Circular No. 22/2025/TT-BCT on the calculation of average retail electricity prices

CIRCULAR

Regulations on Calculating the Average Retail Electricity Price

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Pursuant to the Electricity Law dated November 30, 2024;

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

Pursuant to Decree No. 72/2025/NĐ-CP dated March 28, 2025 of the Government stipulating the mechanism and time for adjusting the average retail electricity price;

At the proposal of the Director of the Electricity Administration;

The Minister of Industry and Trade issues this Circular regulating the calculation of the average retail electricity price.

PART I

GENERAL PROVISIONS

Article 1. Scope and Applicability

1. This Circular guides the calculation of the average retail electricity price as prescribed in Article 4 of Decree No. 72/2025/NĐ-CP dated March 28, 2025 of the Government stipulating the mechanism and time for adjusting the average retail electricity price (hereinafter referred to as Decree No. 72/2025/NĐ-CP).

2. This Circular applies to the Vietnam Electricity Corporation, member units of the Vietnam Electricity Corporation, and related organizations and individuals.

Article 2. Interpretation of Terms

In this Circular, the following terms shall be understood as follows:

1. CPI is the Consumer Price Index published by the central statistical agency.

2. System Operator and Market Operator is the entity performing the functions of the National Power Dispatch Center and the Market Operation Center as provided for in the Electricity Law (currently the State-owned Joint Stock Company for System Operation and Market Operation - NSMO).

3. Market-based electricity price is the price level determined for each unit of electricity for each trading cycle, applied to calculate the electricity payment amount in the electricity market.

4. Market-based capacity price is the calculated price level for each trading cycle, applied to calculate the capacity payment amount for power generation units in the electricity market.

5. Average retail electricity price is the retail electricity price level determined based on the principle of calculating total production and business costs and the average profit rate for each kilowatt-hour of commercial electricity in each period.

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

7. Year N-1 is the Gregorian calendar year immediately preceding Year N |||.

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

9. BOT Power Plant is a power plant invested in under the Build-Operate-Transfer model through a contract between the investor and the competent state authority.

10. Total Commercial Electricity Output is the total electricity output of the Vietnam Electricity Corporation and the Electricity Corporations sold to customers.

11. Electricity Corporation refers collectively to the Northern Electricity Corporation, Southern Electricity Corporation, Central Electricity Corporation, Hanoi City Electricity Corporation, and Ho Chi Minh City Electricity Corporation.

Chapter II

METHOD FOR ESTABLISHING THE AVERAGE RETAIL ELECTRICITY PRICE

Section 1

ANNUAL METHOD FOR ESTABLISHING THE AVERAGE RETAIL ELECTRICITY PRICE

Article 3. Method for Establishing the Annual Average Retail Electricity Price

1. The average retail electricity price for Year N is calculated according to the formula prescribed in Clause 2 of Article 4 of Decree No. 72/2025/NĐ-CP.

2. The cost of power generation, system ancillary service costs, transmission service purchase costs, distribution-retail service purchase costs, system operation dispatching costs, and electricity market transaction management costs, as well as industry management and operation costs, are determined successively in accordance with the provisions of Articles 4, 5, 6, 7, 8, and 9 of this Circular.

3. The power plant output for Year N ||| is determined according to the power supply plan and national power system operation plan for Year N |||.

4. The projected total commercial electricity output for Year N ||| is calculated by the Vietnam Electricity Corporation corresponding to the power supply plan and national power system operation plan for Year N |||.

5. The dossier for the annual average retail electricity price proposal is implemented in accordance with Clause 2 of Article 5 of Decree No. 72/2025/NĐ-CP.

