Vietnam's Five-Tier Electricity Plan Would Cut Many Bills, but Savings Depend on Usage

Biggest savings at 400 kWh, higher charges for heavy users

A Vietnamese household using 400 kilowatt hours of electricity a month would save 38,500 dong under a proposed five-tier residential tariff, with its bill falling from 1,074,500 to 1,036,000 dong. A household using 1,000 kWh would face the opposite result: an increase of 146,900 dong, taking its bill to 3,297,400 dong.

Vietnam's Ministry of Industry and Trade is seeking comments on amendments that would allow the new structure to replace the existing six tiers without waiting for another adjustment to the average retail electricity price. The ministry says that average would remain at about 2,204.07 dong per kWh.

The proposal therefore changes how electricity charges are divided among customers. Lower consumption bands receive some relief, while higher bands carry more of the cost. A kilowatt hour, or kWh, measures electricity use: a device drawing one kilowatt continuously for one hour consumes one kWh.

The ministry estimates that about 94% of residential customers could receive lower bills. Its preliminary assessment puts the point where savings disappear at around 778 kWh a month. However, the detailed bill comparisons accompanying the proposal place that crossover between 710 and 711 kWh. That difference matters for households near those levels and requires clarification before customers can reliably estimate their savings.

The five-tier structure was already established in Decision No. 14/2025/QD-TTg, dated May 29, 2025. A transitional provision has kept the old structure operating while the new one waits for the next average price adjustment. The current proposal aims to remove that condition.

How the five bands would work

The draft groups household consumption into five bands, with each successive band charged at a higher rate. The percentages are measured against the average retail tariff, which serves as the reference for setting the individual prices.

• First 100 kWh: 90% of the average tariff, or about 1,984 dong per kWh.
• 101 to 200 kWh: 108%, or about 2,380 dong per kWh.
• 201 to 400 kWh: 136%, or about 2,998 dong per kWh.
• 401 to 700 kWh: 162%, or about 3,571 dong per kWh.
• Above 700 kWh: 180%, or about 3,967 dong per kWh.

A progressive tariff works like a staircase. A household using 401 kWh pays the first rate on its first 100 kWh, the second on its next 100, and the third on the following 200. Only its final kWh falls into the fourth band.

Crossing 700 kWh therefore makes each additional unit more expensive, while the earlier units retain their respective band prices. This explains why a household can enter the highest band and still retain some savings accumulated on its first 400 kWh.

Which households would save most?

The detailed comparison shows no change for a household using 50 kWh: its bill remains 99,200 dong. At 100 kWh, the bill falls from 201,700 to 198,400 dong, a saving of 3,300 dong.

That same saving of 3,300 dong appears at both 200 and 300 kWh. The respective bills fall from 439,700 to 436,400 dong and from 739,500 to 736,200 dong. Those households gain a modest reduction rather than a large change in their monthly expenses.

At 400 kWh, the saving reaches 38,500 dong, or about 3.58%, the largest reduction among the consumption levels examined from 50 to 700 kWh. The main reason is the treatment of electricity between 301 and 400 kWh: those units move from 3,350 dong each under the old structure to 2,998 dong under the draft.

A household consistently using 400 kWh every month would save 462,000 dong over 12 months, calculated from the monthly reduction of 38,500 dong. Actual annual savings would depend on its consumption each month, including any increase during hotter weather.

Why savings shrink above 400 kWh

The proposed rate for units between 401 and 700 kWh is 3,571 dong, compared with the current top rate of 3,460 dong. Each unit in that range therefore costs 111 dong more, gradually using up the savings accumulated at lower consumption levels.

At 500 kWh, the household still saves 27,400 dong. At 600 kWh, the saving falls to 16,300 dong, and at 700 kWh it is just 5,200 dong. Every additional block of 100 kWh in this range reduces the saving by 11,100 dong.

Above 700 kWh, the proposed unit price rises to 3,967 dong, which is 507 dong more than the existing top rate. At 701 kWh, the household still saves 4,693 dong. At 710 kWh, only 130 dong of savings remains; the next unit turns that into an increase of 377 dong.

By 800 kWh, the bill rises from 2,458,500 to 2,504,000 dong, an increase of 45,500 dong, or about 1.85%. At 1,000 kWh, the increase reaches about 4.66%. These calculations show how a small saving near the crossover can become a much larger additional charge as consumption rises.

Why the 94% estimate needs a clearer calculation

The ministry's preliminary assessment says households consuming below about 777 kWh a month represent roughly 94% of residential customers and account for approximately 73% of residential electricity use. It estimates that bills would be unchanged at 778 kWh. The detailed comparison above instead puts the crossover between 710 and 711 kWh.

The ministry also estimates that a household consuming 1,182 kWh a month, the average for the group using more than 700 kWh, could pay nearly 190,000 dong extra. Applying the detailed comparison's rates and starting figures produces an increase of about 239,000 dong at that consumption level. A reconciled calculation explaining these differences has not been given.

The starting price for the lowest existing band also needs attention. A listing associated with Decision No. 1279/QD-BCT, dated May 9, 2025, gives 1,940 dong per kWh for the first 50 kWh, while the worked comparison uses 1,984 dong. That affects whether a household using only 50 kWh sees an unchanged bill.

