Circular No. 14/2025/TT-BCT stipulates the method for establishing, dossier, procedure, and approval process for electricity transmission service prices.

CIRCULAR

(vi) Agreement on the amount of reserve left behind and the deadline for selling the purchased cash foreign currency to the authorized credit institution. method of establishment, dossier, procedure, and approval process

for electricity transmission service prices

Pursuant to the Electricity Law dated November 30, 2024;

Pursuant to Decree No. 96/2022/NĐ-CP dated November 29, 2022 of the Government stipulating the functions, tasks, powers, and organizational structure of the Ministry of Industry and Trade; Decree No. 105/2024/NĐ-CP dated August 1, 2024 amending and supplementing certain articles of Decree No. 96/2022/NĐ-CP and Decree No. 26/2018/NĐ-CP dated February 28, 2018 of the Government on the Charter of Organization and Operation of Vietnam Electricity Corporation;

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

The Minister of Industry and Trade issues this Circular stipulating the method of establishment, dossier, procedure, and approval process for electricity transmission service prices; the guidance method and pricing form for transmission networks built by non-state economic sectors as provided for in points a and b, Clause 6, Article 51 of the Electricity Law No. 61/2024/QH15..

PART I

GENERAL PROVISIONS

Article 1. Scope of Regulation and Applicability

1. This Circular stipulates the method of establishment, dossier, procedure, and approval process for electricity transmission service prices; the guidance method and pricing form for transmission networks built by non-state economic sectors as provided for in points a and b, Clause 6, Article 51 of the Electricity Law No. 61/2024/QH15.

2. This Circular applies to Vietnam Electricity Corporation, Transmission Units, Electricity Trading Companies, Power Corporations, and direct electricity purchasing customers from the transmission network.

Article 2. Interpretation of Terms

In this Circular, the following terms shall be understood as follows:

1. The State management agency for electricity under the Ministry of Industry and Trade is the unit assigned the function, task, and authority to manage electricity according to regulations.

2. CPI is the Consumer Price Index published by the central statistical agency.

3. Point of power delivery and receipt is the point where Transmission Units or Power Corporations or direct electricity purchasing customers from the transmission network connect, equipped with metering systems as prescribed.

4. Entities required to pay transmission electricity costs include Vietnam Electricity Corporation, Electricity Trading Companies, Power Corporations, and direct electricity purchasing customers from the transmission network.

5. Transmission Unit is an electricity entity licensed to operate in the transmission sector, responsible for managing and operating the national transmission grid, including: National Power Transmission Corporation and other Transmission Units owned by economic sectors investing in transmission networks.

6. Transmission network users are organizations and individuals with electrical equipment and networks connected to the transmission network to use transmission services, including: Vietnam Electricity Corporation, Power Corporations, and direct electricity purchasing customers from the transmission network.

7. Year N is the calendar year from January 1 to December 31 of the price application year.

8. Year N-1 is the calendar year immediately preceding Year N.

9. Year N-2 is the calendar year immediately preceding Year N-1.

10. Transmission assets include transmission networks, construction works, and auxiliary equipment used for transmission operations owned by Transmission Units.

11. Power Corporations are member corporations of Vietnam Electricity Corporation, including: Northern Power Corporation, Southern Power Corporation, Central Power Corporation, Hanoi Power Corporation, and Ho Chi Minh City Power Corporation.

Chapter II

METHODS FOR DETERMINING ELECTRICITY TRANSMISSION SERVICE PRICES

Article 3. Principles and Methods for Determining the Price of Electricity Transmission Services

1. The price of electricity transmission services is determined annually based on reasonable and valid costs for electricity transmission activities of the Transmission Company with a reasonable profit margin.

2. The price of electricity transmission services for year N of each Transmission Company is determined according to a specific pricing method based on the permitted total revenue for electricity transmission for year N of the Transmission Company and the estimated total electricity energy transmitted for year N, calculated as follows:

Where:

a) is the permitted total revenue for electricity transmission for year N of the Transmission Company (VND), determined in accordance with Article 4 of this Circular;

b) is the estimated total electricity energy transmitted for year N (kWh), determined as follows:

b1) For the National Power Transmission Corporation: equal to the estimated total electricity energy received and delivered at the delivery points with the Power Corporation or direct electricity customers from the transmission grid;

b2) For other Transmission Companies: equal to the estimated total electricity energy transmitted through the transmission grid owned by that company at the delivery points with other Transmission Companies or the Power Corporation or direct electricity customers from the transmission grid;

b3) The determination of electricity energy received and delivered at the delivery points shall be carried out in accordance with the legal provisions on electricity metering.

