Decree 18/2025/ND-CP providing guidance on the Law on Electricity related to electricity trading activities and ensuring power supply situations in Vietnam
Decree 18/2025/ND-CP providing guidance on the Law on Electricity related to electricity trading activities and ensuring power supply situations in Vietnam
On February 08, 2025, the Government of Vietnam issued Decree 18/2025/ND-CP detailing certain provisions of the Electricity Law, including:
- Clause 6, Article 44 on the measures to ensure the quality of electricity of the electricity buyer in power purchase agreements for non-residential purposes; conditions for concluding power purchase agreements for residential purposes.
- Clause 7, Article 48 on recording electricity meter readings.
- Clause 5, Article 53 on urgent situations seriously threatening the ability to ensure electricity supply.
Decree 18/2025/ND-CP applies to agencies, organizations, and individuals performing electricity activities, using electricity in Vietnam.
Decree 18/2025/ND-CP takes effect from February 08, 2025.
Decree 18/2025/ND-CP providing guidance on the Law on Electricity related to electricity trading activities and ensuring power supply situations in Vietnam (Image from the Internet)
What are the conditions for concluding a power purchase agreement for residential purposes in Vietnam?
According to Article 6 Decree 18/2025/ND-CP, an organization or individual requesting to conclude a power purchase agreement for residential purposes must ensure the following conditions:
- The party requesting to conclude the agreement as the electricity buyer must be the legal representative or authorized person of the electricity buyer to conclude the contract.
- The party requesting to conclude the agreement as the electricity seller must be the legal representative or authorized person of the retail electricity unit that meets the electricity buyer's needs to conclude the contract.
- The contracting parties must satisfy the conditions of a valid civil transaction under the Civil Code. In the case of persons lacking civil capacity, the legal representative of such persons participates in proposing the contract conclusion.
- If the electricity buyer includes multiple households using electricity jointly under one contract, the person concluding the contract for the electricity buyer is the representative of the joint households signing the contract and holding written authorization from other shared households. The contract must clearly state the number of shared households (with an attached list) and the applicable electricity selling price as per electricity law. Authorization is executed according to civil law.
- If the electricity buyer is a tenant using the premises for housing, the person concluding the contract as the electricity buyer is the homeowner or the tenant authorized in writing. The homeowner must commit to paying electricity bills if the tenant, as the authorized contract signatory, fails to fulfill the payment obligation.
- At one registered location for electricity purchase, the electricity buyer, if a household, may only enter into one contract.
What are the main contents of a power purchase agreement for residential purposes in Vietnam?
Pursuant to Article 44 of the Electricity Law 2024 on the power purchase agreement and electricity service provision agreement:
Article 44. Power Purchase Agreement and Electricity Service Provision Agreement
- The power purchase agreement and electricity service provision agreement must be in paper form or data messages with the same validity as documents under the law.
- The power purchase agreement between the electricity generation unit and the buyer, excluding power plants funded under public-private partnership, wholesale electricity contracts, and auxiliary system service provision contracts, must include the following main contents:
a) Information of the parties in the contract including: name, address, phone number, and other contact methods (if any);
b) Price of power purchase agreement; electricity wholesale price; electricity system auxiliary service price;
c) Contracted electricity output (if any);
d) Invoicing, electricity payment, and payment deadline;
dd) Rights and obligations of the parties;
e) Language used is Vietnamese. If the electricity seller includes foreign investors, the electricity seller and buyer may agree to use an additional contract in English.
g) Other agreed contents by both parties.
- The power purchase agreement for residential purposes must contain the following main contents:
a) Information of the parties in the contract including: name, address, phone number, and other contact methods (if any);
b) Standards, quality of service, and electricity usage address;
[...]
The power purchase agreement for residential purposes includes the following main contents:
- Information of the parties in the contract including: name, address, phone number, and other contact methods (if any)
- Service standards, quality, and electricity usage address
- Retail electricity price, payment method, and deadline
- Rights and obligations of the parties
- Responsibility for protecting the information of the electricity buyer
- Termination conditions and liabilities arising from termination
- Force majeure circumstances as per civil law
- Dispute resolution method
- Time of contract conclusion, contract duration
- Agreement on violation penalties
- Other contents mutually agreed upon by the parties
