Circular 22/2025/TT-BCT calculation of the average electricity retail price

CIRCULAR

Prescribing the calculation of the average electricity retail price

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Pursuant to the Electricity Law dated November 30, 2024;

Pursuant to the Government's Decree No. 40/2025/ND-CP, dated February 26, 2025, defining the functions, tasks, powers and organizational structure of the Ministry of Industry and Trade;

Pursuant to the Government’s Decree No. 72/2025/ND-CP dated March 28, 2025, providing regulations on the mechanism and time frame for adjusting the average electricity retail price;

At the proposal of the Director of the Electricity Authority of Vietnam;

The Minister of Industry and Trade hereby promulgates the Circular prescribing the calculation of the average electricity retail price.

Chapter I

GENERAL PROVISIONS

Article 1. Scope and subjects of application

1. This Circular provides guidance on the calculation of the average electricity retail price in accordance with Article 4 of the Government’s Decree No. 72/2025/ND-CP dated March 28, 2025, providing regulations on the mechanism and time frame for adjusting the average electricity retail price (hereinafter referred to as Decree No. 72/2025/ND-CP).

2. This Circular applies to Vietnam Electricity (EVN), its member units, and relevant organizations and individuals.

Article 2. Interpretation of terms

For the purposes of this Circular, the following terms shall be construed as follows:

1. CPI means the consumer price index as published by the central statistical agency.

2. Power system and electricity market operator refers to the entity performing the functions of the national power system load-dispatching unit and electricity market transaction administration unit, as stipulated in the Electricity Law (currently the National Power System and Market Operator Company Limited - NSMO).

3. Electricity market energy price means the price per unit of electricity determined for each trading cycle, used to calculate electricity payment amounts in the electricity market.

4. Electricity market capacity price means the price calculated for each trading cycle and applied to calculate capacity payment amounts to electricity generating units in the electricity market.

5. Average electricity retail price means the electricity retail price determined based on the principle of calculating the total cost of electricity production and business and the average profit per 1 kWh of commercial electricity in each period.

6. Year N means the year in which the average electricity retail price is calculated in accordance with this Circular, from January 1 to December 31 of the calendar year.

7. Year N-1 means the calendar year immediately preceding year N.

8. Year N-2 means the calendar year immediately preceding year N-1.

9. BOT power plant means a power plant invested under the Build - Operate - Transfer form through a contract between the investor and the competent state agency.

10. Total commercial electricity output means the total electricity output sold to customers by Vietnam Electricity and the Power Corporations.

11. Power Corporation is a general term referring to the Northern Power Corporation, Southern Power Corporation, Central Power Corporation, Hanoi Power Corporation, and HoChiMinh City Power Corporation.

Chapter II

METHOD FOR CALCULATING THE AVERAGE ELECTRICITY RETAIL PRICE

Section 1

METHOD FOR CALCULATING THE ANNUAL AVERAGE ELECTRICITY RETAIL PRICE

Article 3. Method for calculating the annual average electricity retail price

1. The average electricity retail price in year N shall be calculated in accordance with the formula prescribed in Clause 2, Article 4 of Decree No. 72/2025/ND-CP.

2. The costs of electricity generation, ancillary service costs of the power system, costs of purchasing electricity transmission services, electricity distribution and retailing, power system load dispatch and electricity market transaction administration, and sector operation and management costs shall be determined respectively in accordance with Article 4, Article 5, Article 6, Article 7, Article 8, and Article 9 of this Circular.

3. The electricity output of power plants in year N shall be determined based on the electricity supply and national power system operation plan for year N.

4. The projected total commercial electricity output for year N shall be calculated by Vietnam Electricity in accordance with the electricity supply and national power system operation plan for year N.

5. The dossier on the annual average electricity retail price plan shall comply with Clause 2, Article 5 of Decree No. 72/2025/ND-CP.