3. The price of electricity transmission services will be adjusted according to actual changes in input parameters including: foreign exchange rates, borrowing interest rates, electricity energy transmitted, depreciation costs of fixed assets, taxes, fees, and other payments to the State, or in cases of accidents, disasters, or force majeure events as stipulated by laws on emergency situations and related laws causing fluctuations in transmission operation costs.

When the price of electricity transmission services is updated according to actual changes in the aforementioned input parameters (other parameters remain unchanged) or in cases where accidents, disasters, or force majeure events change by ±1% or more compared to the approved price of electricity transmission services for the year, the price of electricity transmission services will be reviewed for adjustment according to the procedures and formalities prescribed in Article 10 of this Circular.

Article 4. Method for Determining the Permitted Total Revenue for Electricity Transmission Annually

The permitted total revenue for electricity transmission for year N includes permitted capital cost components , permitted operating and maintenance costs, permitted profit and revenue adjustment amount for year N, determined as follows:

Where:

1.  is the permitted total capital cost for electricity transmission for year N of the Transmission Company (VND), determined in accordance with Article 6 of this Circular;

2.  is the permitted total operating and maintenance cost for electricity transmission for year N of the Transmission Company (VND), determined in accordance with Article 7 of this Circular;

3. LN_{N |||} is the permitted profit forecast for year N of the Transmission Company (VND), determined in accordance with Article 5 of this Circular;

4.  is the revenue adjustment amount for year N including the forecasted deposit interest income for year N of the Transmission Company (based on the deposit plan for year N), income from the disposal and sale of fixed assets and equipment forecasted for year N (based on the disposal and sale plan for assets and equipment for year N).

Article 5. Method for Determining Allowable Profit

Allowable profit for year N (LN)_{N |||}) of the Transmission Unit is determined according to the following formula:

Where:

1.  is the equity of the Transmission Unit on June 30 of year N-1 (in dong), where the equity of the National Power Transmission Corporation Limited is the State capital invested by the Vietnam Electricity Group for production and business activities in the National Power Transmission Corporation Limited as reported in the second quarter financial report of year N-1, and the equity of other Transmission Units is the capital forming transmission assets invested in accordance with relevant laws;

2. TNDN_{N |||} is the pre-tax profit margin on equity for year N applicable to the Transmission Unit (%), which is determined according to Clause 1, Article 3 of this Circular, not exceeding the pre-tax profit margin prescribed in the Government Decree stipulating the mechanism and time for adjusting the average retail electricity price.

Article 6. Method for Determining Allowable Total Transmission Capital Costs

1. Allowable total transmission capital costs for year N are determined according to the following formula:

Where:

a)  is the total depreciation cost of fixed assets expected for year N (in dong);

b) is the total financial cost expected including short-term and long-term loans, bonds, financial leasing, and fees for borrowing that must be paid in year N for transmission assets (in dong);

c)   is the expected foreign exchange rate difference arising from repaying foreign currency loans in year N (in dong);

d) is the expected revaluation foreign exchange rate difference in year N (in dong);

đ) is the expected allocation amount in year N of the previously unallocated foreign exchange loss difference.

2. Total depreciation cost of fixed assets expected for year N is determined based on the current value of fixed assets and those expected to be put into use in year N according to the regulations on management, use, and depreciation of fixed assets issued by the Ministry of Finance or authorized agencies.