Article 4. Method for calculating total generation cost

1. Total generation cost for the year (CPĐ) shall be determined according to the following formula: N ||| PĐ

C_{= C}TTĐ_{+ C} ĐMT_BOT ĐMT_TTN ĐMT_NLTT ĐMT_NK ĐMT_{a) C}

Where:

: Total cost of electricity purchase for the year (VND) from direct and indirect power plants participating in the electricity market, as specified in Clause 2 of this Article;_{+ C}b) C N ||| : Total cost and fixed profit for the year (VND) from strategic multi-purpose hydropower plants and other dependent accounting power plants during the period not participating in competitive electricity markets of Vietnam Electricity Corporation, as specified in Clause 3 of this Article;

c) C_BOT(VND) from BOT power plants, as specified in Clause 2 of this Article; N ||| d) C

(VND) from small renewable energy power plants, as specified in Clause 2 of this Article;_TTNb) C N ||| đ) C

(VND) from power plants using renewable and new energy including storage systems, as specified in Clause 2 of this Article;_NLTTb) C N ||| e) C

(VND) from imported electricity, as specified in Clause 2 of this Article._NKb) C N ||| 2. The total cost of purchasing electricity from direct and indirect power plants participating in the electricity market (excluding strategic multi-purpose hydropower plants and other dependent accounting power plants during the period not participating in competitive electricity markets of Vietnam Electricity Corporation), BOT power plants, small renewable energy power plants, power plants using renewable and new energy including storage systems, and imported electricity shall be determined based on power purchase contracts and electricity market regulations, wherein:

a) Power plant production volume: as stipulated in Article 3 of this Circular;_{a) C}b) C N ||| b) Production volume of renewable and new energy power plants provided by the System Operation Unit and the Electricity Market;

c) Contracted volume (Qc) of direct participating power plants provided by the System Operation Unit and the Electricity Market;

d) Average monthly electricity price in the market calculated based on the simulation results of the electricity market operation plan of the System Operation Unit and the Electricity Market;

đ) Average monthly capacity price in the market approved based on the simulation results of the electricity market operation plan of the System Operation Unit and the Electricity Market;

e) Electricity prices and input parameters such as fuel costs and foreign exchange rates of direct and indirect participating power plants, BOT power plants, power plants using renewable and new energy, and imported electricity: determined based on the electricity prices used in the calculation of the national power supply plan and system operation for the year

. For power plants expected to be put into operation in the year N |||;

but whose electricity prices have not yet been determined, Vietnam Electricity Corporation shall be responsible for proposing estimated prices to estimate the costs for the year N |||;

g) Cost of purchasing electricity from small renewable energy power plants applying avoidable cost tariff: determined according to the avoidable cost tariff for the year N |||(in case there is no avoidable cost tariff for the year N ||| then apply the avoidable cost tariff for the year N |||;

) and the peak, normal, and off-peak electricity production structure by month for each region in year N according to the ratio of the actual electricity production structure by month for each region in year N ||| h) Cost of purchasing electricity from direct participating power plants calculated and provided by the System Operation Unit and the Electricity Market. N ||| 3. Method for determining total cost and fixed profit for the year N-1from strategic multi-purpose hydropower plants and other dependent accounting power plants during the period not participating in competitive electricity markets of Vietnam Electricity Corporation as follows: N-1;

a) Total cost from strategic multi-purpose hydropower plants and other dependent accounting power plants during the period not participating in competitive electricity markets of Vietnam Electricity Corporation shall be determined according to the method prescribed by the Minister of Industry and Trade for determining generation costs for power plants in the period not participating in competitive electricity markets for certain types of power plants;

b) Fixed profit shall be determined according to Clause 5, Article 4 of Decree No. 72/2025/NĐ-CP. N ||| for strategic multi-purpose hydropower plants and dependent accounting power plants that have not yet joined the competitive electricity market of Vietnam Electricity Corporation as follows:

a) The total costs from strategic multi-purpose hydropower plants and other dependent accounting power plants during the period before joining the competitive electricity market of Vietnam Electricity Corporation shall be determined according to the regulations of the Minister of Industry and Trade on the method for determining the generation cost of power plants during the period before joining the competitive electricity market for certain types of power plants;

b) The prescribed profit margin shall be determined according to Clause 5, Article 4 of Decree No. 72/2025/NĐ-CP.

Article 5. Method for calculating total costs of power plants providing system ancillary services

1. The total costs of power plants providing system ancillary services in year N |||include the testing costs of power plants determined according to contracts for providing system ancillary services, including:

a) Electricity output is determined according to the provisions of Article 3 of this Circular;

b) Electricity prices and input parameters such as fuel costs, foreign exchange rates are determined according to the parameters used by the System Operation Unit and the electricity market in planning electricity supply and national power system operation in year N |||.