Article 4. Method for calculating the total cost of electricity generation

1. The total cost of electricity generation in year N (C_PĐ) shall be determined according to the following formula:

C_PĐ= C_TTĐ + C_ĐMT + C_BOT + C_TTN + CN_LTT + C_NK

In which:

a) C_TTĐ: Total electricity purchase costs for year N (VND) from power plants directly and indirectly participating in the electricity market, determined in accordance with Clause 2 of this Article;

b) C_ĐMT: Total costs and regulated profits for year N (VND) from strategic multi-purpose hydropower plants and other dependent-accounting power plants in the stage of not yet participating in the competitive electricity market of Vietnam Electricity, determined in accordance with Clause 3 of this Article;

c) C_BOT: Total electricity purchase costs for year V (VND) from BOT power plants, determined in accordance with Clause 2 of this Article;

d) C_TTN: Total electricity purchase costs for year N (VND) from small-scale renewable energy power plants, determined in accordance with Clause 2 of this Article;

dd) C_NLTT: Total electricity purchase costs for year N (VND) from power plants utilizing renewable and new energy sources, including electricity storage systems, determined in accordance with Clause 2 of this Article;

e) C_NK: Total electricity purchase costs for year N (VND) from electricity imports, determined in accordance with Clause 2 of this Article.

2. The total electricity purchase cost from power plants directly and indirectly participating in the electricity market (excluding strategic multi-purpose hydropower plants and other dependent-accounting power plants during the period of not yet participating in the competitive electricity market of Vietnam Electricity), BOT power plants, small-scale renewable energy power plants, power plants using renewable and new energy sources including electricity storage systems, and importing electricity shall be determined based on the power purchase agreements and electricity market regulations, in which:

a) Electricity output of power plants shall comply with Article 3 of this Circular;

b) Electricity output of renewable energy and new energy power plants shall be provided by power system and electricity market operators;

c) Contractual output (Qc) of power plants directly participating in the electricity market shall be provided by power system and electricity market operators;

d) Average monthly electricity market energy price shall be calculated based on the electricity market simulation results by the power system and electricity market operators according to the electricity market operation plan for year N;

dd) Average monthly electricity market capacity price shall be
approved based on the electricity market simulation results by the power system and electricity market operators according to the electricity market operation plan for year N;

e) Electricity prices and input parameters for fuels and foreign exchange rates of power plants directly and indirectly participating in the electricity market, BOT power plants, power plants using renewable and new energy sources, and importing electricity shall be determined based on the electricity price used in the calculation of the electricity supply and national power system operation plan for year N. For power plants planned to be commissioned in year N for which electricity prices have not yet been determined, Vietnam Electricity shall be responsible for proposing estimated prices to calculate the cost for year N;

g) Electricity purchase cost from small-scale renewable energy power plants applying the avoided cost tariff shall be determined based on the avoided cost tariff for year N (if the avoided cost tariff for year N is not available, the avoided cost tariff for year N-1 shall apply), and the monthly structure of peak, normal, and off-peak electricity output by region in year N based on the projected monthly electricity output structure by region of year N-1;

h) Electricity purchase cost of power plants directly participating in the electricity market shall be calculated and provided by the power system and electricity market operator.

3. The method for determining the total costs and regulated profits for year N from strategic multi-purpose hydropower plants and other dependent-accounting power plants in the period of not yet participating in the competitive electricity market of Vietnam Electricity, is as follows:

a) The total cost from strategic multi-purpose hydropower plants and other dependent-accounting power plants during the period of not yet participating in the competitive electricity market of Vietnam Electricity shall be determined in accordance with the method prescribed by the Minister of Industry and Trade for calculating electricity generation costs of power plants in the period prior to their participation in the competitive electricity market, applicable to certain types of power plants;

b) The regulated profit shall be determined in accordance with Clause 5, Article 4 of Decree No. 72/2025/ND-CP.

