Circular No. 17/2012/TT-BCT on electricity selling prices and guidance for implementation

CIRCULAR

Provisions on electricity sale prices and implementation guidance

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

Pursuant to Decree No. 189/2007/NĐ-CP dated December 27, 2007 of the Government stipulating the functions, tasks, powers, and organizational structure of the Ministry of Industry and Trade; Decree No. 44/2011/NĐ-CP dated June 14, 2011 of the Government amending and supplementing Article 3 of Decree No. 189/2007/NĐ-CP;

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 Decision No. 24/2011/QĐ-TTg dated April 15, 2011 of the Prime Minister on adjusting electricity sale prices under the market mechanism;

Pursuant to Decision No. 268/QĐ-TTg dated February 23, 2011 of the Prime Minister on the Retail Electricity Price Schedule applicable from 2011.

The Minister of Industry and Trade issues this Circular stipulating electricity sale prices and implementation guidance as follows:

PART I

GENERAL PROVISIONS

Article 1. Scope of Regulation and Applicability

1. This Circular stipulates detailed retail electricity prices for various customer groups based on the average electricity sale price determined according to the mechanism prescribed in Decision No. 24/2011/QĐ-TTg dated April 15, 2011 of the Prime Minister on adjusting electricity sale prices under the market mechanism, the approved retail electricity price schedule by the Prime Minister, and the wholesale electricity price for retail electricity units purchasing electricity directly from Power Corporations or affiliated power units.

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

3. Electricity sale prices in areas not connected to the national grid shall be approved by the People's Committee of the province after receiving written comments from the Electricity Regulatory Authority.

Article 2. Average Electricity Sale Price

The average electricity sale price is 1,369 VND/kWh (excluding value-added tax), corresponding to the detailed calculation parameters set out in Part A of the Appendix to this Circular.

Article 3. Electricity Sale Prices Based on Voltage Level

1. Electricity sale prices based on voltage level apply to customers using electricity for production, business services, irrigation pumping, administrative and public services, industrial zones, and other purposes in high-rise residential buildings in cities and new urban areas.

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 09:30 (05 hours and 30 minutes);

- From 11:30 to 17:00 (05 hours and 30 minutes);

- From 20:00 to 22:00 (02 hours).

b) Sunday

From 04:00 to 22:00 (18 hours).

2. Peak Hours

a) From Monday to Saturday

- From 09:30 to 11:30 (02 hours);

- From 17:00 to 20:00 (03 hours).

b) Sunday: no peak hours.

3. Off-Peak Hours

All days of the week: from 22:00 to 04:00 the following morning (06 hours).

Article 5. Conditions for Applying Wholesale Electricity Prices

1. The wholesale electricity prices stipulated in Articles 15, 16, and 17 of this Circular shall apply to retail electricity units meeting the following conditions:

a) Possessing a Power Business License in the distribution and retail electricity sectors issued by the competent authority, except for cases exempted from the Power Business License according to 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 power purchase and sale contract and individual metering devices installed for each electricity user as prescribed in Article 24 of the Electricity Law; issuing value-added tax invoices for electricity charges to each electricity user according to the payment periods specified in the power purchase and sale contract, as prescribed by the Ministry of Finance.

2. For retail electricity units that do not meet the conditions stipulated in Clause 1 of this Article, the Wholesale Electricity Supplier shall report to the Department of Industry and Trade for approval by the People's Committee of the province to revoke the Power Business License and transfer the power grid under its management to the Power Company for direct electricity sales to electricity users. During the waiting period for the completion of the handover procedures, the Wholesale Electricity Supplier may apply the tiered residential electricity price for the entire measured electricity consumption at the total meter according to the household usage quota indicated on the latest electricity bill.

Article 6. Guidelines for Implementing Electricity Sales Prices

1. The time of applying the price list: from July 1, 2012.

2. The electricity sales prices stipulated in this Circular do not include value-added tax.

3. Detailed guidelines for implementing the price list are specified in Part B of the Appendix to this Circular.

4. In cases where the average electricity sales price is adjusted according to the provisions of Decision No. 24/2011/QĐ-TTg dated April 15, 2011 of the Prime Minister on adjusting electricity sales prices under the market mechanism and Circular No. 31/2011/TT-BCT dated August 19, 2011 of the Ministry of Industry and Trade on adjusting electricity sales prices based on basic input parameters, the Vietnam Electricity Corporation shall be responsible for adjusting the detailed electricity sales prices for each group of customers.

Chapter II

ELECTRICITY SALES PRICE LIST

Article 7. Retail Electricity Prices for Production Sectors

Retail electricity prices for production sectors are as follows:

Customers purchasing electricity at 20kV voltage level shall be charged according to the price at the voltage level from 22kV to below 110kV.

Article 8. Retail Electricity Prices for Irrigation Pumps

Retail electricity prices for irrigation pumps are as follows:

Article 9. Retail Electricity Prices for Administrative and Public Service Entities

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

Article 10. Retail Electricity Prices for Business Purposes

Retail electricity prices for business purposes are as follows:

Article 11. Retail Electricity Prices for Residential Purposes

1. Tiered retail electricity prices for residential purposes are as follows:

2. The tiered electricity price for the first tier (0 to 50 kWh) only applies to poor households and low-income households that regularly have monthly electricity usage not exceeding 50 kWh and have registered with the electricity supplier. Poor households and low-income households wishing to purchase electricity at the first-tier price must register according to the instructions of the electricity supplier.

3. The price list from the second tier onwards applies to general households and to poor households and low-income households that have registered for electricity usage starting from the 51st kWh.

