Chương I: Quy định chung

CIRCULAR

ON CALCULATION OF AVERAGE ELECTRICITY RETAIL PRICES

Pursuant to Law on Electricity dated November 31, 2024;

Pursuant to Government’s Decree No. 40/2025/ND-CP dated February 26, 2025 on functions, tasks, powers and organizational structure of the Ministry of Industry and Trade of Vietnam.

Pursuant to Government’s Decree No. 72/2025/ND-CP dated March 28, 2025 on means and interval for adjusting average electricity retail prices;

At the request of the Director of Electricity Regulatory Authority of Vietnam;

The Minister of Industry and Trade promulgates a Circular on calculation of average electricity retail prices.

Chapter I

GENERAL PROVISIONS

Article 1. Scope and regulated entities

1. This Circular provides guidance on the calculation of average electricity retail prices stipulated in Article 4 of Government’s Decree No. 72/2025/ND-CP dated March 28, 2025 on means and interval for adjusting average electricity retail prices (hereinafter referred to as “Decree No. 72/2025/ND-CP”)

2. This Circular shall apply to Vietnam Electricity (hereinafter referred to as “EVN”); Power Corporation members; relevant organizations and individuals.

Article 2. Interpretation of terms

For the purposes of this Circular, the terms below shall be construed as follows:

1. CPI refers to the consumer price index provided by central statistics authority.

2. Operators of electricity systems and electricity markets refer to units responsible for the functions of national power system dispatch units and electricity market transaction regulation units according to the Law on Electricity (currently the National Power System and Market Operator Single-member Limited Liability Company – NSMO)

3. Market electricity price refers to the price for a defined unit of electricity for each transaction cycle, used to calculate market electricity payments.

4. Capacity-add-on (CAN) price refers to the price for each transaction cycle and is used to calculate electricity capacity payments for power generation units in the electricity market.

5. Average electricity retail price refers to retail electricity price determined based on principles of calculating the total generation and business costs of electricity and the average profit margin for 01 kWh of electricity in each period.

6. Year N refers to the year (from January 1 to December 31 of the calendar year) in which the average electricity retail price is calculated according to the regulations in this Circular.

7. Year N-1 is the Gregorian calendar year immediately preceding Year N.

8. Year N-2 is the Gregorian calendar year immediately preceding Year N-1.

9. BOT power plant refers to an power plant invested in the Build-Operate-Transfer form through a contract between investors and competent authorities.

10. Total commercial electricity output refers to the total electricity output sold by EVN and Power Corporations to customers.

11. Power Corporation refers to the member power corporations of Vietnam Electricity, including Northern Power Corporation, Southern Power Corporation, Central Power Corporation, Hanoi Power Corporation, and Ho Chi Minh City Power Corporation.

Chapter II

METHODS OF DETERMINING AVERAGE ELECTRICITY RETAIL PRICES

Section 1. METHODS OF DETERMINING THE ANNUAL AVERAGE ELECTRICITY RETAIL PRICE

Article 3. Methods of determining the annual average electricity retail price

1. Average retail electricity price in year N shall be calculated using formula prescribed in Clause 2, Article 4 of Decree No. 72/2025/ND-CP .

2. Power generation cost; costs of power plants providing electricity ancillary services; costs of purchasing electricity transmission services, cost of electricity distribution - retail, costs of purchasing electricity dispatch services and electricity market operation services, and costs for industry coordination – management shall be determined in accordance with Articles 4, 5, 6, 7, 8, and 9 of this Circular. {0

3. Electricity output of a power plant in year N shall be determined in accordance with the plan for power supply and operation of national power system for year N.

4. Total expected commercial electricity output for year N shall be calculated by EVN in accordance with the plan for power supply and operation of national power system for year N.

5. Applications for annual average electricity retail price plan shall comply with Clause 2 Article 5 of Decree No. 72/2025/ND-CP .

Article 4. Method of determining the total power generation cost

1. Total power generation cost in year N (C_PĐ) shall be determined using the following formula:

C_PĐ= C_TTĐ + C_ĐMT + C_BOT + C_TTN + C_NLTT + C_NK

Where:

a) C_TTĐ: Total electricity purchase cost in year N (VND) from power plants, which are directly and indirectly participating in the electricity market, determined as prescribed in Clause 2 of this Article;

b) C_ĐMT: Total cost and normal profit in year N (VND) from multi-purpose strategic hydropower plants and other dependent power plants during the period prior to participation in the competitive electricity market of EVN, determined as prescribed in Clause 3 of this Article.

