Decree 72/2025/ND-CP on the mechanism and time frame for adjusting the average electricity retail price

DECREE

Providing regulations on the mechanism and time frame for adjusting the average electricity retail price

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Pursuant to the Law on Organization of the Government dated February 18, 2025;

Pursuant to the Electricity Law dated November 30, 2024;

At the proposal of the Minister of Industry and Trade;

The Government hereby promulgates the Decree providing regulations on the mechanism and time frame for adjusting the average electricity retail price.

Chapter I
GENERAL PROVISIONS

Article 1. Scope of regulation and subjects of application

1. This Decree details Point a, Clause 3, Article 50 and Point c, Clause 2, Article 52 of the Electricity Law, including:

a) Point a, Clause 3, Article 50 on the mechanism and timing for adjusting the average electricity retail price;

b) Point c, Clause 2, Article 52 on the electricity retail price reflected and adjusted in accordance with actual fluctuations of input parameters, compensating for reasonable and valid costs with reasonable profits to preserve and develop business capital of enterprises in line with the socio-economic conditions of each period and the level of the competitive electricity market.

2. This Decree applies to agencies, organizations, and individuals participating in electricity-related activities and electricity consumption.

Article 2. Interpretation of terms

In this Decree, the terms below are construed as follows:

1. Electricity buyer means Vietnam Electricity (EVN) and the Power Corporations under Vietnam Electricity.

2. Electricity seller means an electricity producer, organization, or individual that enters into a power purchase agreement with the electricity buyer.

3. 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 product in each period.

4. Current average electricity retail price means the average electricity retail price applied at the time of reviewing the electricity price adjustment.

5. Price bracket of the average electricity retail price (hereinafter referred to as the price bracket) means the range between the minimum and maximum electricity retail prices.

6. Year N refers to the year in which the average electricity retail price is formulated under the provisions of this Decree.

7. Basic input parameters in electricity generation refer to factors that directly affect electricity generation costs and are beyond the control of electricity entities, including fuel prices, exchange rates, generation output structure, and electricity purchase costs in the electricity market, in which electricity purchase costs in the electricity market are payments made to electricity producers participating in the electricity market under the electricity market operation regulations issued by the Ministry of Industry and Trade.

Chapter II

MECHANISM AND TIMING FOR ADJUSTING THE AVERAGE ELECTRICITY RETAIL PRICE

Section 1

MECHANISM FOR ADJUSTING THE AVERAGE ELECTRICITY RETAIL PRICE

Article 3. Principles for adjusting the average electricity retail price

1. Annually, after Vietnam Electricity publicly announces the production and business costs of year N-2, the average electricity retail price of year N shall be reviewed and adjusted based on the objective fluctuations of input parameters across all stages (electricity generation, electricity transmission, electricity distribution and retail, power system operation dispatch and electricity market transaction administration, ancillary services, and electricity sector administration and management) and the allocation of other costs not yet included in the electricity price.

2. Within a year, the average electricity retail price shall be considered for adjustment based on updates on electricity generation costs, electricity purchase costs from power plants providing ancillary services according to the basic input parameters in electricity generation, and other costs not yet included in the electricity price.

3. In case the average electricity retail price decreases by 1% or more compared to the applicable average electricity retail price, the electricity price shall be decreased accordingly.

4. In case the average electricity retail price increases by 2% or more compared to the applicable average electricity retail price, the electricity price shall be increased accordingly.

5. The average electricity retail price shall be calculated in accordance with Article 4 of this Decree. If the calculated average electricity retail price falls outside the price bracket, adjustments shall only be made within the price bracket prescribed by the Prime Minister. Vietnam Electricity shall be entitled to increase or decrease the average electricity retail price within the price bracket under the mechanism prescribed in Articles 5 and 6 of this Decree.

In case the average electricity retail price needs to be increased by 10% or more compared to the applicable average electricity retail price, the Ministry of Industry and Trade shall assume the prime responsibility for, and coordinate with relevant ministries and agencies in, inspecting, reviewing, and reporting to the Government for consideration and opinions. 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 Government.

6. The adjustment of the average electricity retail price must be carried out in a public and transparent manner.

Article 4. Method for determining the average electricity retail price

1. The average electricity retail price shall be determined based on the costs of electricity generation, costs of purchasing transmission, distribution and retail services, costs of system operation dispatch and electricity market transaction administration, costs of ancillary services for the power system, costs of sector administration and management, and other allocated costs, and shall include only costs directly serving the production and supply of electricity by Vietnam Electricity to ensure electricity production and supply, and to meet the investment needs in accordance with the approved plan, in which the costs of each stage shall take into account cost reduction items as prescribed.

