Circular No. 08/2010/TT-BCT on electricity selling prices for the year 2010 and guidance on implementation

CIRCULAR

Regulations on electricity sales prices for 2010 and guidance on implementation

_______________________

THE MINISTER OF INDUSTRY AND TRADE

Pursuant to Decree No. 189/2007/ND-CP dated December 27, 2007, issued by the Government, detailing the functions, tasks, powers, and organizational structure of the Ministry of Industry and Trade;

Pursuant to the Electricity Law dated December 3, 2004; Government Decree No. 105/2005/NĐ-CP dated August 17, 2005 detailing and guiding the implementation of certain provisions of the Electricity Law;

Pursuant to Decision No. 21/2009/QĐ-TTg dated February 12, 2009 of the Prime Minister on electricity sale prices for the year 2009 and the years 2010-2012 under the market mechanism;

Pursuant to Notification No. 50/TB-VPCP dated February 12, 2010, issued by the Government Office regarding the Prime Minister's conclusions on the Electricity Price Scheme for 2010;

At the proposal of the Director of the Electricity Regulatory Authority,

The Ministry of Industry and Trade hereby stipulates the electricity sales prices for 2010 and provides guidance on their implementation as follows:

PART I

GENERAL PROVISIONS

Article 1. Scope of Regulation and Applicability

1. This Circular sets forth the wholesale electricity prices, retail electricity prices, and guidance on implementing the electricity sales prices for 2010.

2. This Circular applies to organizations and individuals purchasing and selling electricity from the national power grid.

3. Electricity sales prices in areas not yet connected to the national power grid shall be decided by the People's Committee of the province after receiving written opinions from the Electricity Regulatory Authority.

Article 2. Average Electricity Sale Price

The average electricity sales price for 2010 is 1,058 VND/kWh (excluding value-added tax), corresponding to detailed calculation parameters set out in Part B of the Appendix to this Circular.

Article 3. Electricity Sale Prices Based on Voltage Level

1. Electricity sales prices according to voltage levels prescribed in this Circular apply to all electricity consumers except those purchasing electricity at residential retail rates, rural wholesale rates, collective housing areas, and community clusters.

2. The electricity metering system installed at which voltage level determines the electricity selling price according to the price prescribed at that voltage level.

Article 4. Electricity Sale Prices Based on Time of Day Usage

Electricity sale prices are defined based on time of day usage (hereinafter referred to as three-tier pricing) as follows:

1. Normal Hours

a) From Monday to Saturday

- From 04:00 to 09:3005 hours and 30 minutes);

- From 11:30 to 17:0005 hours and 30 minutes);

- From 20:00 to 22:0002 hours).

b) Sunday

From 04:00 to 22:0018 hours).  

2. Peak Hours

a) From Monday to Saturday

- From 09:30 to 11:3002 hours);

- From 17:00 to 20:0003 hours).

b) Sunday: no peak hours.

3. Off-Peak Hours

All days of the week: from 22:00 to 04:00 the following morning06 hours).

Article 5. Conditions for applying wholesale electricity prices

1. The wholesale electricity prices prescribed in Articles 8, 9, and 10 of this Circular shall apply to electricity retailers meeting the following conditions:

a) Possessing a Power Business License in the distribution and retail sectors, issued by the competent authority, except for cases exempted from obtaining such a license under point c, Clause 1, Article 34 of the Electricity Law;

b) Maintaining accounting books in accordance with regulations, with the retail electricity business portion being separately accounted for from other business activities;

c) Having a purchase and sale contract for electricity and individual metering devices installed for each electricity user as stipulated in Article 24 of the Electricity Law; issuing electricity bills for each consumer according to the payment period specified in the purchase and sale contract, in accordance with regulations of the Ministry of Finance.