c) C_BOT: Total electricity purchase cost in year N (VND) from BOT power plants, determined as prescribed in Clause 2 of this Article;

d) C_TTN: Total electricity purchase cost in year N (VND) from small-scale renewable energy power plants, determined as prescribed in Clause 2 of this Article;

dd) C_NLTT: Total electricity purchase costs of year N (VND) from power plants using renewable energy and new energy, including electricity storage system, determined as prescribed in Clause 2 of this Article;

e) C_NK: Total electricity purchase cost in year N (VND) via electricity import, determined as prescribed in Clause 2 of this Article;

2. Total electricity purchase costs from power plants, which are directly and indirectly participating in the electricity market (excluding multi-purpose strategic hydropower plants and other dependent power plants during the period prior to participation in the competitive electricity market of EVN), BOT power plants, small-scale renewable energy power plants, power plants using renewable energy and new energy including electricity storage system, and electricity import shall be determined on the basis of power purchase agreements and electricity market regulations, where:

a) Electricity output of power plants: as prescribed in Article 3 of this Circular;

b) Electricity output of power plants using renewable energy and new energy provided by operators of electricity systems and electricity markets;

c) Contractual output (Qc) of power plants directly participating in the electricity market provided by operators of electricity systems and electricity markets;

d) Average monthly market electricity price shall be calculated on the basis of electricity market simulation of operators of electricity systems and electricity markets according to the electricity market operation plan in year N;

dd) Average monthly capacity electricity price shall be approved on the basis of electricity market simulation of operators of electricity systems and electricity markets according to the electricity market operation plan in year N;

e) Electricity price and input parameters related to fuel, exchange rates of power plants directly and indirectly participating in the electricity market, BOT power plants, power plants using renewable energy and new energy, and electricity import shall be determined on the basis of the electricity prices used for calculation of the plan for power supply and operation of national power system in year N. For power plants expected to be operational in year N without electricity price determination, EVN shall propose an estimated price to estimate costs for year N;

g) Electricity purchase costs from small-scale renewable energy power plants applying the avoided cost tariff shall be determined according to avoided cost tariff in year N (if avoided cost tariff for year N is not available, avoided cost tariff for year N-1 shall be applicable) and the structure of peak, normal, and off-peak electricity output per month for each region in year N based on the ratio of electricity output structure per month for each region estimated in year N-1;

h) Electricity purchase cost of power plants directly participating in the electricity market shall be calculated and provided by operators of electricity systems and electricity markets.

3. Methods of determining total cost and normal profit in year N (VND) from multi-purpose strategic hydropower plants and other dependent power plants during the period prior to participation in the competitive electricity market of EVN shall be determined as follows:

a) Total cost from multi-purpose strategic hydropower plants and other dependent power plants during the period prior to participation in the competitive electricity market of EVN shall be determined according to the regulations of the Minister of Industry and Trade on methods of determining the power generation costs of power plants for certain types of power plants;

b) Normal profit shall be determined in accordance with Clause 5 Article 4 of Decree No. 72/2025/ND-CP .

Article 5. Methods of determining the total cost of power plants providing electricity ancillary services

1. Total cost of power plants providing electricity ancillary services in year N, including testing costs of power plants, shall be determined according to contracts for provision of ancillary services, where:

a) Electricity output shall be determined in accordance with Article 3 of this Circular;

b) Electricity prices and input parameters related to fuel, exchange rates shall be determined based on the parameters used by operators of electricity systems and electricity markets in formulating the plan for power supply and operation of national power system in year N.

2. In cases where power plants, generator groups affiliated to EVN have signed power purchase agreements with Power Corporations and participate in providing electricity ancillary services, these power plants and generator groups shall be calculated for fuel costs, operation and maintenance costs during the period of providing electricity ancillary services.

Article 6. Methods of determining the total cost of purchasing electricity transmission services

Total cost of purchasing electricity transmission services in year N (C_TT) is the total revenue of electricity transmission services allowed to be determined according to the regulations on methods, applications, procedures, and approval process for electricity transmission service prices issued by the Minister of Industry and Trade.

Article 7. Methods of determining the total cost of electricity distribution - retail and normal profit

1. Total electricity distribution – retail cost in year N is the total electricity distribution – retail cost of Power Corporations determined according to the regulations on methods, procedures, and approval process for electricity wholesaling price bracket; methods of determining wholesale electricity prices; and main contents of power purchase agreements issued by the Minister of Industry and Trade.

2. Normal profit shall be determined in accordance with Clause 5 Article 4 of Decree No. 72/2025/ND-CP .

Article 8. Methods of determining the total cost of purchasing electricity dispatch services and electricity market operation services

Total cost of purchasing electricity dispatch services and electricity market operation services in year N (C_ĐĐ) is the total revenue of electricity dispatch services and electricity market operation services allowed for year N by operators of electricity systems and electricity markets, determined according to the regulations on methods, applications, procedures, and approval process for electricity dispatch services and electricity market operation services prices issued by the Minister of Industry and Trade.

