Decree No. 72/2025/NĐ-CP on the mechanism and time for adjusting the average retail electricity price

DECREE

Regulations on the mechanism and time for adjusting the average retail electricity price

^{_______________}

Pursuant to the Law on the 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 promulgates this Decree stipulating the mechanism and time for adjusting the average retail electricity price.

PART I
GENERAL PROVISIONS

Article 1. Scope of Regulation and Applicability

Article 1. This Decree provides detailed regulations on 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 stipulates the mechanism and time for adjusting the average retail electricity price;

b) Point c, Clause 2, Article 52 stipulates that the retail electricity price should be reflected and adjusted promptly according to actual changes in input parameters, covering reasonable costs, with reasonable profit to preserve and develop business capital in line with economic and social conditions at each period and level of the competitive electricity market.

Article 2. Scope of Application

This Decree applies to agencies, organizations, and individuals participating in electricity activities and using electricity.

Article 3. Explanation of Terms

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

1. Purchaser of electricity is the Vietnam Electricity Corporation and its affiliated Electricity Corporations.

2. Seller of electricity is the power generation unit, organization, or individual implementing the power purchase and sale contract signed with the Purchaser of electricity.

3. Average retail electricity price is the price determined based on the principle of calculating total production and business costs for electricity and the average profit for 01 kWh of commercial electricity in each period.

4. Current average retail electricity price is the average retail electricity price currently in effect at the time of considering an adjustment to the electricity price.

5. Price range of the average retail electricity price (hereinafter referred to as the price range) is the scope between the minimum retail electricity price and the maximum retail electricity price.N ||| 6. Year is the year in which the average retail electricity price is established in accordance with this Decree.

7. Basic input parameters in the power generation stage are factors directly affecting power generation costs that the electricity corporation cannot control, including fuel prices, foreign exchange rates, power generation volume structure, and electricity purchase costs on the electricity market, where electricity purchase costs on the electricity market refer to payments made to power generation units participating in the electricity market in accordance with the market operation rules issued by the Ministry of Industry and Trade.

Chapter II
MECHANISM AND TIME FOR ADJUSTING THE AVERAGE RETAIL ELECTRICITY PRICE

Section 1
MECHANISM FOR ADJUSTING THE AVERAGE RETAIL ELECTRICITY PRICE

Article 3. Principles for Adjusting the Average Retail Electricity Price

1. Annually, after the Vietnam Electricity Corporation publicly announces the production and business costs for electricity in year, excluding abnormal one-off costs in year, the average retail electricity price for year N ||| will be reviewed and adjusted based on the objective fluctuations of input parameters in all stages (power generation, transmission, distribution-retail, system operation dispatching and trading management, ancillary services system operation and management, industry management).

2. During the year, the average retail electricity price will be reviewed and adjusted based on updated power generation costs, electricity purchase costs from power plants providing ancillary services according to basic input parameters in the power generation stage, and other costs not included in the electricity price.

3. When the average retail electricity price decreases by 1% or more compared to the current average retail electricity price, the electricity price may be adjusted downward accordingly.

4. When the average retail electricity price increases by 2% or more compared to the current average retail electricity price, the electricity price may be adjusted upward.

5. The average retail electricity price shall be calculated in accordance with Article 4 of this Decree. If the calculated average retail electricity price falls outside the price range, it can only be considered for adjustment within the price range prescribed by the Prime Minister. The Vietnam Electricity Corporation may adjust the average retail electricity price up or down within the price range in accordance with the mechanisms stipulated in Articles 5 and 6 of this Decree.

In cases where the average retail electricity price needs to be adjusted higher than the current average retail electricity price by 10% or more, the Ministry of Industry and Trade shall take the lead, coordinate with relevant ministries and agencies to review and report to the Government for consideration and comments. 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 retail electricity price must be conducted openly and transparently.

Article 4. Method for Establishing the Average Retail Electricity Price

1. The average retail electricity price is established based on costs of the power generation stage, costs of purchasing transmission services, distribution-retail electricity services, system operation and dispatch services, system ancillary service costs, industry management and operation costs, other costs allocated, and only includes costs directly serving the production and supply of electricity by the Vietnam Electricity Corporation to ensure operational capacity, supply of electricity, and meet investment needs according to approved plans, including costs of each stage taking into account cost reductions as prescribed.