2. The average electricity retail price for year N (G_BQ) shall be determined according to the following formula:

In which:

a) C_PĐ: Total electricity generation costs for year N (VND), determined as follows:

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

In which:

C_TTĐ: Total electricity purchase costs for year N (VND) from power plants directly and indirectly participating in the electricity market;

C_ĐMT: Total costs and regulated profits for year N (VND) from strategic multipurpose hydropower plants and other dependent-accounting power plants in the stage of not yet participating in the competitive electricity market of Vietnam Electricity, with total costs determined in accordance with the regulations issued by the Ministry of Industry and Trade;

C_BOT: Total electricity purchase costs for year N (VND) from BOT power plants;

C_TTN: Total electricity purchase costs for year N (VND) from small-scale renewable energy power plants;

C_NLTT: Total electricity purchase costs for year N (VND) from power plants utilizing renewable and new energy, including energy storage systems;

C_NK: Total electricity purchase costs for year N (VND) from electricity import;

b) C_DVPT: Total costs of power plants providing ancillary services for the power system in year N (VND), including test-run costs of power plants;

c) C_TT: Total electricity transmission service purchase costs for year N (VND);

d) C_PP-BL: Total electricity distribution and retail costs and regulated profits for year N (VND), including costs of mobilizing
backup power generation sources from electricity consumers to supplement the national power system in emergency situations that pose a serious threat to power supply security;

dd) C_chung: Total costs of sector administration and management, including regulated profits for year N (VND);

e) C_ĐĐ: Total costs of purchasing system operation dispatch services and electricity market transaction administration services for year N (VND);

g) C_khac: Total other costs not yet included in the electricity price, comprising costs permitted but not yet included in the electricity price, including re-valuated foreign exchange differences that have not yet been allocated, and unrecognized foreign exchange differences pending settlement for power plants under power purchase agreements, which shall be allocated into the average electricity retail price for year N (VND);

h) A_TP: Total commercial electricity output expected for year N (kWh).

3. The cost of purchasing electricity from the electricity seller shall be implemented in accordance with the regulations on electricity market operation at each level as promulgated by the Ministry of Industry and Trade and based on the power purchase agreement signed between the electricity seller and the electricity buyer.

4. The costs of purchasing electricity transmission services, electricity distribution and retail services, power system operation dispatch and electricity market transaction administration services, costs of power plants providing ancillary services to the power system, and sector administration and management costs shall be determined based on the cost-plus-regulated-profit mechanism for the electricity transmission, electricity distribution and retail, power system operation dispatch and electricity market transaction administration, power plants providing ancillary services to the power system, and sector administration and management of Vietnam Electricity, in accordance with regulations issued by the Ministry of Industry and Trade for each electricity market level. Cost reductions shall be determined based on data from audited financial statements.

5. The regulated profit for year N (LN_N) in the calculation of the average retail electricity price (VND) for the electricity distribution and retail, sector administration and management, strategic multi-purpose hydropower plants, and other dependent-accounting power plants that have not yet participated in the competitive electricity market of Vietnam Electricity, shall be determined according to the following formula:

In which:

V_CSHN : Equity (VND) of the electricity distribution and retail, sector administration and management, strategic multi-purpose hydropower plants, and other dependent-accounting power plants that have not yet participated in the competitive electricity market of Vietnam Electricity used for electricity production and business as of December 31 (or June 30 if data for December 31 is not available) of year N-1;

ROE_N : Return on equity ratio (%) after tax, not lower than the average six-month interbank interest rate published on the e-portal of the State Bank of Vietnam for year N-2;

T_TNDNN : Enterprise income tax rate (%) used in the calculation of the average electricity retail price, applied at the rate of 10% as prescribed in Clause 1, Article 10 of the Law on Enterprise Income Tax, and updated if there is any change in the enterprise income tax rate regulation.

Article 5. Annual adjustment of average electricity retail price

1. Based on the electricity supply and power system operation plan for year N issued by the Ministry of Industry and Trade, the electricity production and business costs of Vietnam Electricity for year N-2, and the estimated electricity production and business results for year N-1 (in case the costs for year N-1 have not yet been announced), before January 25 of year N, Vietnam Electricity shall calculate the average electricity retail price according to the formula specified in Clause 2, Article 4 of this Decree, comply with the dossier requirements prescribed in Clause 2 of this Article, and proceed as follows:

a) In case the calculated average electricity retail price decreases by 1% or more compared to the current average electricity retail price, Vietnam Electricity shall be responsible for reducing the average electricity retail price accordingly. Within 5 working days from the date of adjustment, Vietnam Electricity shall prepare and submit a report to the Ministry of Industry and Trade for inspection and supervision;