3. Total financial cost expected for year N is determined according to existing credit contracts, financial leasing contracts, and expected loan amounts for transmission activities in year N with floating interest rates expected to be referenced from existing loan contracts, documents, and offers from lending organizations and banks but not exceeding the corresponding foreign and domestic currency interest rates as follows:

a) The foreign currency loan interest rate is determined by adding the average SOFR (Secured Overnight Financing Rate) for a 180-day term over the most recent 36 months at the time of announcing the pricing framework published by the Federal Reserve (website: www.newyorkfed.org) to the bank's fee ratio for arranging the loan at 3%/year;

b) The domestic currency loan interest rate is determined by averaging the annual interest rate for individual customers' deposits in Vietnamese dong for a 12-month term payable at maturity over the five years immediately preceding the pricing framework construction year, as determined on September 30 each year of four commercial banks (Vietnam Joint Stock Commercial Bank for Foreign Trade, Vietnam Joint Stock Commercial Bank for Industry and Trade, Vietnam Joint Stock Commercial Bank for Investment and Development, Vietnam Agricultural and Rural Development Bank or their legitimate successors) plus the service fee ratio of the banks at 3%/year.

4. Expected foreign exchange rate difference arising from repaying foreign currency loans in year N is determined according to financial accounting regulations.

5. Expected revaluation foreign exchange rate difference in year N is determined according to financial accounting regulations.

6. Expected allocation amount in year N of the previously unallocated foreign exchange loss difference is determined according to the regulations of authorized agencies and organizations.

Article 7. Method for Determining Total Permitted Operating and Maintenance Costs for Power Transmission

1. Total permitted operating and maintenance costs for power transmission in year N are determined according to the following formula:

 Where:

a) is the total expected material cost in year N (VND);

b) is the total expected labor cost in year N (VND);

c) is the total expected major repair cost in year N (VND);

d) is the total expected external service cost in year N (VND);

đ) is the total expected other monetary cost in year N (VND).

2. Method for Determining Material Cost

a) Total expected material cost in year N includes material costs within the standard and emergency material costs, specifically as follows:

a1) Standard material costs include: Lubricating oil, machine oil, materials, tools, equipment directly and indirectly related to workshops, testing work, materials for regular maintenance and repair, management, operation, and maintenance of transmission lines, substations, transformers, office work, agency work, and other related costs determined according to the standards set by authorized agencies and organizations;

a2) Emergency material costs are the material costs used for abnormal and objective emergencies as stipulated by law.

b) The total expected material cost in year N is determined by the following formula:

 Where:

b1) is the total expected electricity transmission volume in year N (kWh);

b2) is the standard material cost rate determined according to the regulations of authorized agencies and organizations (VND/kWh);

b3) is the price index for year N determined by averaging the Consumer Price Index (CPI) of the three most recent years prior to the pricing period, excluding years with significant CPI fluctuations (%);

b4) is the expected emergency material cost in year N (VND).

3. Method for Determining Labor Cost

 The total expected labor cost in year N of the Power Transmission Unit includes salary costs and other costs with the nature of salaries, as stipulated by law.

Salary costs for the National Power Transmission Corporation are determined according to laws on labor management, wages, bonuses for workers, and remuneration, fees, and bonuses for managers. Other costs with the nature of salaries for the National Power Transmission Corporation include: safety electricity systems, health insurance, social insurance, unemployment insurance, and trade union funds, as stipulated by relevant laws.

For other Power Transmission Units, the total labor cost is determined according to relevant laws or calculated using the following formula:

Where:

a) NGTS_{N |||} is the expected fixed asset value for power transmission in year N of the Power Transmission Unit (VND);

b) k_nc is the labor cost ratio (%).

4. Method for Determining Major Repair Costs

 Total expected major repair costs in year N include costs for major repair works serving power transmission, determined according to the standards set by authorized agencies and organizations.

5. Method for Determining External Service Costs

a) Total expected external service costs in year N including:

a1) Costs paid to organizations and individuals outside the unit providing services such as electricity, water, telephone, telecommunications, books, audit consulting fees, asset rental fees, asset insurance fees;

 a2) Costs for other services contracted to provide services for management, operation, and maintenance of transmission stations and lines.

b) The total expected external service cost in year N is determined by the following formula:

 Where:

b1) is the total expected electricity transmission volume in year N (kWh);

b2) ĐG_BTK  is the standard external service cost rate determined according to the regulations of authorized agencies and organizations (VND/kWh);

b3) is the price index for year N determined according to point b, Clause 2, Article 2 of this provision (%).