2. The average retail electricity price for the yearN ||| (G_BQVL

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}: Total cost of the power generation stage for the year N ||| (VND), determined according to the following formula:

                        CPĐ_= C + CNLTT_{+ C}(VND) from direct and indirect power plants participating in the electricity market;_BOT(VND) from direct and indirect power plants participating in the electricity market;_TTN(VND) from direct and indirect power plants participating in the electricity market;_NLTT(VND) from direct and indirect power plants participating in the electricity market;_{(VND) from strategic multi-purpose hydropower plants and dependent accounting power plants not yet participating in the competitive electricity market of the Vietnam Electricity Corporation, where total costs are determined according to regulations issued by the Ministry of Industry and Trade;}ĐMT_{a) C}

Where:

C_{+ C}b) C N ||| : Total cost of purchasing electricity for the year

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

C_TTN(VND) from small renewable energy power plants; N ||| (VND) from power plants using renewable and new energy, including storage systems;

C_NLTTb) C N ||| (VND) from imported electricity;

C_NK(VND) from small renewable energy power plants; N ||| : Total cost of power plants providing system ancillary services for the year

C_{a) C}b) C N ||| (VND), including trial run costs of power plants;

c) C_DVPT: Total cost of purchasing transmission services for the year N ||| (VND);

(VND) from small renewable energy power plants, as specified in Clause 2 of this Article;_No.: Total cost of distribution-retail electricity and regulated profit margin for the year N ||| including costs of mobilizing customer-owned backup power sources to supplement national grid supply in emergency situations threatening serious disruption of power supply;

(VND) from power plants using renewable and new energy including storage systems, as specified in Clause 2 of this Article;_PP-BL: Total cost of industry management and regulated profit margin for the year N ||| (VND), : Total cost of purchasing system operation and dispatch services and electricity trading market management services for the year

(VND) from imported electricity, as specified in Clause 2 of this Article._{) are determined according to the following formula:}: Other costs not included in the electricity price, which are allowable costs not yet included in the electricity price, including revaluation exchange rate differences not allocated, exchange rate differences not recorded and paid to power plants under power purchase agreements, calculated and allocated into the average retail electricity price for the year N ||| including costs of mobilizing customer-owned backup power sources to supplement national grid supply in emergency situations threatening serious disruption of power supply;

a) Power plant production volume: as stipulated in Article 3 of this Circular;_{) is the total allowable dispatching and operation revenue for the System Operation Unit and the electricity market in year}h) A N ||| including costs of mobilizing customer-owned backup power sources to supplement national grid supply in emergency situations threatening serious disruption of power supply;

(VND), including: total interest costs, bond costs, lease costs, and other fees for borrowing that must be paid in year_khac: Estimated electricity sales volume for the year N ||| including costs of mobilizing customer-owned backup power sources to supplement national grid supply in emergency situations threatening serious disruption of power supply;

(kWh)._TP3. Costs of purchasing electricity from the electricity seller shall be carried out in accordance with the rules of electricity market operations at each level issued by the Ministry of Industry and Trade and the Power Purchase Agreement signed between the electricity seller and the electricity buyer. N ||| 4. Costs of purchasing transmission services, costs of purchasing distribution-retail electricity services, costs of purchasing system operation and dispatch services, costs of power plants providing system ancillary services, industry management and operation costs are determined based on costs plus regulated profit margins of the transmission, distribution-retail electricity, system operation and dispatch, and industry management and operation stages of the Vietnam Electricity Corporation according to levels of the electricity market as prescribed by the Ministry of Industry and Trade. Cost reductions are determined based on data from audited financial reports.