b) In case the adjustment of the average electricity retail price requires an increase from 2% to less than 5% compared to the current average electricity retail price, Vietnam Electricity shall prepare a dossier on the average electricity retail price plan and report it to the Ministry of Industry and Trade for review and comments. Within 15 working days from the date of receipt of the complete dossier on the average electricity retail price plan from Vietnam Electricity, the Ministry of Industry and Trade shall provide its written comments. Vietnam Electricity shall decide on the adjustment of the average electricity retail price after obtaining the Ministry of Industry and Trade's comments. Within 5 working days from the date of adjustment, Vietnam Electricity shall report to the Ministry of Industry and Trade for supervision;

c) In case the adjustment of the average electricity retail price requires an increase from 5% to less than 10% compared to the current average electricity retail price, Vietnam Electricity shall be permitted to increase the average electricity retail price accordingly after reporting and obtaining approval from the Ministry of Industry and Trade. Within 15 working days from the date of receipt of the complete dossier on the average electricity retail price plan from Vietnam Electricity, the Ministry of Industry and Trade shall provide a written response for Vietnam Electricity to implement. Within 5 working days from the date of adjustment, Vietnam Electricity shall report to the Ministry of Industry and Trade for supervision;

d) In case the adjustment of the average electricity retail price requires an increase of 10% or more compared to the current average electricity retail price, based on the dossier on electricity price plan submitted by Vietnam Electricity, the Ministry of Industry and Trade shall assume the prime responsibility for inspecting, reviewing, and seeking opinions from relevant ministries and agencies. Based on the opinions of relevant ministries and agencies, the Ministry of Industry and Trade shall consolidate and report to the Government for consideration and decision. 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 Government.

2. The annual average electricity retail price plan dossier of Vietnam Electricity shall include:

a) An official report on the annual average electricity retail price plan of Vietnam Electricity, which includes analysis and evaluation of electricity production and business costs in each stage;

b) Accompanying documents to the official report on the annual average electricity retail price plan of Vietnam Electricity, which include: Principles for calculating costs in each stage (electricity generation, electricity transmission, electricity distribution and retail, power system operation dispatch, electricity market transaction administration, and sector administration and management), including estimated input parameters such as exchange rates, domestic and imported fuel prices, and costs for power plants expected to be put into operation in the calculation year but without a power purchase agreement; a summary table of cost calculation results for each stage; a detailed table of cost calculation data for each stage; documents and references used as the basis for cost calculations; explanations of cost norms: costs and unit prices used in the estimated cost calculations for year N in each stage (if any); explanation of electricity production and business costs that have not been included in the electricity retail price but have been allocated to electricity production and business costs, with the remaining balance expected to be allocated to the average electricity retail price for year N; an impact assessment report on the effect of electricity price adjustments on the electricity purchasing costs of electricity consumers.

Article 6. Adjustment of average electricity retail price within the year

1. Before the 25^th day of the first month of Quarter II, Quarter III, and Quarter IV, Vietnam Electricity shall determine the actual commercial electricity output of the previous quarter and the cumulative commercial electricity output from the beginning of the year, estimate the commercial electricity output for the remaining months of the year; determine the electricity generation costs of the preceding quarter, cumulative electricity generation costs from the beginning of the year (including electricity purchase costs from plants providing ancillary services), estimate the electricity generation costs for the remaining months of the year based on basic input parameters in electricity generation, and update other costs not yet included in the average electricity retail price to recalculate the average electricity retail price according to the formula specified in Clause 2, Article 4 of this Decree (other parameters remain unchanged), comply with the dossier requirements prescribed in Clause 2 of this Article, and proceed as follows:

a) In case, after recalculating, the computed average electricity retail price is lower by 1% or more compared to the current average electricity retail price, Vietnam Electricity shall be responsible for decreasing the average electricity retail price accordingly. Within 5 working days from the date of adjustment, Vietnam Electricity shall prepare and submit a report to the Ministry of Industry and Trade for inspection and supervision;

b) In case, after recalculating, the computed average electricity retail price needs to be increased by 2% to less than 5% compared to the current average electricity retail price, Vietnam Electricity shall prepare a dossier on the average electricity retail price plan and report it to the Ministry of Industry and Trade for review and comments. Within 15 working days from the date of receipt of the complete dossier on the average electricity retail price plan from Vietnam Electricity, the Ministry of Industry and Trade shall provide its written comments. Vietnam Electricity shall decide on the adjustment of the average electricity retail price after obtaining the Ministry of Industry and Trade's comments. Within 5 working days from the date of adjustment, Vietnam Electricity shall report to the Ministry of Industry and Trade for supervision;