Article 6. Guidance on implementing electricity sales prices

1. The electricity sales prices prescribed in this Circular do not include value-added tax.

2. Detailed guidance on implementing the pricing schedule is provided in Part A of the Appendix to this Circular.

3. Effective date of the pricing schedule: March 1, 2010.

Chapter II

RETAIL ELECTRICITY PRICES

Article 7. Wholesale electricity prices for State-owned Power Corporations

1. The average wholesale electricity price sold by Vietnam Electricity Corporation (Electricity Trading Company - EPTC) to State-owned Power Corporations at delivery points is 718.1 VND/kWh, including:

a) Average production cost at delivery points (including generation costs, imported electricity costs, and transmission losses): 710.0 VND/kWh;

b) Average cost for system dispatching, market operation management, ancillary services, and industry management: 8.1 VND/kWh.

2. The average transmission cost at delivery points corresponding to the volume of electricity transmitted through the transmission network to the distribution network is 80.4 VND/kWh.

3. By April 15, 2010, Vietnam Electricity Corporation shall establish adjusted wholesale prices for each State-owned Power Corporation and cross-subsidy amounts among State-owned Power Corporations based on the principles ensuring the return on equity of each State-owned Power Corporation according to the approved 2010 electricity price plan, and report to the Electricity Regulatory Authority.

In case the determination of adjusted wholesale prices for each State-owned Power Corporation and cross-subsidy amounts does not comply with the principles and calculation parameters, within 15 days, the Electricity Regulatory Authority shall issue a notice to Vietnam Electricity Corporation to suspend application and provide explanations and recalculate.

4. During the implementation of the 2010 electricity sales prices, if the profits from power generation, transmission, and distribution do not meet the calculated levels in the approved 2010 electricity price plan, before December 15, 2010, Vietnam Electricity Corporation shall prepare a recalculated report, submit it to the Electricity Regulatory Authority for review and approval to implement.

Article 8. Wholesale Electricity Price for Rural Areas

1. Conditions for Application

The wholesale electricity price for rural areas shall be applied to retail electricity units in rural areas that meet the conditions stipulated in Article 5 of this Circular, for the quantity of electricity purchased at the total meter installed at the transformer station.

For retail electricity units in rural areas that do not meet the above conditions, the Department of Industry and Trade shall have the responsibility to report to the People's Committee of the province to revoke the power operation license and transfer the operations to Power Companies to directly supply electricity to rural electricity users.

2. Wholesale electricity prices for rural residential use are as follows:

The wholesale electricity price for rural residential use is the price sold at the total meter by Power Companies or authorized units under EVN to retail electricity units in rural areas. The principle for determining the number of households using electricity after each total meter is specified in point b, Clause 1, Section IV, Part A of the Appendix of this Circular.

3. The wholesale electricity price for pumping water for irrigation purposes at the total meter purchasing rural electricity is 703 VND/kWh.

4. The wholesale electricity price for other purposes (excluding residential use and pumping water for irrigation) at the total meter purchasing rural electricity is 1,010 VND/kWh.

Article 9. Wholesale Electricity Price for Collective Housing Areas and Residential Clusters

1. Conditions for Application

The wholesale electricity price for collective housing areas and residential clusters applies to retail electricity units that meet the conditions stipulated in Article 5 of this Circular at the total meter installed at the transformer station or at the branch point of the low-voltage distribution line.

2. Wholesale electricity prices for residential use in collective housing areas and residential clusters are as follows:

The wholesale electricity price for residential use in collective housing areas and residential clusters is the price sold at the total meter by Power Companies or authorized units to retail electricity units in collective housing areas and residential clusters.

The wholesale electricity price for high-rise apartment buildings in cities and new urban areas is equal to the stepped residential electricity retail price stipulated in Article 15 of this Circular, reduced by 2.5% according to the corresponding stepped levels.

The principle for determining the number of households using electricity after each total meter is specified in point b, Clause 1, Section V, Part A of the Appendix of this Circular.