5. The regulated profit margin for the year

in calculating the average retail electricity price (VND) of the distribution-retail electricity stage; industry management and operation; strategic multi-purpose hydropower plants and dependent accounting power plants not yet participating in the competitive electricity market of the Vietnam Electricity Corporation is determined according to the following formula:

CSHN ||| N

Where:

^V: Shareholders' equity (VND) of the distribution-retail electricity stage; industry management and operation; strategic multi-purpose hydropower plants and dependent accounting power plants not yet participating in the competitive electricity market of the Vietnam Electricity Corporation used for electricity production and business at the end of December (or June 30 if there is no December 31 data) of the year_ROE : Return on equity (%) not lower than the average interbank lending rate for six months published on the State Bank of Vietnam's website for the yearN-1;

TNDN_{N |||}: Corporate income tax rate in calculating the average retail electricity price (%) applied at the rate prescribed in Clause 1, Article 10 of the Law on Corporate Income Tax, which is 20%, and updated if there is a change in the corporate income tax rate provision., excluding abnormal one-off costs in year;

^T||| Corporate Income Tax Rate_{N |||} : The corporate income tax rate applied in calculating the average retail electricity price (%) is set at 20%, as stipulated in Clause 1, Article 10 of the Law on Corporate Income Tax, and will be updated if there are changes to the corporate income tax rate regulations.

Article 5. Adjustment of the annual average retail electricity price

1. Based on the annual power supply plan and system operation plan issued by the Ministry of Industry and Trade, the production and business costs of Vietnam Electricity for the year, and the estimated results of production and business activities for the year (in cases where the production and business costs for the year have not yet been announced), N ||| before January 25 of that year, Vietnam Electricity shall calculate the annual average retail electricity price according to the formula prescribed in Clause 2, Article 4 of this Decree, fulfill the requirements regarding documentation as stipulated in Clause 2 of this Article, and proceed as follows: , excluding abnormal one-off costs in year a) In the case where the calculated annual average retail electricity price decreases by 1% or more compared to the current annual average retail electricity price, Vietnam Electricity shall be responsible for reducing the annual average retail electricity price accordingly. Within five working days from the date of adjustment implementation, Vietnam Electricity shall be responsible for preparing a report for the Ministry of Industry and Trade to review and monitor; N-1 b) In the case where the annual average retail electricity price needs to be adjusted upwards by 2% to less than 5% compared to the current annual average retail electricity price, Vietnam Electricity shall prepare a pricing plan report for the annual average retail electricity price to be submitted to the Ministry of Industry and Trade for review and comments. Within fifteen working days from the date of receipt of the annual average retail electricity pricing plan report from Vietnam Electricity, the Ministry of Industry and Trade shall provide comments in writing. Vietnam Electricity shall decide to increase the annual average retail electricity price after receiving comments from the Ministry of Industry and Trade. Within five working days from the date of adjustment implementation, Vietnam Electricity shall be responsible for reporting to the Ministry of Industry and Trade for monitoring; N-1c) In the case where the annual average retail electricity price needs to be adjusted upwards by 5% to less than 10% compared to the current annual average retail electricity price, Vietnam Electricity may adjust the annual average retail electricity price accordingly after reporting and obtaining approval from the Ministry of Industry and Trade. Within fifteen working days from the date of receipt of the annual average retail electricity pricing plan report from Vietnam Electricity, the Ministry of Industry and Trade shall respond in writing to allow Vietnam Electricity to implement. Within five working days from the date of adjustment implementation, Vietnam Electricity shall be responsible for reporting to the Ministry of Industry and Trade for monitoring; N ||| d) In the case where the annual average retail electricity price needs to be adjusted upwards by 10% or more compared to the current annual average retail electricity price, based on the pricing plan report submitted by Vietnam Electricity, the Ministry of Industry and Trade shall take the lead in reviewing and seeking opinions from relevant ministries and agencies. Based on the feedback from relevant ministries and agencies, the Ministry of Industry and Trade shall compile and report to the Government for consideration and comments. 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 retail electricity pricing plan documentation of Vietnam Electricity includes:

a) A letter reporting on the annual average retail electricity pricing plan of Vietnam Electricity, including an analysis and evaluation of the situation of production and business costs at each stage;

b) Contents accompanying the letter reporting on the annual average retail electricity pricing plan of Vietnam Electricity include: principles for calculating costs at each stage (generation, transmission, distribution-retail, system operation and market transaction management, industry management), including the principle of forecasting input parameters such as foreign exchange rates, domestic fuel prices, imported fuel prices, and prices of power plants expected to be put into operation in the calculation year but without power purchase contracts; a summary table of cost calculation results at each stage; a detailed data table of cost calculation at each stage; documents and texts used as the basis and foundation for cost calculation; explanations of cost standards and unit prices used in the forecasted cost calculation for each stage (if applicable); explanations of production and business costs not included in the retail electricity price but allocated to the production and business cost structure and the remaining balance expected to be allocated to the annual average retail electricity price;

a report evaluating the impact of electricity price adjustments on the cost of purchasing electricity for electricity consumers.