Article 5. Method for calculating the total cost of power plants providing ancillary services to the power system

1. The total cost in year N of power plants providing ancillary services to the power system, including test-run costs of power plants, shall be determined in accordance with the power system ancillary service provision agreement, in which:

a) Electricity output shall be determined in accordance with Article 3 of this Circular;

b) Electricity prices and input parameters on fuels and exchange rates shall be determined based on the parameters used by the power system and electricity market operator in the preparation of the electricity supply and national power system operation plan for year N.

2. In cases where power plants or generating sets under Vietnam Electricity have entered into power purchase agreements (PPAs) with Power Corporations and participate in the provision of ancillary services to the power system, such power plants and generating sets shall be eligible for cost calculations related to fuel costs and variable operation and maintenance costs incurred during the period of providing ancillary services to the power system.

Article 6. Method for calculating the total cost of purchasing electricity transmission services

The total cost of purchasing electricity transmission services in year N (C_TT) shall be the total allowable electricity transmission revenue, determined in accordance with the regulations on the method, dossiers, procedures, and process for approval of electricity transmission service prices as promulgated by the Minister of Industry and Trade.

Article 7. Method for calculating the total cost of electricity distribution and retailing and the regulated profit

1. The total cost of electricity distribution and retailing in year N shall be the total electricity distribution and retailing cost in year N of the Power Corporations, determined in accordance with the regulations on the method, procedures, and process for approval of the wholesale electricity price bracket; the method for determining the wholesale electricity price; and the principal contents of the power purchase agreement, as promulgated by the Minister of Industry and Trade.

2. The regulated profit shall be determined in accordance with Clause 5, Article 4 of Decree No. 72/2025/ND-CP.

Article 8. Method for calculating the total cost of purchasing power system operation dispatch services and electricity market transaction administration services

The total cost of purchasing power system operation dispatch services and electricity market transaction administration services in year N (C_ĐĐ) shall be the total allowable revenue in year N from power system dispatch and electricity market transaction administration services of the power system and electricity market operator, determined in accordance with the regulations on the method, dossiers, procedures, and process for approval of prices for power system operation dispatch services and electricity market transaction administration services as promulgated by the Minister of Industry and Trade.

Article 9. Method for calculating the total cost of sector operation and management and the regulated profit

The total cost of sector operation and management includes management costs related to electricity production and business operations of Vietnam Electricity. The total cost of sector operation and management and the regulated profit in year N (C_chung) shall be determined according to the following formula:

C_chung = C_VL + C _TL + C_KH + C_SCL + C_MN + C_BTK + C_TC + GT + LN

In which:

a) C_VL: Total material cost in year N (VND), determined based on the audited financial statements, grounded in the results of inspection or the published electricity production and business costs of year N-2, excluding abnormal and extraordinary costs of year N-2, adjusted for annual inflation based on the average CPI of the three most recent years preceding the time of formulating the average electricity retail price, and including reasonable anticipated costs expected to arise in year N but not yet calculated or not fully calculated for year N-2;

b) C_TL: Total labor cost in year N (VND), including total wage cost and wage-related expenses such as health insurance, social insurance, unemployment insurance, and trade union fees, determined in accordance with relevant legal regulations.

c) C_KH: Total depreciation cost of fixed assets in year N (VND), determined in accordance with regulations on the regime for management, use, and depreciation of fixed assets issued by the Ministry of Finance or by a competent agency or organization;

d) C_SCL: Total major repair cost in year N (VND), determined based on the major repair plan for year N approved by a competent agency or organization;

dd) C_MN: Total cost of outsourced services in year N (VND), determined based on the audited financial statements, grounded in the results of inspection or the published electricity production and business costs of year N-2, excluding abnormal and extraordinary costs of year N-2, adjusted for annual inflation based on the average CPI of the three most recent years preceding the time of formulating the average electricity retail price, and including reasonable anticipated costs expected to arise in year N but not yet calculated or not fully calculated for year N-2;

