity price adjustments more transparent, the Ministry of Industry and Trade proposes to add the responsibility of the General Statistics Office in assessing the impact of electricity price adjustments on the macro economy. EVN will provide relevant data for this agency to have a basis for statistics and evaluation.
