EVN 2025 power costs leave room for tariff review

The utility’s disclosure is more important than the headline spread alone. EVN said the 2025 figures were compiled from audited reports, including Deloitte Vietnam and EVN’s consolidated financial statements, and broken down by generation, transmission, distribution-retail, ancillary services and market operation. That level of segmentation gives policymakers a clearer view of where costs are being incurred and where pressure points sit in the chain.

Generation remains the dominant cost center, at 498.36 trillion dong, equivalent to 1,733.35 dong per kWh. Distribution and retail added 274.75 dong, transmission 77.01 dong and market operation 2.65 dong, while auxiliary and industry management cost 4.94 dong per kWh. EVN also reported a negative 290.97 billion dong balance from remote island systems not connected to the national grid, where sales remain below cost.

For investors and policymakers, the key issue is not whether electricity is “cheap” in an abstract sense, but whether the current tariff structure leaves enough flexibility to support growth, inflation control and utility balance sheets at the same time. Lower power prices would ease input costs for manufacturers, support consumer spending and help cap inflationary pressure, especially in an economy where electricity is a core industrial input. But any tariff cut would also reduce EVN’s headroom to absorb volatility in fuel prices, import costs and foreign-exchange movements.

That last point is crucial. EVN said it still had 17.51 trillion dong of costs not yet recognized in power prices as of end-2025, including unrecovered exchange-rate losses tied to power plants from 2021 and the 2022-2025 period. That suggests the system may not be as comfortable as the gap between cost and retail tariff implies. In other words, the current pricing comparison points to room for relief, but not necessarily to a clean case for a broad, immediate cut.

The more likely narrative is that Vietnam’s electricity regulator now has data that strengthens the case for a calibrated review rather than an automatic reduction. If fuel and exchange-rate pressures stay contained, policymakers could use the 111-dong cushion to ease tariffs, at least temporarily. If costs rise again, the same numbers may instead be used to justify maintaining the current price and preserving EVN’s financial stability.

For investors, the implications stretch beyond the power sector. Any move to lower electricity prices would be supportive for energy-intensive industries, transport and consumer demand, while a decision to keep tariffs unchanged would help EVN’s earnings visibility and reduce the risk of deferred cost accumulation. The next catalyst is likely to be policy, not arithmetic: how regulators interpret the 2025 cost base, and whether they prioritize inflation relief or utility balance-sheet repair.