2. In cases where power plants under the Vietnam Electricity Corporation have signed power purchase contracts with Electricity Joint Stock Corporations and participate in providing system ancillary services, these power plants will be calculated for fuel costs, operational and maintenance costs during their participation in providing system ancillary services.

Article 6. Method for calculating total costs of purchasing transmission service

The total costs of purchasing transmission service in year N ||| (C_No.) is the total allowable transmission revenue determined according to the regulations on the method, documentation, procedures, and approval process for transmission service prices issued by the Minister of Industry and Trade.

Article 7. Method for calculating total distribution-retail costs and regulated profit

1. The total distribution-retail costs in year N ||| of Electricity Joint Stock Corporations is determined according to the regulations on the method and procedures for approving the framework price for wholesale electricity sales; the method for determining wholesale electricity prices; and the main contents of power purchase contracts issued by the Minister of Industry and Trade. N ||| 2. Regulated profit is determined according to Clause 5, Article 4 of Decree No. 72/2025/NĐ-CP.

Article 8. Method for calculating total costs of purchasing system dispatching and operation services and market operation services

The total costs of purchasing system dispatching and operation services and market operation services in year

ĐĐ N ||| (C_{) is the total allowable dispatching and operation revenue for the System Operation Unit and the electricity market in year}determined according to the regulations on the method, documentation, procedures, and approval process for dispatching and operation service prices issued by the Minister of Industry and Trade. N ||| Article 9. Method for calculating total management costs and regulated profit

Total management costs include management costs related to the production and business activities of the Vietnam Electricity Corporation. Total management costs and regulated profit in year

chung N ||| (C_{) are determined according to the following formula:}VL

C_{) are determined according to the following formula:} TTĐ_KH ĐMT_TL ĐMT_SCL ĐMT_MN ĐMT_BTK ĐMT_{+ GT + LN} ĐMT_{Economic life of the power plant as specified in the Appendix attached to this Circular (years).} : Total material costs in year

Where:

: Total cost of electricity purchase for the year (VND) from direct and indirect power plants participating in the electricity market, as specified in Clause 2 of this Article;_KH(VND), determined based on audited financial reports based on the results of inspection or announced production and business costs in year N ||| N-2 , excluding abnormal one-off costs in year, adjusted annually based on the average CPI of the three years immediately preceding the time of building the average retail electricity price and supplemented with reasonable costs expected to occur in year N but not yet included or fully included in year , excluding abnormal one-off costs in year: Total labor costs in year , excluding abnormal one-off costs in year;

c) C_TL(VND), including total labor costs and other costs with wage-like nature such as health insurance, social insurance, unemployment insurance, and trade union fees, determined according to relevant laws; N ||| : Total depreciation costs of fixed assets in year

(VND) from small renewable energy power plants, as specified in Clause 2 of this Article;_SCL(VND), determined according to the regulations on the management, use, and depreciation of fixed assets by the Ministry of Finance or authorized agencies; N ||| : Total major repair costs in year

(VND) from power plants using renewable and new energy including storage systems, as specified in Clause 2 of this Article;_MN(VND), determined based on the approved annual major repair plan by authorized agencies; N ||| : Total external service costs in year N ||| , adjusted annually based on the average CPI of the three years immediately preceding the time of building the average retail electricity price and supplemented with reasonable costs expected to occur in year N but not yet included or fully included in year

(VND) from imported electricity, as specified in Clause 2 of this Article._BTK: Other cash costs in year N ||| N-2 , excluding abnormal one-off costs in year, adjusted annually based on the average CPI of the three years immediately preceding the time of building the average retail electricity price and supplemented with reasonable costs expected to occur in year N but not yet included or fully included in year , excluding abnormal one-off costs in year(VND), including: taxes, fees, land rental payments, meal allowances, and other cash costs expected in year , excluding abnormal one-off costs in year;

a) Power plant production volume: as stipulated in Article 3 of this Circular;_{+ GT + LN}. Taxes, fees, land rental payments, and meal allowances expected in year N ||| are determined according to current regulations. Other cash costs in year N |||are determined based on audited financial reports based on the results of inspection or announced production and business costs in year N ||| , adjusted annually based on the average CPI of the three years immediately preceding the time of building the price and supplemented with reasonable costs expected to occur in year N ||| but not yet included or fully included in year , excluding abnormal one-off costs in year, adjusted annually based on the average CPI of the three years immediately preceding the time of building the average retail electricity price and supplemented with reasonable costs expected to occur in year N but not yet included or fully included in year , excluding abnormal one-off costs in yearg) C N ||| : Total financial costs in year , excluding abnormal one-off costs in year;

