Vietnam power price to be adjusted by input parameters

The mechanism to adjust Vietnam's electricity price will based on the monthly calculation and examination of the volatility of fundamental input parameters in comparison with parameters in use to determine the current electricity price.

This is according to Circular 31/2011/TT-BCT providing regulations on the adjustment of electricity price by basic input parameters, which was issued by the Ministry of Industry and Trade.

Before the 20th day of each month, the Electricity of Vietnam shall perform testing and calculation based on the determined basic input parameters. In case the difference between the average electricity price and the current electricity price, due to the volatility of basic input parameters, is equal to or higher than 5%, EVN is shall report to the MOIT. After five days, if there is no direction from the MOIT, EVN shall be allowed to adjust at 5%.

With the adjustment of electricity price at a level higher than 5%, EVN must report the electricity price plan to the MOIT and Ministry of Finance for evaluation. Within 10 days, the MOIT, Ministry of Finance shall evaluate; then the MOIT shall submit to the Prime Minister for consideration and approval. After 15 working days, if the Prime Minister has no response, EVN shall be allowed to adjust the price only at 5%.

In case the difference between the average electricity price and the current electricity price is less than 5%, EVN is allowed to calculate and allocate power production costs which have not been included in the power price to the average price to increase the average electricity price by no more than 5%.

The Circular also specifies that the Electricity price stabilization fund shall be set up when the price difference is less than zero and electricity production costs which have not been included in the selling price of electricity have been fully allocated.

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