e) C_BTK: Total other cash costs in year N (VND), including taxes, charges, fees, land rentals, shift meal allowances, and other anticipated cash expenses in year N. Taxes, charges, fees, land rentals, shift meal allowances, and other anticipated cash expenses in year N shall be determined in accordance with current regulations. Other cash costs in year N (VND), determined based on the audited financial statements, grounded in the results of inspection or the published electricity production and business costs of year N-2, excluding abnormal and extraordinary costs of year N-2, adjusted for annual inflation based on the average CPI of the three most recent years preceding the time of formulating the price, and including reasonable anticipated costs expected to arise in year N but not yet calculated or not fully calculated for year N-2;

g) C_TC: Total financial cost in year N (VND), including total interest expenses, bond-related costs, finance lease expenses, and loan arrangement fees payable in year N, determined based on contracts and legally valid documents, and projected loans serving production activities in year N; the projected foreign exchange differences for year N as determined in accordance with financial accounting regulations;

h) GT: Discounts on the cost price (VND);

i) The regulated profit shall be determined in accordance with Clause 5, Article 4 of Decree No. 72/2025/ND-CP.

k) In cases where the data has been audited by an independent auditing firm for year N-1, the figures for material costs, outsourced service costs, and other cash costs from year N-1 shall be used to calculate the corresponding costs for year N.

Section 2

METHOD FOR CALCULATING THE AVERAGE ELECTRICITY RETAIL PRICE FOR THE YEAR

Article 10. Method for calculating the average electricity retail price for the year

1. The average electricity retail price for the year shall be calculated in accordance with the formula prescribed in Clause 2, Article 4 of Decree No. 72/2025/ND-CP.

2. The parameters retained according to the annual average electricity retail price plan include: the total cost of purchasing electricity transmission services, power system dispatch and electricity market transaction administration services; the total cost of electricity distribution and retailing and regulated profit; the total sector operation and management cost and regulated profit.

3. The total generation cost and the total cost of power plants providing ancillary services to the power system, updated on a quarterly basis, shall be determined in accordance with Articles 11 and 12 of this Circular.

4. The dossier on the electricity price plan within the year shall comply with Clause 2, Article 6 of Decree No. 72/2025/ND-CP.

Article 11. Method for determining the total cost of electricity generation

1. Electricity output shall be determined based on the national power system operation method for April of year N for the price plan updated in the first quarter, for July of year N for the price plan updated in the second quarter, and for October of year N for the price plan updated in the third quarter, or based on the updated electricity supply and national power system operation plan for year N.

2. Electricity prices and input parameters on fuels and exchange rates shall be determined based on the parameters used by the power system and electricity market operator in the development of national power system operation method or updated electricity supply and national power system operation plan for year N. For power plants planned to be commissioned in year N for which electricity prices have not yet been determined, Vietnam Electricity shall be responsible for proposing estimated prices to calculate the electricity purchase costs for the remaining months of year N.

3. The total cost of electricity generation updated quarterly in year N shall be determined according to the formula prescribed in Clause 1, Article 4 of this Circular.

4. The electricity purchase cost from power plants, which is quarterly updated, in year N, including power plants directly and indirectly participating in the electricity market (excluding strategic multi-purpose hydropower plants and other dependent-accounting power plants during the period of not yet participating in the competitive electricity market of Vietnam Electricity), BOT power plants, small-scale renewable energy power plants, power plants using renewable and new energy sources including electricity storage systems, and importing electricity shall be determined based on the power purchase agreements, electricity purchase costs for the initial months of the year, and estimated electricity purchase costs for the remaining months of the year, in which:

a) Electricity purchase costs for the initial months of year N: shall be determined based on the actual incurred electricity purchase cost payment dossiers, with estimates made for any costs for which payment dossiers are unavailable or incomplete at the time of formulating the price plan;

b) Estimated electricity purchase costs for the remaining months of year N shall be determined on the basis of:

b1) The projected electricity output for the final months of the year as prescribed in Clause 1 of this Article;

b2) Electricity output of power plants using renewable and new energy sources for the final months of the year, as provided by power system and electricity market operators;