c) In case, after recalculating, the computed average electricity retail price needs to be increased by 5% to less than 10% compared to the current average electricity retail price, Vietnam Electricity is allowed to increase the average electricity retail price accordingly after reporting and obtaining approval from the Ministry of Industry and Trade. Within 15 working days from the date of receipt of the complete dossier on the average electricity retail price plan from Vietnam Electricity, the Ministry of Industry and Trade shall provide a written response for Vietnam Electricity to implement. Within 5 working days from the date of adjustment, Vietnam Electricity shall report to the Ministry of Industry and Trade for supervision;

d) In case, after calculating and updating, the average electricity retail price requires an increase of 10% or more compared to the current average electricity retail price, based on the dossier on electricity price plan submitted by Vietnam Electricity, the Ministry of Industry and Trade shall assume the prime responsibility for inspecting, reviewing, and seeking opinions from relevant ministries and agencies. Based on the opinions of relevant ministries and agencies, the Ministry of Industry and Trade shall consolidate and report to the Government for consideration and decision. 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 Government.

2. The average electricity retail price plan dossier within the year of Vietnam Electricity shall include:

a) An official report on the average electricity retail price plan within the year of Vietnam Electricity, which includes analysis and evaluation of the implementation of electricity production costs for the preceding quarter;

b) Accompanying documents to the official report on the average electricity retail price plan of Vietnam Electricity, which include: Principles for updating electricity generation cost calculations, including projected input parameters such as exchange rates, domestic and imported fuel prices, costs for power plants expected to be put into operation during the calculation year but without a power purchase agreement; summary and detailed tables of electricity generation cost calculations; documents and references used as the basis for calculations; explanation of cost norms and unit prices used for the projected cost updates for year N of the electricity generation stage (if any); explanation of electricity production and business costs not included in the electricity retail price but allocated to electricity production and business costs, with the remaining balance expected to be allocated to the average electricity retail price for year N; impact assessment report on the effect of electricity price adjustments on the electricity purchasing costs of electricity consumers.

Article 7. Inspection of average electricity retail price adjustment

1. If Vietnam Electricity decides to adjust the average electricity retail price under the provisions of Point a, Clause 1, Article 5 and Point a, Clause 1, Article 6 of this Decree or if Vietnam Electricity submits an electricity price plan dossier under the provisions of Point d, Clause 1, Article 5 and Point d, Clause 1, Article 6 of this Decree, the Ministry of Industry and Trade shall assume the prime responsibility for, and coordinate with relevant ministries and agencies in, reviewing and inspecting Vietnam Electricity’s reports and calculations.

2. If the average electricity retail price needs to be reduced but Vietnam Electricity does not make the adjustment, the Ministry of Industry and Trade shall require Vietnam Electricity to reduce the average electricity retail price.

Vietnam Electricity shall comply with the Ministry of Industry and Trade’s request within 5 working days from the date of receiving the request.

3. If errors are found in the electricity price calculation results under the provisions of Point a, Clause 1, Article 5 and Point a, Clause 1, Article 6 of this Decree, the Ministry of Industry and Trade shall require Vietnam Electricity to suspend the adjustment or re-adjust the average electricity retail price accordingly. Vietnam Electricity shall comply with the Ministry of Industry and Trade’s request within 5 working days from the date of receiving the request.

Section 2

TIME FRAME FOR ADJUSTING THE AVERAGE ELECTRICITY RETAIL PRICE

Article 8. Time frame for adjusting the average electricity retail price

The minimum time interval between adjustments of the average electricity retail price shall be 3 months from the most recent adjustment.

Chapter III
IMPLEMENTATION PROVISIONS

Article 9. Implementation organization

1. The Ministry of Industry and Trade shall:

a) Guide Vietnam Electricity to calculate the average electricity retail price in accordance with Article 4 of this Decree;

b) Preside the inspection according to Article 7 of this Decree.

2. Relevant ministries and agencies shall:

a) The Ministry of Finance shall coordinate with the Ministry of Industry and Trade in implementing this Decree as a state management agency in charge of price;

b) Relevant ministries and agencies shall provide opinions and coordinate for concerned matters within the management scope according to the assigned functions and tasks and law provisions.

3. The Vietnam Electricity shall:

a) Calculate the average electricity retail price in accordance with Articles 4, 5 and 6 of this Decree, and submit one set of dossier reporting the average electricity retail price plan to the Ministry of Industry and Trade;

b) Adjust the average electricity retail price, and send reports to the competent agencies for inspection and supervision in accordance with Articles 5 and 6 of this Decree.

Article 10. Effect

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