Article 9. Methods of determining the total cost for industry coordination – management and normal profit

Total cost for industry coordination – management includes management costs engaged in electricity generation and business of EVN. Total cost for industry coordination – management and normal profit in year N (C_chung) shall be determined using the following formula:

C_chung = C_VL + C_TL + C_KH + C_SCL + C_MN + C_BTK + C_TC + GT + LN

Where:

a) C_VL: Total outsourced service cost in year N of the ancillary service provider shall be determined based on data audited by an independent audit firm in year N-2, excluding any extraordinary and abnormal costs incurred in Year N-2, with annual indexation adjusted based on average CPI of the 03 most recent years prior to the cost determination period, as published by the central statistical agency. Additionally, the reasonable projected costs arising in Year N that were not accounted for or not fully accounted for in Year N-2 shall be included.

b) C_TL: CTLi,N : total labor costs in year N (VND), including total wages and wage-related expenses such as electrical safety allowances, health insurance, social insurance, unemployment insurance, and trade union fees, determined in accordance with relevant legal regulations;

c) C_KH: Total depreciation costs of fixed assets in year N (VND), determined based on the regulations on the management, utilization, and depreciation of fixed assets issued by the Ministry of Finance or other competent authorities;

d) C_SCL: Total major repair costs in Year N (VND), determined based on the estimated repair items for Year N as approved by the competent authority;

dd) C_MN: Total outsourced service cost in year N (VND), determined based on audited financial reports on the results of inspections or disclosure of electricity generation costs in year N-2, excluding any extraordinary and abnormal costs incurred in Year N-2, with annual indexation adjusted based on average CPI of the 03 most recent years prior to the electricity retail cost determination period. Additionally, the reasonable projected costs arising in Year N that were not accounted for or not fully accounted for in Year N-2 shall be included.

e) C_BTK: Total other monetary costs in year N (VND), including: taxes, fees, charges, land rents, meal allowances and other monetary expenses estimated for year N. Taxes, fees, charges, land rents, meal allowances and other monetary expenses estimated for year N shall be determined in accordance with regulations. Total other monetary costs in year N (VND) shall be determined based on audited financial reports on the results of inspections or disclosure of electricity generation costs in year N-2, excluding any extraordinary and abnormal costs incurred in Year N-2, with annual indexation adjusted based on average CPI of the 03 most recent years prior to the electricity retail cost determination period. Additionally, the reasonable projected costs arising in Year N that were not accounted for or not fully accounted for in Year N-2 shall be included.

g) C_TC: Total financial costs in year N (VND), including: total interest expenses, bond issuance costs, financial lease expenses, and loan-related fees payable in Year N determined based on contracts, legally binding documents, and projected loans for generation and business activities in Year N; foreign exchange rate differences determined in accordance with financial accounting;

h) GT: Cost deductions (VND);

i) Normal profit shall be determined in accordance with Clause 5 Article 4 of Decree No. 72/2025/ND-CP .

k) In cases where independent audit data for year N-1 is available, use the data for material costs, outsourced service costs, and other monetary costs of year N-1 to calculate the corresponding costs for year N.

Section 2. METHODS OF DETERMINING THE ANNUAL AVERAGE ELECTRICITY RETAIL PRICE

Article 10. Methods of determining the annual average electricity retail price

1. Average retail electricity price in year N shall be calculated using formula prescribed in Clause 2, Article 4 of Decree No. 72/2025/ND-CP .

2. These parameters shall be kept constant in annual average electricity retail price plans: Total cost of purchasing electricity transmission services, electricity dispatch - operation services and market operation services; total cost of electricity distribution – retail and normal profit; total cost for industry coordination – management and normal profit.

3. Total generation cost, total costs of power plants providing electricity ancillary services updated shall be updated quarterly in accordance with Article 11 and Article 12 of this Circular.

4. Applications for annual average retail electricity price shall be specified in Clause 2, Article 6 of Decree No. 72/2025/ND-CP .

Article 11. Method of determining the total power generation cost

1. Electricity output shall be determined according to the operation method of the national power system in April of year N for the updated price update plan for the first quarter, in July of year N for the updated price update plan for the second quarter, and in October of year N for the updated price update plan for the third quarter, or the updated price plan for power supply and operation of national power system in year N.

2. Electricity prices and input parameters related to fuel, exchange rates shall be determined based on the parameters used by operators of electricity systems and electricity markets in formulating the updated plan for power supply and operation of national power system in year N. For power plants expected to be operational in year N without electricity price determination, EVN shall propose an estimated price to estimate costs for year N;

3. Total generation cost updated quarterly in year N shall be determined using the formula prescribed in Clause 1, Article 4 of this Circular.