2. The documentation for the annual average retail electricity pricing plan of the Vietnam Electricity Corporation includes:

a) A report letter regarding the annual average retail electricity pricing plan of the Vietnam Electricity Corporation, which includes analyses and assessments of production and business costs at each stage;

b) The accompanying contents of the report letter on the annual average retail electricity pricing plan of the Vietnam Electricity Corporation include: principles for calculating costs at each stage (generation, transmission, distribution-retail, system operation dispatching and power market management, industry management and regulation), including anticipated input parameters such as foreign exchange rates, domestic fuel prices, imported fuel prices, and projected power plant operating costs without power purchase contracts for the calculation year; a summary table of calculated costs at each stage; a detailed data table for cost calculations at each stage; relevant documents and texts used as bases and grounds for calculations; explanations of cost norms and unit prices used in the forecasted cost calculations for each stage (if applicable); explanations of production and business costs not included in the retail electricity price but allocated to the production and business cost structure and the remaining balance expected to be allocated to the average retail electricity price for the year N ||| ; a report assessing the impact of electricity price adjustments on customers' electricity purchasing costs. N |||of the generation stage (if applicable); explanations of production and business costs not included in the retail electricity price but allocated to the production and business cost structure and the remaining balance expected to be allocated to the average retail electricity price for the year

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

1. Before the 25th day of the first month of the second, third, and fourth quarters, Vietnam Electricity shall determine the actual volume of commercial electricity sold in the previous quarter and the cumulative volume of commercial electricity sold from the beginning of the year; estimate the remaining monthly volume of commercial electricity to be sold during the year; determine the generation cost of the immediately preceding quarter, the cumulative generation cost from the beginning of the year (including costs of purchasing electricity from power plants providing ancillary services), estimated generation costs for the remaining months of the year based on basic input parameters in the generation phase, update other costs not yet included in the average retail electricity price to recalculate the average retail electricity price according to the formula prescribed in Clause 2, Article 4 of this Decree (other parameters remain unchanged), comply with the requirements for documentation as stipulated in Clause 2 of this Article, and proceed as follows:

a) In case, after updating the calculation, the recalculated average retail electricity price is lower than the current average retail electricity price by 1% or more, Vietnam Electricity shall be responsible for reducing the average retail electricity price accordingly. Within five working days from the date of adjustment, Vietnam Electricity shall be responsible for preparing a report to submit to the Ministry of Industry and Trade for inspection and supervision.

b) In case, after updating the calculation, the recalculated average retail electricity price needs to be increased by 2% to less than 5% compared to the current average retail electricity price, Vietnam Electricity shall prepare a proposal for the average retail electricity price and report it to the Ministry of Industry and Trade for review and comments. Within fifteen working days from the date of receipt of the complete proposal for the average retail electricity price from Vietnam Electricity, the Ministry of Industry and Trade shall provide comments in writing. Vietnam Electricity shall decide to increase the average retail electricity price after receiving comments from the Ministry of Industry and Trade. Within five working days from the date of adjustment, Vietnam Electricity shall be responsible for reporting to the Ministry of Industry and Trade for supervision.

c) In case, after updating the calculation, the recalculated average retail electricity price needs to be increased by 5% to less than 10% compared to the current average retail electricity price, Vietnam Electricity may increase the average retail electricity price accordingly after reporting and obtaining approval from the Ministry of Industry and Trade. Within fifteen working days from the date of receipt of the complete proposal for the average retail electricity price from Vietnam Electricity, the Ministry of Industry and Trade shall respond in writing to allow Vietnam Electricity to implement. Within five working days from the date of adjustment, Vietnam Electricity shall be responsible for reporting to the Ministry of Industry and Trade for supervision.