6. Method for Determining Other Monetary Costs

a. Total expected other monetary costs in year N include: other monetary costs within the standard, emergency other monetary costs, taxes, fees, land rent, meal allowance costs, and other costs as stipulated by law;

b. The total other monetary cost in year N is determined by the following formula:

Where:

b1) is the total expected electricity transmission volume in year N (kWh);

b2) ĐG_K is the standard other monetary cost rate determined according to the regulations of authorized agencies and organizations (VND/kWh);

b3) is the price index for year N determined according to point b, Clause 2, Article 2 of this provision (%);

b4) is the emergency other monetary cost in year N (VND);

b5) are taxes, fees, land rent, and other charges in year N (VND);

b6) is the meal allowance cost in year N (VND).

c. Standard other monetary costs in year N include: travel expenses; conference and reception costs; training costs; scientific research, innovation improvement costs; civil defense, security, flood prevention, fire prevention and extinguishing costs; labor protection, working attire, occupational safety, industrial hygiene, and environmental costs; drinking water costs during working hours, night shift allowances, hazardous substance allowances; first aid costs for workplace injuries, common medical expenses, functional recovery for workers, and recruitment costs and other costs as stipulated by law;

d. Emergency other monetary costs in year N are monetary costs used for abnormal and objective emergencies as stipulated by law;

đ) Taxes, fees, land rent, and other charges in year N are determined based on the expected year N;

e. Meal allowance cost in year N is determined according to current regulations.

7. In cases where costs cannot be determined according to the standards specified in Clause 2, Clause 4, Clause 5, and Clause 6 of this Article, the method for calculating total major repair costs and other standard costs (including material costs, external service costs, and other standard monetary costs) is applied using the following formula:

 Where:

a) is the total major repair costs and other standard costs (including material costs, external service costs, and other standard monetary costs) of the Power Transmission Unit (VND);

b) k_scl,k is the ratio of major repair costs and other standard costs (%).

Chapter III

PROCEDURE FOR ESTABLISHING, REVIEWING, AND APPROVING POWER TRANSMISSION SERVICE PRICES

Article 8. Procedures for Approving Electricity Transmission Service Prices

1. Before November 20 each year (year N-1), the Electricity Transmission Unit shall be responsible for establishing the electricity transmission service price for year N, to submit for review by the State Management Agency for Electricity to present to the Minister of Industry and Trade for approval of the electricity transmission service price for year N.

2. The State Management Agency for Electricity shall be responsible for reviewing the price-setting dossier for electricity transmission services within seven working days from the date of receipt of the dossier from the Electricity Transmission Unit. In case the price-setting dossier for electricity transmission services is incomplete or not in compliance with the provisions of Article 9 of this Circular, the Electricity Transmission Unit shall be responsible for completing and supplementing the dossier within five working days from the date of receipt of the request from the State Management Agency for Electricity.

3. The State Management Agency for Electricity shall send the price-setting dossier for electricity transmission services for year N to seek opinions from relevant agencies and units (if any). Relevant agencies and units shall be responsible for submitting their opinions within five working days from the date of receipt of the request from the State Management Agency for Electricity.

4. Within twenty-five days from the date the Electricity Transmission Unit provides complete and valid dossiers in accordance with the provisions of Article 9 of this Circular, the State Management Agency for Electricity shall be responsible for reviewing the price-setting dossier for electricity transmission services and may use consulting services to review the price-setting dossier for electricity transmission services if necessary, to present to the Minister of Industry and Trade for approval of the electricity transmission service price for year N. Within seven working days from the date of submission by the State Management Agency for Electricity, the Minister of Industry and Trade shall approve the electricity transmission service price.

5. During the period when the electricity transmission service price for year N has not been approved, the parties may agree on provisional payment terms in the electricity transmission service contract until the electricity transmission service price for year N is approved. The provisional payment rate shall be equal to the electricity transmission service price for year N-1. Any difference between provisional payments and payments based on the approved electricity transmission service price for the year will be settled later after the electricity transmission service price for year N is approved.