The customer shares still illustrate how uneven electricity consumption is. Using the ministry's figures, the remaining 6% of residential customers account for about 27% of residential electricity use. Their share of consumption is therefore much larger than their share of customer accounts, making changes to the upper bands especially consequential for them.

Why implementation has been delayed

Decision No. 14/2025/QD-TTg established the new structure, but linked its practical introduction to the next adjustment in the average retail electricity price. Because that adjustment had not occurred during the period described by the ministry, customers continued to be charged under the existing framework.

The ministry proposes repealing Article 6, the transitional provision, and removing the requirement to wait for an average price adjustment. It would then issue specific tariffs for the customer groups covered by the revised structure.

• May 9, 2025: Decision No. 1279/QD-BCT set out residential electricity prices under the six-tier system.
• May 29, 2025: Decision No. 14/2025/QD-TTg established the five-tier framework, with a condition delaying its application.
• April 22, 2026: Decision No. 963/QD-BCT specified revised peak and off-peak hours relevant to the accompanying business tariff changes.
• Current consultation: The ministry is seeking amendments so the new structure can begin when the amending decision takes effect.

The National Assembly Standing Committee's Committee for Public Petitions and Supervision urged earlier implementation and a clear start date in Report No. 1496/BC-UBDNGS16, dated October 1. Bui Quoc Hung, deputy director of the ministry's Electricity Authority, has also described the proposal to remove the transitional provision. No fixed commencement date or consultation deadline was given.

A wider first band, with different effects on families

The proposal expands the lowest consumption band from the first 50 kWh to the first 100 kWh. The ministry's design assessment estimates that households covered by this first band represent 33.48% of residential accounts, roughly one in three.

Dinh Trong Thinh, a senior lecturer at the Academy of Finance, argues that the separate band below 50 kWh is no longer necessary and makes calculations more complicated. Energy expert Ngo Duc Lam also supports expanding the preferential range for households using relatively little electricity.

Lam nevertheless urges caution about placing more of the cost on households with higher consumption. He points to growing demand for air conditioning during intense heat, including in homes with young children and older people. A family's electricity use can rise because of its cooling needs and household circumstances.

The proposal makes the trade-off concrete: fewer bands and a wider initial allowance bring savings to many customers, while higher marginal prices encourage those using more electricity to reduce consumption. For a household already above 700 kWh, each unit it avoids would reduce its charge by about 3,967 dong under the draft rates.

Businesses face a separate change in charging hours

The ministry is also considering changes to the hours used to charge certain business and production customers. These changes operate through the time electricity is consumed, while the household proposal operates through total monthly consumption.

Decision No. 963/QD-BCT specifies a new peak period from 5:30 p.m. to 10:30 p.m., Monday through Saturday, and an off-peak period from midnight to 6 a.m. daily. The existing schedule has peak periods from 9:30 a.m. to 11:30 a.m. and from 5 p.m. to 8 p.m., with off-peak hours from 10 p.m. to 4 a.m.

The change concentrates the peak period in the evening and moves the cheapest period later into the night. The ministry proposes initially applying the revised hours to large electricity users and production customers, leaving residential customers outside this time schedule.

Implementation also involves proposed amendments to Circular No. 60/2025/TT-BCT. Electricity of Vietnam, or EVN, has recommended applying the new retail structure consistently across customer groups, rather than limiting implementation to tourist accommodation and electric vehicle charging.

Factories and farms consider changing their schedules

The ministry's preliminary assessment puts the average electricity bill increase associated with the revised hours at below 9% for iron and steel production, below 6% for dragon fruit farming and tourist accommodation, and nearly 3% for electric vehicle charging stations.

Nguyen Van Long, who owns an export garment business in Thach That, Hanoi, says adjusting production shifts would depend on worker availability and operating requirements. Nguyen Ngoc Quang, general director of Vina Kyoei Steel, says the company is considering moving activities involving powerful machinery into daytime hours and investing in electricity storage.

Dragon fruit growers could move their lighting schedule from 7 p.m. to 5 a.m. to 8 p.m. to 6 a.m., according to the ministry. Both schedules last 10 hours, but the later one would include all six proposed off-peak hours and less time in the evening peak period.

The ministry says electricity represents less than 10% of steel production costs. On that basis, a 9% increase in the electricity bill would translate into less than 0.9% of total production costs if other spending remained unchanged. The effect on each business would depend on its own electricity use and ability to change operating hours.

Key Points

• Vietnam proposes replacing six household electricity tiers with five while keeping the average retail tariff at about 2,204.07 dong per kWh.
• The detailed comparison gives the largest saving at 400 kWh a month: 38,500 dong, or about 3.58%.
• At 800 kWh, the same comparison shows an increase of 45,500 dong; at 1,000 kWh, the increase is 146,900 dong.
• The ministry estimates that about 94% of residential customers could benefit, but its crossover estimate differs from the detailed bill calculations.
• The ministry seeks to remove a transitional condition delaying implementation. A fixed start date has not been announced.
• Separate proposed changes to business charging hours could increase electricity expenses for steel producers, farms, accommodation providers and charging stations.