Proposal for EVN to calculate costs that have not been fully accounted for in electricity prices

By the end of 2024, EVN's accumulated loss will still be about 44,792 billion VND. Illustrative photo

The Ministry of Industry and Trade has just sent the Ministry of Justice for appraisal the third draft of the Decree amending and supplementing Decree 72/2025/ND-CP dated March 28, 2025 of the Government on the mechanism and time for adjusting the average retail electricity price. The expected time for submission for promulgation is in September.

According to a report by Vietnam Electricity Group (EVN), due to the impact of the geopolitical situation in the world, the cost of purchasing electricity increased in the period of 2022-2023, leading to many difficulties in production and business activities of EVN, with the accumulated loss of about 50,029 billion VND in these 2 years.

By the end of 2024, the accumulated loss of the parent company - EVN is still about 44,792 billion VND. This leads to a decrease in state investment capital in EVN, failing to preserve state investment capital in the enterprise. Therefore, if it is not calculated to recover in the electricity price, it will not be able to promptly compensate for the decrease in state investment capital in the previous years.

EVN proposed that the Minister of Industry and Trade report to the Prime Minister to allow the calculation of accumulated losses (direct costs for electricity production and supply that have not been calculated and fully compensated in the previous average retail electricity price) as a cost allowed to be calculated in the average retail electricity price.

The purpose of amending the regulations is to supplement contents related to direct production and business activities in the electricity sector, in order to facilitate enterprises to recover reasonable and valid costs in the process of electricity production and business; ensure that the cost targets calculated in the retail electricity price are clear, public, transparent, feasible and have a full legal basis, including costs arising from objective reasons that the electricity unit is unable to control but have not been fully calculated in the electricity price.

The Ministry of Industry and Trade proposed to add regulations allowing EVN to calculate other costs that have not been fully accounted for before into the average retail electricity price according to 2 options.

Option 1: Direct costs for electricity production and supply have not been calculated and fully offset in the previous average retail electricity price, based on EVN's audited annual separate financial statements from 2022 onwards.

This plan is implemented on a wide scale, not only allowing the allocation of direct costs for electricity production and supply that have not been calculated and fully compensated in the average retail electricity price in 2022 and 2023, but will continue to be applied in the coming years if it continues to happen.

However, this option has received many opinions that it eliminates the motivation of electricity units in controlling related costs because they are compensated through the average retail electricity price.

Option 2: Expenses directly serving the production and supply of electricity that have not been calculated and fully compensated in the average retail electricity price from 2022 to before the effective date of this Decree, are determined according to business performance results, with deductions for other operating profits (if any) in the financial statements.

The Ministry of Industry and Trade assesses that option 2 is only intended to handle the direct costs for electricity production and supply that have not been calculated and fully compensated in the average retail electricity price from 2022 to before the effective date of this Decree, and will not apply to the following years if it continues to occur.

This also requires electricity units to review, closely follow and consider in production and business implementation, to ensure minimizing and not letting this happen in the future.

Source: https://hanoimoi.vn/de-xuat-cho-evn-duoc-tinh-chi-phi-chua-hach-toan-day-du-vao-gia-dien-715354.html