d) In case, after updating the calculation, the recalculated average retail electricity price needs to be increased by 10% or more compared to the current average retail electricity price, based on the proposal for the average retail electricity price submitted by Vietnam Electricity, the Ministry of Industry and Trade shall lead the review and seek opinions from relevant ministries and agencies. Based on the feedback from relevant ministries and agencies, the Ministry of Industry and Trade shall compile and report to the Government for consideration and comments. 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 proposal for the average retail electricity price for the year by Vietnam Electricity includes:

a) A letter reporting the proposal for the average retail electricity price for the year by Vietnam Electricity, including an analysis and evaluation of the implementation of generation costs in the immediately preceding quarter.

b) Contents accompanying the letter reporting the proposal for the average retail electricity price by Vietnam Electricity include: principles for updating generation costs, including principles for estimating input parameters such as foreign exchange rates, domestic fuel prices, and imported fuel prices, and prices of power plants expected to be put into operation in the calculation year but without power purchase contracts; a summary table of calculation results and detailed data tables for calculating generation costs; documents and texts used as bases and grounds for calculation; explanations of cost standards and unit prices used in the updated cost estimation for the calculation year (if applicable); explanations of production and business costs not included in the retail electricity price but allocated to the production and business cost structure and the remaining balance expected to be allocated to the average retail electricity price for the year. N ||| of the power generation stage (if any); explain the production and business costs of electricity not included in the retail electricity price but allocated to the cost of production and business of electricity, and the remaining balance expected to be allocated to the average retail electricity price for the year N |||of the generation stage (if applicable); explanations of production and business costs not included in the retail electricity price but allocated to the production and business cost structure and the remaining balance expected to be allocated to the average retail electricity price for the year

Article 7. Inspection and Adjustment of Average Retail Electricity Price

1. In cases where the Vietnam Electricity Group decides to adjust the average retail electricity price according to the provisions at point a, Clause 1, Article 5 and point a, Clause 1, Article 6 of this Decree, or in cases where the Vietnam Electricity Group submits to the Ministry of Industry and Trade the dossier on the electricity pricing plan according to the provisions at point d, Clause 1, Article 5 and point d, Clause 1, Article 6 of this Decree, the Ministry of Industry and Trade shall take the lead and coordinate with relevant ministries and agencies to examine and inspect the reports and calculations of the Vietnam Electricity Group.

2. In cases where the average retail electricity price needs to be reduced but the Vietnam Electricity Group does not reduce it, the Ministry of Industry and Trade shall have the responsibility to request the Vietnam Electricity Group to reduce the average retail electricity price. The Vietnam Electricity Group shall have the responsibility to implement the request of the Ministry of Industry and Trade within five working days from the date of receipt of the request.

3. If any errors are found in the calculation results of the electricity price according to the provisions at point a, Clause 1, Article 5 and point a, Clause 1, Article 6 of this Decree, the Ministry of Industry and Trade shall have the responsibility to request the Vietnam Electricity Group to stop adjusting or adjust again the average retail electricity price. The Vietnam Electricity Group shall have the responsibility to implement the request of the Ministry of Industry and Trade within five working days from the date of receipt of the request.

Section 2
TIME FOR ADJUSTING THE AVERAGE RETAIL ELECTRICITY PRICE

Article 8. Time for Adjusting the Average Retail Electricity Price

The minimum time for adjusting the average retail electricity price is three months from the last adjustment of the electricity price.

Chapter III
IMPLEMENTING PROVISIONS

Article 9. Implementation Organization

1. The Ministry of Industry and Trade shall have the responsibility:

a) To guide the Vietnam Electricity Group to calculate the average retail electricity price according to the provisions of Article 4 of this Decree;

b) To lead the inspection according to the provisions of Article 7 of this Decree.

2. Relevant ministries and agencies shall have

a) The Ministry of Finance shall cooperate with the Ministry of Industry and Trade to implement this Decree in its capacity as the state management agency for prices;

b) Relevant ministries and agencies shall provide comments and cooperate on related contents within their assigned management functions and tasks and as prescribed by law.

3. The Vietnam Electricity Group shall have the responsibility:

a) To implement the calculation of the average retail electricity price according to the provisions of Articles 4, 5, and 6 of this Decree and submit one set of dossier reporting the plan for the average retail electricity price to the Ministry of Industry and Trade;

b) To implement the adjustment of the average retail electricity price and submit reports for inspection and supervision by competent authorities according to the provisions of Articles 5 and 6 of this Decree.

Article 10. Effective Date

This Decree takes effect from the date of issuance.