Article 9. Dossier for Electricity Transmission Service Prices

1. Request for Approval of Electricity Transmission Service Prices for Year N.

2. Explanation and calculation tables for electricity transmission service prices for Year N, including:

a. Analysis and evaluation of the estimated implementation of electricity transmission volume indicators, transmission loss ratio, revenue realization situation in Year N-1;

b. Explanation and calculation of allowable profit forecast for Year N of the Electricity Transmission Unit, including:

b1) Shareholders' equity as of June 30, Year N-1;

b2) Expected return on shareholders' equity for Year N.

c. Explanation and calculation of allowable total capital costs for Year N of the Electricity Transmission Unit, including: c1) Total depreciation cost for Year N: Summary table of depreciation of fixed assets for Year N and detailed calculation table of basic depreciation costs by type of fixed asset in Year N;

c2) Total financial cost and exchange rate differences for Year N: Detailed calculation table of financial costs, interest expenses, and exchange rate differences for Year N.

d. Explanation and calculation of allowable total operating and maintenance costs for Year N of the Electricity Transmission Unit, including:

d1) Total material cost for Year N: Explanation and calculation table of material costs for actual implementation in Year N-1 and forecast for Year N as stipulated in Clause 2, Article 7 of this Circular; d2) Total labor cost for Year N: Explanation and calculation table of wage costs as stipulated in Clause 3, Article 7 of this Circular;

d3) Total major repair cost for Year N: Explanation and calculation table of major repair costs in Year N as stipulated in Clause 4, Article 7 of this Circular;

d4) Total external service cost for Year N: Explanation and calculation table of external service costs by categories for actual implementation in Year N-1 and forecast for Year N as stipulated in Clause 5, Article 7 of this Circular;

d5) Total other monetary cost for Year N: Explanation and calculation table of other monetary costs for actual implementation in Year N-1 and forecast for Year N as stipulated in Clause 6, Article 7 of this Circular.

e. Explanation and calculation of allowable total transmission revenue for Year N, clearly separating the allowable total transmission revenue of each Electricity Transmission Unit.

3. Supporting documents, including:

a) List and value of completed investment projects expected to be put into operation by December 31, Year N-1 and Year N (monthly) in line with the National Power Development Plan and the annual expansion plan of the Electricity Transmission Unit;

b) Summary table of workforce in Year N-1 and plan for Year N;

c) Report on the implementation of major repairs of fixed assets in Year N-1 and forecast for Year N;

d) Audited financial statements for Year N-2 conducted by an independent auditing agency: Balance sheet, income statement, cash flow statement, explanatory notes;

e) Standards for various cost components used in the dossier approved by the competent authority.

4. In cases where there is an audited financial report for Year N-1, the figures for Year N-1 specified in Clause 2 of this Article shall be taken from the updated figures in the audited financial report.

5. The dossier for electricity transmission service prices shall be prepared in paper form and electronic message format, which has the same legal effect as a written document according to the law. The Electricity Transmission Unit shall be responsible for directly sending one set of the dossier in electronic message format and one set in paper form (if necessary) to the State Management Agency for Electricity.

4. In cases where there is an audited financial report for year N-1, the figures for year N-1 specified in Clause 2 of this Article shall be taken from the updated figures in the audited financial report.

5. The electricity transmission service pricing dossier shall be established in paper form and in the form of a data message with the same legal effect as a paper document as provided for by law. The electricity transmission entity shall directly submit one set of the dossier in the form of a data message and shall directly submit one set of the dossier in paper form (if necessary) to the State Management Agency for Electricity.

Article 10. Adjustment of Electricity Transmission Service Prices

1. By the end of the third quarter each year, based on the changes in input parameters as stipulated in Clause 3, Article 3 of this Circular, the Electricity Transmission Unit shall be responsible for developing the price adjustment plan for electricity transmission services, and submit the calculation report to the State Management Agency for Electricity for review in accordance with the documentation requirements set out in Clause 5 of this Article.

2. The State Management Agency for Electricity shall be responsible for reviewing the price adjustment plan for electricity transmission services within seven working days. In case the price adjustment plan for electricity transmission services does not comply with the requirements set out in Clause 5 of this Article, the Electricity Transmission Unit shall be responsible for completing and supplementing the plan within five working days from the date of receipt of the request from the State Management Agency for Electricity. The State Management Agency for Electricity shall send the price adjustment plan for electricity transmission services to seek opinions from relevant agencies and units (if any). Relevant agencies and units shall be responsible for submitting their opinions within five working days from the date of receipt of the request from the State Management Agency for Electricity.