3. The wholesale electricity selling price for purposes other than residential use in collective housing areas and community clusters is stipulated as follows:

Article 10. Wholesale Electricity Price for Industrial Zones

1. The wholesale electricity price at the 110kV busbar of the 110kV transformer station in industrial zones applies to cases where retail electricity units purchase electricity at the 110kV busbar of the industrial zone (the 110kV station invested by the buyer) to sell to electricity users within the industrial zone, as follows:

2. The wholesale electricity price sold by Power Companies to retail electricity units at the medium-voltage busbar of the 110/35-22-10-6kV transformer station or at the branch point of the medium-voltage line entering the industrial zone is equal to the retail electricity price for production industries at the corresponding medium-voltage level stipulated in Article 11 of this Circular, reduced by 2%.

3. The wholesale electricity price sold by Power Companies to retail electricity units at the medium-voltage side of low-voltage transformer stations is equal to the retail electricity price applicable to production industries at the corresponding medium-voltage level stipulated in Article 11 of this Circular.

Chapter III

ELECTRICITY SALES PRICE LIST

Article 11. Retail electricity prices for production sectors

Retail electricity prices for production sectors are as follows:

Article 12. Retail electricity prices for irrigation water pumping

Retail electricity prices for irrigation pumps are as follows:

Article 13. Retail electricity prices for administrative and public service entities

Retail electricity prices for administrative and public service entities are as follows:

Article 14. Retail electricity prices for business activities

Retail electricity prices for business purposes are as follows:

Article 15. Tiered retail electricity prices for residential use

Retail electricity prices for residential purposes are as follows:

Article 16. Retail electricity prices in areas without national power grid

The retail electricity supplier shall develop a pricing proposal based on the principle of ensuring business operation with reasonable profit and clearly identifying cost compensation sources, to be submitted to the Department of Industry and Trade for review and then to the provincial People's Committee for approval. Before issuing the approval decision, the provincial People's Committee is responsible for sending the detailed proposal to the Electricity Regulatory Authority for examination and written comments.

Article 17. Retail electricity prices in industrial zones with independent power generation

The retail electricity supplier in industrial zones with independent power generation or suppliers with independent power generation combined with purchasing electricity from the national power system, selling electricity to customers in industrial zones, shall be responsible for establishing retail electricity prices for customers in industrial zones, to be submitted to the provincial People's Committee for approval after receiving written comments from the Electricity Regulatory Authority.

Chapter IV

IMPLEMENTATION

Article 18. Inspection Responsibilities

1. The Department of Industry and Trade is responsible for inspecting and supervising the implementation of electricity prices by retail electricity suppliers within its jurisdiction as stipulated in this Circular. In case of discovering that suppliers do not meet the conditions specified in Articles 8 and 9 of this Circular, the Department of Industry and Trade shall take measures to suspend operations of violating organizations, report to the provincial People's Committee to revoke the power operation license issued by the provincial People's Committee, or report to the Electricity Regulatory Authority to revoke the power operation license issued by the Electricity Regulatory Authority, and transfer the power supply directly to customers to relevant Power Companies.

2. The Department of Industry and Trade is responsible for coordinating with Power Companies to inspect and supervise the implementation of retail electricity prices at rental housing locations to ensure tenants are subject to the tiered residential electricity prices as prescribed in this Circular.

Article 19. Effective Date

1. This Circular takes effect from March 1, 2010, replacing Circular No. 05/2009/TT-BCT dated February 26, 2009, of the Ministry of Industry and Trade on electricity prices for 2009 and guidance on implementation.

Abolish the Circular No. 8527/BCT-ĐTĐL dated August 28, 2009, of the Ministry of Industry and Trade on guiding the implementation of peak hour electricity price reductions.

2. The Electricity Regulatory Authority is responsible for guiding the implementation of this Circular. During the implementation process, if there are any difficulties, relevant units are required to report directly to the Electricity Regulatory Authority for consideration and resolution.

3. The Director of the Electricity Regulatory Authority, the Head of the Ministry's Office, the Inspector General of the Ministry, the Directors of the Departments of Industry and Trade, the General Directors of the Vietnam Electricity Corporation, the Directors of Power Companies, related power units, and other organizations and individuals concerned are responsible for implementing this Circular./.