EVN to review electricity prices every three months
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National utility Electricity of Vietnam (EVN) has agreed with a proposal of the Ministry of Industry and Trade to review retail electricity prices every three months to decide whether to make any adjustments.
If production costs increase by 3-5%, EVN is allowed to raise retail prices accordingly, but it needs to wait at least three months from the last adjustment, according to a draft decision that is being reviewed by government bodies.
If costs rise by 5-10% the raise must be approved by the Ministry of Industry and Trade, and higher hikes must be decided by the Prime Minister.
EVN suggested that the cost of electricity transmission includes system management costs after authorities proposed that the National Load Dispatch Center be moved from EVN to the Ministry of Industry and Trade.
Vietnam in May raised its retail electricity prices by 3% for the first time in four years.
Analysts said earlier that retail prices were unchanged for a long time and therefore were not updated with changes in production costs.
Questions & Answers
Q.What percentage increase in production costs allows EVN to adjust retail electricity prices without higher approval?
What percentage increase in production costs allows EVN to adjust retail electricity prices without higher approval?
EVN can raise retail prices if production costs increase by 3-5%, provided at least three months have passed since the last adjustment. This level of price hike does not require approval from the Ministry of Industry and Trade or the Prime Minister.
Q.Who must approve a retail electricity price increase if production costs rise by more than 10%?
Who must approve a retail electricity price increase if production costs rise by more than 10%?
If production costs rise by more than 10%, any resulting retail electricity price increase must be decided by the Prime Minister. The Ministry of Industry and Trade approves increases between 5-10%.
Q.When was the last time Vietnam's retail electricity prices were increased prior to the current proposed review cycle?
When was the last time Vietnam's retail electricity prices were increased prior to the current proposed review cycle?
Vietnam's retail electricity prices were last raised by 3% in May, marking the first increase in four years. Analysts had previously noted that prices had remained unchanged for an extended period.
Q.Why has EVN suggested including system management costs in electricity transmission expenses?
Why has EVN suggested including system management costs in electricity transmission expenses?
EVN made this suggestion after authorities proposed moving the National Load Dispatch Center from EVN to the Ministry of Industry and Trade. This implies a potential redefinition of cost components within the electricity transmission framework.
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