4. Electricity purchase costs from power plants updated quarterly in year N, which are directly and indirectly participating in the electricity market (excluding multi-purpose strategic hydropower plants and other dependent power plants that have not participated in the competitive electricity market of EVN), BOT power plants, small-scale renewable energy power plants, power plants using renewable energy and new energy including electricity storage system, and electricity import shall be determined on the basis of power purchase agreements, electricity purchasing costs for the first few months of the year, and estimated electricity purchasing costs for the remaining months in the year, where:

a) Electricity purchasing costs for the first few months of year N shall be determined on the basis of actual electricity purchasing cost payment documents, estimated for expenses that do not have or do not have complete payment documents at the time of pricing plan formulation;

b) Estimated electricity purchasing costs for remaining months of year N shall be determined based on:

b1) Expected electricity output for last months of the year as prescribed in Clause 1 of this Article;

b2) Electricity output of power plants using renewable energy and new energy for last month of the year provided by the operators of electricity systems and electricity markets;

b3) Contracted electricity output (Qc) of power plants directly participating in the electricity market announced by operators of electricity systems and electricity markets at the time of formulating the plan for power supply and operation of national power system for year N, which is updated to the time of calculation of the national electricity system operation method as prescribed in Clause 1 of this Article;

b4) Monthly average market electricity price shall be calculated by operators of electricity systems and electricity markets based on the results calculated in April for formulating the updated price update plan for the first quarter of year N, in July for formulating the updated price update plan for the second quarter of year N, and in October for formulating the updated price update plan for the third quarter of year N, or the updated price plan for power supply and operation of national power system in year N;

b5) Monthly average market capacity price according to the approved electricity market operation plan for year N;

b6) Electricity price and input parameters related to fuel, exchange rates of power plants directly and indirectly participating in the electricity market, BOT power plants, power plants using renewable energy and new energy, and electricity import: determined according to Clause 2 of this Article;

b7) Electricity purchase costs from small-scale renewable energy power plants applying the avoided cost tariff: shall be determined according to avoided cost tariff in year N (if avoided cost tariff for year N is not available, avoided cost tariff for year N-1 shall be applicable) and the structure of peak, normal, and off-peak electricity output for the remaining months for each region in year N based on the corresponding ratio of electricity output structure per month for each region estimated in year N-1;

c) Electricity purchase cost of the remaining months of year N from power plants directly participating in the electricity market calculated and provided by operators of electricity systems and electricity markets.

5. Total costs from multi-purpose strategic hydropower plants and other dependent power plants during the period prior to participation in the competitive electricity market of EVN shall be updated quarterly in year N including taxes, fees, and payments that vary based on electricity output and fuel costs. The quarterly updated electricity output used to calculate taxes, fees, payments, and fuel costs is the electricity output as prescribed in Clause 1 of this Article. Profit according to the annual average electricity retail price plan.

Article 12. Methods of determining total costs of power plants providing electricity ancillary services

1. Total costs of power plants, generating groups proving electricity ancillary services shall be updated quarterly in year N based on the principles of costs for the first months of year N stipulated in Clause 2 of this Article, and estimated costs for the remaining months in year N stipulated in Clause 3 of this Article.

2. Electricity purchasing costs for the first few months of year N which have been incurred shall be determined based on payment documents for electricity purchasing costs for power plants with payment records and estimates for power plants without payment records. In cases where power plants, generator groups affiliated to EVN have signed power purchase agreements with Power Corporations and participate in providing electricity ancillary services, fuel costs, operation and maintenance costs shall be calculated based on actual incurred costs.

3. Estimated electricity purchasing costs for the remaining months of year N for power plants and generator groups providing electricity ancillary services shall be determined based on:

a) Estimated electricity output for the remaining months of year N shall be determined in accordance with Clause 1, Article 11 of this Circular;

b) Electricity prices and input parameters related to fuel, exchange rates for the remaining months of year N shall be determined in accordance with Clause 2, Article 11 of this Circular.

Chapter III

IMPLEMENTATION

Article 13. Responsibilities of the Electricity Authority

Take charge, cooperate with relevant agencies to report to the Minister of Industry and Trade on inspection, review, and supervision of the average retail electricity price plan developed and adjusted by EVN, in accordance with Decree No. 72/2025/ND-CP .

Article 14. Responsibilities of EVN

EVN shall comply with Decree No. 72/2025/ND-CP and regulations stipulated in this Circular.

Article 15. Responsibilities of operators of electricity systems and electricity markets

Operators of electricity systems and electricity markets shall calculate and provide data to EVN in accordance with Article 4, Article 5, Article 8, and Article 11 of this Circular.

Article 16. Effect

1. This Circular comes into force from the date on which it is signed.

2. Annul the Circular No. 09/2024/TT-BCT dated July 30, 2024 of the Minister of Industry and Trade./.