On March 26, the Prime Minister issued Decision No. 05/2024/QD-TTg regulating the mechanism for adjusting the average retail electricity price from May 15, 2024.
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Specially, in Decision No. 05/2024/QD-TTg regulating the mechanism for adjusting the average retail electricity price as follows:
(1) Annual adjustment mechanism for adjusting the average retail electricity price
Based on the plan for power supply and operation of the power system in year N, the results of checking the costs of electricity production and business in year N-2, estimated results of electricity production and business in year N-1, before January 25, year N, Vietnam Electricity (EVN) calculates the average electricity selling price, according to the formula and implement requirements on documents specified in each situation:
- Price decreases by 1% or more: EVN is responsible for reducing the average electricity selling price by a corresponding level and preparing documents to report to the Ministry of Industry and Trade to preside and coordinate with relevant ministries and agencies for inspection and supervision within 5 working days from the date of adjustment;
- Price increases from 3% to less than 5%: EVN decides to adjust the average electricity selling price to a corresponding level and prepares documents to report to the Ministry of Industry and Trade to preside and coordinate with relevant ministries and agencies for inspection and supervision within 5 working days from the date of making adjustments;
- Price increases from 5% to less than 10%: EVN is allowed to adjust the average electricity selling price to a corresponding increase after reporting and approved by the Ministry of Industry and Trade. The Ministry of Industry and Tradeis responsible for responding in writing within 15 working days from the receipt of complete price plan dossier. Within 5 working days from the actual date, EVN is responsible for reporting to the Ministry of Industry and Trade;
- Price needs to be adjusted to increase by 10% or affects the macroeconomic situation: Based on the electricity price plan dossier, the Ministry of Industry and Trade presides over inspection, review and sends comments to the Ministry of Finance and relevant ministries and agencies, then relevant ministries and agencies to synthesize and report to the Prime Minister for consideration and comments. In case of necessity, the Ministry of Industry and Trade coordinates with relevant ministries and agencies to report to the Price Management Steering Committee before reporting to the Prime Minister.
(2) Adjustment mechanism for adjusting the average retail electricity price during the year
Following Decision No. 05/2024/QD-TTg, before the 25th day of the first month of the 2nd, 3rd and 4th quarters, EVN determines the actual commercial electricity output of the previous quarter and the total cumulative commercial electricity output from the beginning of the year, estimating the commercial electricity output of the year's remaining months; determine the electricity generation cost of the immediately preceding quarter, the cumulative electricity generation cost from the beginning of the year and estimate the electricity generation cost for the remaining months according to basic input parameters in the electricity generation stage and update other costs not included in the electricity price to recalculate the average electricity selling price according to the formula with other parameters remain unchanged and comply with document requirements:
- Price is lower 1% or lower: EVN is responsible for reducing the average electricity selling price at a corresponding level and preparing documents to report to the Ministry of Industry and Trade to preside and coordinate with relevant ministries and agencies for inspection and supervision within 5 working days from the date of adjustment;
- Price needs to be higher than 3% to less than 5%: EVN decides to adjust the average electricity selling price to increase the corresponding level prepares documents to report to the Ministry of Industry and Trade to preside and coordinate with relevant ministries and agencies for inspection and supervision within 5 working days from the date of making adjustments;
- Price higher from 5% to less than 10%: EVN is allowed to adjust to increasing the average electricity selling price at the corresponding level after reporting and being approved by the Ministry of Industry and Trade. The Ministry of Industry and Trade is responsible for responding in writing within 15 working days from the receipt of the complete price plan dossier. Within 5 working days from the date of adjustment, EVN is responsible for reporting to the Ministry of Industry and Trade;
- Price higher 10% more or affects the macroeconomic situation, based on Electricity price plan documents, the Ministry of Industry and Trade presides over inspection, review and sends for comments to the Ministry of Finance and relevant ministries and agencies, then synthesizes and reports to the Prime Minister for consideration and comments. In case of necessity, the Ministry of Industry and Trade coordinates with other agencies Relevant ministries and agencies to report to the Price Management Steering Committee before reporting to the Prime Minister.
Therefore, Decision No. 05/2024/QD-TTg regulates the annual adjustment mechanism for adjusting the average retail electricity price and the average retail electricity price during the year.
Reference to Decision No. 05/2024/QD-TTg takes effect from May 15, 2024.
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