ĐIỆN LỰC BÌNH DƯƠNG_HOÀNG GIÁM (38).jpg
The retail electricity pricing structure is being proposed for improvement. Photo credit: Hoang Giam.

The Ministry of Industry and Trade has proposed a revised retail electricity pricing structure, reducing the current six tiers to five.

Under the proposed plan, the highest tier could exceed 3,700 VND/kWh ($0.15), a significant increase compared to the current peak rate of 3,302 VND/kWh ($0.14).

Five-tier electricity pricing structure

In its submission to the Ministry of Justice for review, the Ministry of Industry and Trade outlined a new pricing system proposed by Vietnam Electricity (EVN) and its advisors. This system reduces the number of pricing tiers and adjusts their distribution to reflect the average retail price of electricity.

The proposed five tiers are as follows: Tier 1: 0–100 kWh; Tier 2: 101–200 kWh; Tier 3: 201–400 kWh; Tier 4: 401–700 kWh; Tier 5: Over 700 kWh

Proposed rates for each tier based on the average retail electricity price of 2,103.12 VND/kWh ($0.086) are:

Tier: Adjustment to Average Price; Proposed Price (VND/kWh)
Tier 1: 0–100 kWh; 90%; 1,892.8
Tier 2: 101–200 kWh; 108%; 2,271.5
Tier 3: 201–400 kWh; 136%; 2,860.2
Tier 4: 401–700 kWh; 162%; 3,407.0
Tier 5: Over 700 kWh; 180%; 3,785.6

This revision maintains the current rate for Tier 1 to protect low-income households and social policy beneficiaries, who represent 33.48% of all households. Revenue shortfalls from this tier will be offset by higher rates for consumers using over 400 kWh.

Additionally, rates for Tiers 2 and 3 remain unchanged, while rates for Tiers 4 and 5 are increased to encourage energy conservation and offset revenue shortfalls in lower tiers.

Impact on electricity bills

Under the new structure, households consuming over 400 kWh will face higher electricity bills. For instance, a household consuming 500 kWh in a month would see their bill rise significantly due to the higher rates in Tiers 4 and 5.

The Ministry also proposed separating "tourism accommodations" from other business categories and applying production customer rates to these establishments.

Among stakeholders consulted, 11 out of 18 preferred spreading the revenue shortfall across all customer groups, while 7 supported redistributing the shortfall within off-peak production rates.

EVN’s analysis showed that current production rates do not fully reflect the costs of electricity production and distribution. To address this, the Ministry suggested adjusting production rates by 1–2% above the average retail price, increasing production electricity costs by 2.41–3.34% depending on industry type.

Updates to high-voltage customers

The proposal also includes adding customers using electricity at 220 kV to the pricing structure. These customers, such as power plants using electricity for internal operations, do not utilize the distribution grid and are therefore exempt from associated costs.

Proposed rates for electricity at 220 kV are:

Normal hours: 84% of the average retail price (1,766.6 VND/kWh)

Off-peak hours: 53% of the average retail price (1,114.6 VND/kWh)

Peak hours: 146% of the average retail price (3,073.4 VND/kWh)

This adjustment aims to align rates with production and distribution costs, ensuring pricing reflects actual expenses.

Luong Bang