b3) The contractual output (Qc) of power plants directly participating in the electricity market, as published by the power system and electricity market operator at the time of calculating the electricity supply and national power system operation plan for year N, with Qc updated for each power plant up to the time of calculating the national power system operation plan in accordance with Clause 1 of this Article;

b4) The average monthly electricity market energy price, as calculated by the power system and electricity market operator, based on the results of the system and market operation planning calculations for April of year N for the updated electricity retail price plan in the first quarter, for July of year N for the updated electricity retail price plan in the second quarter, and for October of year N for the updated electricity retail price plan in the third quarter, or based on the updated electricity supply and national power system operation plan for year N;

b5) The average monthly electricity market capacity price under the approved electricity market operation plan for year N;

b6) Electricity prices and input parameters of power plants directly and indirectly participating in the electricity market, BOT power plants, power plants using renewable and new energy sources, and importing electricity, determined in accordance with Clause 2 of this Article;

b7) Electricity purchase cost from small-scale renewable energy power plants applying the avoided cost tariff, as determined based on the avoided cost tariff for year N (if the avoided cost tariff for year N is not available, the avoided cost tariff for year N-1 shall apply), and the structure of peak, normal, and off-peak electricity output for the remaining months of year N in each region according to the corresponding monthly electricity output structure by region implemented in year N-1.

c) Electricity purchase cost for the remaining months of year N of power plants directly participating in the electricity market shall be calculated and provided by the power system and electricity market operator.

5. Total costs from strategic multi-purpose hydropower plants and other dependent-accounting power plants in the period of not yet participating in the competitive electricity market of Vietnam Electricity, updated quarterly in year N: shall be updated based on taxes, charges, and payments that vary according to electricity output, and fuel costs. The quarterly updated electricity output used for calculating taxes, charges, payments, and fuel costs shall be the electricity output as prescribed in Clause 1 of this Article. The profit shall follow the annual average electricity retail price plan.

Article 12. Method for determining the total cost of power plants providing ancillary services to the power system

1. The total cost of power plants and generating sets providing ancillary services to the power system, updated quarterly in year N, shall be determined on the principle that the cost for the initial months of year N is calculated in accordance with Clause 2 of this Article, and the estimated cost for the remaining months of year N is calculated in accordance with Clause 3 of this Article.

2. Electricity purchase costs for the initial months of Year N already implemented: shall be determined based on the electricity purchase payment dossiers for power plants with available payment dossiers, and estimated data for power plants without such dossiers. For power plants and generating sets under Vietnam Electricity that have entered into power purchase agreements with Power Corporations and provide ancillary services to the power system, fuel costs and variable operation and maintenance costs shall be calculated based on actual incurred data.

3. The estimated electricity purchase costs for the remaining months of year N for power plants and generating sets providing ancillary services to the power system shall be determined on the basis of:

a) The projected electricity output for the remaining months of year N, determined in accordance with Clause 1, Article 11 of this Circular;

b) Electricity prices and input parameters on fuels and exchange rates for the remaining months of year N, determined in accordance with Clause 2, Article 11 of this Circular.

Chapter III

IMPLEMENTATION ORGANIZATION

Article 13. Responsibility of the Electricity Authority of Vietnam

Assume the prime responsibility for, and coordinate with relevant agencies in, reporting to the Minister of Industry and Trade on the inspection, review, and supervision of the average electricity retail price plan developed and adjusted by Vietnam Electricity in accordance with Decree No. 72/2025/ND-CP.

Article 14. Responsibility of Vietnam Electricity

Vietnam Electricity shall be responsible for implementing the provisions of Decree No. 72/2025/ND-CP and this Circular.

Article 15. Responsibility of power system and electricity market operators

Power system and electricity market operators shall be responsible for calculating and providing data to Vietnam Electricity in accordance with Articles 4, 5, 8, and 11 of this Circular.

Article 16. Effect

1. This Circular takes effect from the date of its signing for promulgation.

2. The Minister of Industry and Trade’s Circular No. 09/2024/TT-BCT dated July 30, 2024, on calculating the average electricity price, is hereby annulled./.