(VND), including: total interest costs, bond costs, lease costs, and other fees for borrowing that must be paid in year_{Economic life of the power plant as specified in the Appendix attached to this Circular (years).}, determined according to contracts and legally binding documents, and expected borrowing costs for production activities in year N ||| ; exchange rate differences expected in year N |||are determined according to financial accounting regulations; N |||h) GT: Reductions from cost of goods sold (VND); N ||| i) Regulated profit is determined according to Clause 5, Article 4 of Decree No. 72/2025/NĐ-CP.

k) If there are audit data from an independent auditor in year

, use the data on material costs, external service costs, and other cash costs in year

to calculate the corresponding costs in year N-1METHOD FOR CALCULATING THE AVERAGE RETAIL ELECTRICITY PRICE IN THE YEAR N-1 to calculate the corresponding cost for the year N |||.

Section 2

METHOD FOR DETERMINING THE AVERAGE RETAIL ELECTRICITY PRICE FOR THE YEAR

Article 10. Method for Establishing the Average Retail Electricity Price for the Year

1. The average retail electricity price for the year is calculated according to the formula prescribed in Clause 2, Article 4 of Decree No. 72/2025/NĐ-CP.

2. The parameters that remain unchanged under the annual average retail electricity pricing scheme include: total costs for purchasing transmission services, system dispatching, and power market operation management; total distribution-retail costs and regulated profit; and total operational-management costs and regulated profit.

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

4. The documentation for the annual average retail electricity pricing scheme shall be carried out in accordance with Clause 2, Article 6 of Decree No. 72/2025/NĐ-CP.

Article 11. Method for Determining Total Generation Costs

1. The electricity output is determined based on the national power system operation mode in April of the year N ||| for the first quarter price update, July of the year N ||| for the second quarter price update, and October of the year N ||| for the third quarter price update or the annual power supply plan and national power system operation plan N ||| updated.

2. The electricity price and input parameters such as fuel prices and foreign exchange rates are determined based on the parameters used by the System Operator and Power Market in establishing the national power system operation mode or the annual power supply plan and national power system operation plan N ||| updated. For power plants expected to be put into operation during the year N ||| but whose electricity price has not yet been determined, Vietnam Electricity Corporation shall be responsible for proposing a forecasted price to estimate the cost of purchasing electricity for the remaining months of the year N |||.

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

4. The cost of purchasing electricity from power plants updated quarterly for the year N |||, including direct and indirect participants in the power market (excluding strategic multi-purpose hydropower plants and dependent accounting units not participating in the competitive power market of Vietnam Electricity Corporation), BOT power plants, small renewable energy power plants, power plants using renewable and new energy including battery storage systems and imported electricity, is determined based on power purchase agreements, actual electricity purchase costs for the initial months of the year, and projected electricity purchase costs for the remaining months of the year, wherein:

a) The cost of purchasing electricity for the initial months of the year N |||: determined based on the payment documentation for actual incurred electricity purchase costs, estimated for expenses without or incomplete payment documentation at the time of building the pricing scheme;

b) The projected cost of purchasing electricity for the remaining months of the year N ||| is determined based on:

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

b2) The electricity output of renewable and new energy power plants for the final months of the year provided by the System Operator and Power Market;

b3) The contractual electricity output (Qc) of directly participating power plants announced by the System Operator and Power Market at the time of calculating the annual power supply plan and national power system operation mode N |||, updated Qc of power plants to the time of calculating the national power system operation mode according to Clause 1 of this Article;

b4) The average monthly market electricity price calculated by the System Operator and Power Market based on the results of the system and market planning calculation for April of the year N ||| for the first quarter retail electricity price update, July of the year N ||| for the second quarter retail electricity price update, and October of the year N ||| for the third quarter retail electricity price update or the annual power supply plan and national power system operation plan N ||| updated;

b5) The average monthly market capacity price according to the approved annual market operation plan N ||| ;

b6) The electricity price and input parameters of directly and indirectly participating power plants, BOT power plants, renewable and new energy power plants, and imported electricity: determined according to Clause 2 of this Article;

b7) The cost of purchasing electricity from small renewable energy power plants applying the avoided cost tariff: determined according to the avoided cost tariff for the year N ||| h) Cost of purchasing electricity from direct participating power plants calculated and provided by the System Operation Unit and the Electricity Market. N ||| 3. Method for determining total cost and fixed profit for the year N-1and the peak, normal, and off-peak electricity output structure of each region for the remaining months of the year N ||| according to the corresponding monthly electricity output structure ratio of each region implemented in the year N-1.

