Mechanism for adjustment of average electricity price annually and in the year in Vietnam

Mechanism for adjustment of annual average electricity price in Vietnam

Mechanism for adjustment of annual average electricity price shall comply with the provisions of Article 5 of Decision 24/2017/QD-TTg, specifically as follows:

- Based on the annual plan for power supply and electricity system operation promulgated by the Ministry of Industry and Trade and the inspection of electricity production costs in the previous year as prescribed in Article 7 herein, and estimated electricity sale in the current year, EVN shall calculate the average electricity price according to the formula mentioned in Clause 2 Article 4 of Decision 24/2017/QD-TTg.

- In case there in a decrease in the average electricity price in comparison with the current average electricity price and in the prescribed bracket of electricity price, EVN is responsible for reducing the average electricity price to the corresponding level and reporting to the Ministry of Industry and Trade and the Ministry of Finance for inspection.

- If the average electricity price needs to rise from 3% to below 5% in comparison with the current average electricity price and is in the prescribed bracket of electricity price, EVN shall make decision on increase of the average electricity price to the corresponding level. EVN shall prepare and send reports on increase of electricity price to the Ministry of Industry and Trade and the Ministry of Finance for inspection.

- If the average electricity price needs to rise from 5% to below 10% in comparison with the current average electricity price and is in the prescribed bracket of electricity price, EVN is allowed to rise the average electricity price to the corresponding level after submitting report and obtaining approval thereof from the Ministry of Industry and Trade. Within a period of 15 working days as from the receipt of reports, the Ministry of Industry and Trade shall give a written response thereof to EVN. After raising the electricity price, EVN must send reports thereof to the Ministry of Industry and Trade and the Ministry of Finance.

- If the average electricity price needs to rise 10% or above in comparison with the current average electricity price or is out of prescribed bracket of electricity price or may influence on the macroeconomic status after rising, the Ministry of Industry and Trade shall take charge and cooperate with the Ministry of Finance in examining, reviewing and submitting reports thereof to the Prime Minister for consideration according to EVN’s plan for electricity price. The Ministry of Industry and Trade may cooperate with the Ministry of Finance to submit reports the Price Administration Steering Committee before submitting reports to the Prime Minister, where necessary.

Mechanism for adjustment of average electricity price annually and in the year in Vietnam (Internet image)

Mechanism for adjustment of average electricity price in the year in Vietnam

Mechanism for adjustment of average electricity price in the year in Vietnamshall comply with the provisions of Article 6 of Decision 24/2017/QD-TTg, specifically as follows:

- Before 25th of the first month of Quarter II, Quarter II and Quarter IV, upon the consideration of basic input parameters in the phase of electricity generation in the previous quarter, EVN shall determine the cost of electricity generation in the previous quarter, the cost of electricity generation accrued from the beginning of year, the actual commercial electricity generation of the previous quarter, and accrued total commercial electricity generation, estimated total commercial electricity generation of the remaining months in year, and calculate the average electricity price by adopting the formula prescribed in Clause 2 Article 4 of Decision 24/2017/QD-TTg (other parameters remain unchanged).

- If the average electricity price is lower than the current average electricity price and in the prescribed bracket of electricity price after calculation, EVN shall assume responsibility to reduce the average electricity price to the corresponding level and submit report thereof to the Ministry of Industry and Trade and the Ministry of Finance for inspection.

- If the average electricity price needs to rise from 3% to below 5% in comparison with the current average electricity price and is in the prescribed bracket of electricity price after calculation, EVN shall make decision on increase of the average electricity price to the corresponding level. EVN shall prepare and send reports on increase of electricity price to the Ministry of Industry and Trade and the Ministry of Finance for inspection.

- If the average electricity price needs to rise from 5% to below 10% in comparison with the current average electricity price and is in the prescribed bracket of electricity price after calculation, EVN is allowed to rise the average electricity price to the corresponding level after submitting report and obtaining approval thereof from the Ministry of Industry and Trade. Within a period of 15 working days as from the receipt of reports, the Ministry of Industry and Trade shall give a written response thereof to EVN. After rising the electricity price, EVN must send reports thereof to the Ministry of Industry and Trade and the Ministry of Finance.

- If the average electricity price needs to rise 10% or above in comparison with the current average electricity price or is out of prescribed bracket of electricity price or may influence on the macroeconomic status after calculation, the Ministry of Industry and Trade shall take charge and cooperate with the Ministry of Finance in examining, reviewing and submitting reports thereof to the Prime Minister for consideration according to EVN’s plan for electricity price. The Ministry of Industry and Trade may cooperate with the Ministry of Finance to submit reports the Price Administration Steering Committee before submitting reports to the Prime Minister, where necessary.

Mai Thanh Loi

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