3. Within twenty-five days from the date when the Electricity Transmission Unit provides complete and valid documentation as stipulated in Clause 5 of this Article, the State Management Agency for Electricity shall be responsible for reviewing the price adjustment plan for electricity transmission services and may seek consultancy for the review if necessary, and submit the adjusted electricity transmission service price for year N to the Minister of Industry and Trade for approval. The adjusted electricity transmission service price for year N shall be applied in year N+1 after approval.

4. Within seven working days from the date the State Management Agency for Electricity submits the proposal, the Minister of Industry and Trade shall approve the adjusted electricity transmission service price.

5. The documentation for the adjustment of the electricity transmission service price for year N includes:

a) A request for approval of the adjusted electricity transmission service price;

b) An explanation and calculation table of the adjusted electricity transmission service price by the Electricity Transmission Unit based on the input parameters of the electricity transmission service price;

c) Other related documents and texts (if any).

6. The documentation for the adjusted electricity transmission service price shall be prepared in paper form and electronic message format, which has the same legal effect as a paper document according to the law. The Electricity Transmission Unit shall be responsible for directly sending one set of documentation in electronic message format and one set in paper form (if necessary) to the State Management Agency for Electricity.

7. The parties shall reconcile the difference between the payment made under the approved electricity transmission service price for year N and the payment made under the adjusted electricity transmission service price for year N+1 after the adjusted electricity transmission service price for year N is approved, in accordance with the terms of the electricity transmission service contract.

Chapter IV

IMPLEMENTATION

Article 11. Electricity Transmission Service Contract

1. The electricity transmission service contract shall be concluded between the Electricity Transmission Units and the Customers using the transmission grid.

2. The Customer using the transmission grid shall be responsible for paying the transmission cost to the Electricity Transmission Unit in accordance with the signed contract.

Article 12. Responsibilities of Relevant Units

1. The State Management Agency for Electricity shall be responsible for reviewing the annual transmission service fee price and submitting it to the Minister of Industry and Trade for approval.

2. Responsibilities of Transmission Units:

a) Establishing the annual transmission service fee price in accordance with this Circular;

b) Cooperating with authorized units and related power supply and consumption units in negotiating and agreeing on technical design of metering systems, data collection systems serving power supply and consumption, measurement boundaries, and power supply and consumption methods according to the electricity metering regulations issued by the Minister of Industry and Trade to serve as the basis for determining the volume of transmitted electricity;

c) Negotiating and agreeing with Vietnam Electricity Corporation on the transmission service contract in accordance with the law;

d) Building or hiring specialized consultants to build labor cost ratios, major repair cost ratios, and other standard cost figures in calculating the transmission service fee price;

đ) Agreeing with related units on connection points, investment boundaries, and operational management boundaries in compliance with the transmission system regulations issued by the Minister of Industry and Trade;

e) Reporting to the State Management Agency for Electricity on adjustments to reduce the transmission service fee price for year N as stipulated in Clause 3, Article 3 and Article 10 of this Circular within seven working days from the end of year N.

3. Vietnam Electricity Corporation shall be responsible for reviewing and sending comments on the pricing dossier of transmission units when requested by the State Management Agency for Electricity for the Ministry of Industry and Trade to consider and decide.

Article 13. Implementation Provisions

1. This Circular takes effect from February 1, 2025.

2. Abolish the following Circulars:

a) Circular No. 02/2017/TT-BCT dated February 10, 2017, issued by the Minister of Industry and Trade, detailing the method, procedure for establishing, reviewing, and approving the transmission service fee price;

b) Circular No. 14/2022/TT-BCT dated September 30, 2022, issued by the Minister of Industry and Trade, amending and supplementing certain provisions of Circular No. 02/2017/TT-BCT dated February 10, 2017, issued by the Minister of Industry and Trade, detailing the method, procedure for establishing, reviewing, and approving the transmission service fee price.

3. In the course of implementation, if any difficulties arise, relevant units are advised to report to the Ministry of Industry and Trade for consideration and appropriate amendments and supplements./.