c) The cost of purchasing electricity for the remaining months of the year N ||| of directly participating power plants is calculated and provided by the System Operator and Power Market.

5. The total cost from strategic multi-purpose hydropower plants and dependent accounting units not participating in the competitive power market of Vietnam Electricity Corporation, updated quarterly for the year N |||: updated according to taxes, fees, and variable payments based on electricity output and fuel costs. The quarterly updated electricity output used for calculating taxes, fees, variable payments, and fuel costs is the electricity output as stipulated in Clause 1 of this Article. Profit according to the annual average retail electricity pricing scheme.

Article 12. Method for Determining Total Costs of Power Plants Providing System Ancillary Services

1. The total costs of power plants and generating units providing system ancillary services shall be updated quarterly each year according to the principle of costs of the first months of the year as stipulated in Clause 2 of this Article, and the estimated costs of the remaining months of the year as stipulated in Clause 3 of this Article. N ||| is determined based on the principle of costs of the initial months of the year N ||| according to the provisions of Clause 2 of this Article, the estimated costs for the remaining months of the year N ||| according to the provisions of Clause 3 of this Article.

2. Electricity purchase costs of the first months of the year that have been implemented shall be determined based on the payment cost documentation for power plants with such documentation, and estimated figures for power plants without documentation. For power plants and generating units under the Vietnam Electricity Corporation that have signed electricity purchase and sale contracts with Electricity Joint Stock Corporations and participate in providing system ancillary services, fuel costs, operation and maintenance costs shall be calculated based on actual occurrences. N ||| already implemented: shall be determined based on the payment documentation for electricity purchase costs for power plants with payment documentation and estimated figures for power plants without payment documentation. For power plants and generating units directly under Vietnam Electricity Corporation that have signed power purchase contracts with Power Corporations and participate in providing system ancillary services, fuel costs, operation and maintenance costs are calculated based on actual incurred expenses.

3. Estimated electricity purchase costs of power plants and generating units providing system ancillary services for the remaining months of the year shall include: N ||| is determined based on:

a) The estimated production volume for the remaining months of the year shall be determined in accordance with Clause 1 of Article 11 of this Circular; N ||| b) The electricity price and input parameters regarding fuel, foreign exchange rates for the remaining months of the year shall be determined in accordance with Clause 2 of Article 11 of this Circular.

b) Electricity prices and input parameters regarding fuel, foreign exchange rates for the remaining months of the year N ||| Article 13. Responsibilities of the Electricity Regulatory Authority

Chapter III

IMPLEMENTATION

To take the lead and coordinate with relevant agencies to report to the Minister of Industry and Trade on the inspection, review, and supervision of the average retail electricity price plan established and adjusted by the Vietnam Electricity Corporation in accordance with Decree No. 72/2025/NĐ-CP.

Shall take the lead and coordinate with relevant agencies to report to the Minister of Industry and Trade on the inspection, review, and supervision of the average retail electricity price plan established and adjusted by Vietnam Electricity Corporation according to the provisions of Decree No. 72/2025/NĐ-CP.

Article 14. Responsibilities of the Vietnam Electricity Corporation

The Vietnam Electricity Corporation is responsible for implementing the provisions of Decree No. 72/2025/NĐ-CP and the provisions of this Circular.

Article 15. Responsibilities of System Operation Units and Electricity Market Operators

Article 15. Responsibilities of the System Operator and Electricity Market

Article 16. Effective Date

1. This Circular takes effect from the date of issuance.

The System Operator and Electricity Market are responsible for calculating and providing data to the Vietnam Electricity Corporation in accordance with Articles 4, 5, 8, and 11 of this Circular.