4. The retail electricity price for residential purposes for temporary and short-term electricity consumers using prepaid cards is 1,807 VND/kWh (price excluding value-added tax).

Article 12. Retail Electricity Prices in Areas Not Connected to the National Grid

1. Retail electricity prices for residential purposes in rural, mountainous, and island areas not connected to the national grid are approved by the provincial People's Committee but must not exceed the ceiling and floor prices as follows:

a) Floor price: 2,054 VND/kWh;

b) Ceiling price: 3,423 VND/kWh.

2. Retail electricity suppliers in rural, mountainous, and island areas not connected to the national grid shall be responsible for developing a pricing plan for electricity sales to customers in these areas on the principle of ensuring commercial viability and clearly identifying the subsidy amount due to selling electricity at the ceiling price but lower than the approved commercial viability price, to be submitted to the Department of Industry and Trade for review, reported, and sent to the Electricity Regulatory Authority for comments in writing to be presented to the provincial People's Committee for annual approval.

Article 13. Retail electricity prices in areas connected to the national power grid that simultaneously have local power generation sources

Electricity retail units in areas connected to the national power grid with local power generation sources that combine local power generation with purchasing electricity from the national power system to sell to electricity consumers shall be responsible for developing a pricing plan for selling electricity to customers in the area to submit to the Electricity Regulatory Authority for review before submitting to the Ministry of Industry and Trade for annual approval. The electricity retail unit shall be responsible for obtaining formal written opinions from the provincial People's Committee on the pricing plan before submitting it for review.

In case the national electricity price is adjusted, the retail electricity price in areas connected to the national power grid with local power generation sources (in industrial zones) will be adjusted correspondingly with the level of adjustment of the average national electricity sales price according to Article 5 of Circular No. 31/2011/TT-BCT dated August 19, 2011 of the Ministry of Industry and Trade on adjusting electricity sales prices based on basic input parameters.

Chapter III

RETAIL ELECTRICITY PRICES

Article 14. Wholesale electricity prices for the Vietnam Power Corporation

1. The wholesale electricity price for the Vietnam Power Corporation from the Vietnam Electricity Group (Electricity Trading Company) at delivery points is determined in accordance with the guidelines of the Ministry of Industry and Trade, consistent with the provisions of Decision No. 24/2011/QD-TTg dated April 15, 2011 of the Prime Minister on adjusting electricity prices under a market mechanism and Circular No. 31/2011/TT-BCT dated August 19, 2011 on adjusting electricity prices based on basic input parameters.

2. The average transmission price calculated at the delivery point corresponding to the volume of electricity transmitted at the delivery point to the distribution network is 83.3 dong/kWh.

Article 15. Wholesale electricity prices for rural areas

1. Determination of the volume of wholesale electricity for rural areas

The wholesale electricity price for rural areas applies to electricity retail units for the volume of wholesale electricity purchased measured at the total meter installed at the transformer station.

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 the Vietnam Power Corporation, Electricity Corporation, or authorized unit under the Vietnam Electricity Group to the rural electricity retail unit.

The principle for determining the quota of electricity usage for households using electricity for residential purposes after the total meter is stipulated in Point b Clause 1 Section IV Part B of the Appendix to this Circular.

3. The wholesale electricity price for other uses (other than residential purposes) at the total meter for purchasing rural wholesale electricity is 1,116 dong/kWh.

Article 16. Wholesale electricity prices for collective housing areas and residential clusters

1. Determination of the volume of wholesale electricity for collective housing areas and residential clusters

The wholesale electricity price for collective housing areas and residential clusters applies to electricity retail units for the volume of wholesale electricity purchased measured at the total meter installed at the transformer station or at the branch point of the low-voltage 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 the Vietnam Power Corporation, Electricity Corporation, or authorized unit to the electricity retail unit for collective housing areas and residential clusters.

The wholesale electricity price for high-rise apartment buildings in cities and new urban areas is as follows:

The principle for determining the quota of electricity usage for households using electricity for residential purposes after the total meter is stipulated in Point b Clause 1 Section V Part B of the Appendix to this Circular.

3. Wholesale electricity prices for other uses in collective housing areas and residential clusters are as follows:

Article 17. Wholesale electricity prices for industrial zones

1. The wholesale electricity price at the 110kV busbar of the 110kV substation for industrial zones shall apply to cases where electricity retailers purchase wholesale electricity at the 110kV busbar of the industrial zone (the 110kV substation invested by the buyer) to sell retail to electricity consumers within the industrial zone, as follows:

2. The wholesale electricity price sold by the Electricity Company to electricity retailers at the medium-voltage busbar of the 110/35-22-10-6kV substation or at the branch point of the medium-voltage line entering the industrial zone shall be set at the retail electricity price for production sectors at the corresponding medium voltage level as stipulated in Article 7 of this Circular minus 2%.

3. The wholesale electricity price sold by the Electricity Company to electricity retailers at the medium-voltage side of low-voltage substations shall be set at the retail electricity price applicable to production sectors at the corresponding medium voltage level as stipulated in Article 7 of this Circular.

Chapter IV

IMPLEMENTATION

Article 18. Inspection Responsibilities

1. The Department of Industry and Trade shall be responsible for inspecting and supervising electricity retailers under its jurisdiction in implementing electricity selling prices as prescribed in this Circular. In case of discovering that units do not meet the conditions specified in Article 5 of this Circular, the Department of Industry and Trade shall take responsibility for suspending the operations of violating organizations, reporting to the Provincial People's Committee to revoke the power operation license issued by the provincial People's Committee, or reporting to the Electricity Regulatory Authority to revoke the power operation license issued by the Electricity Regulatory Authority for direct sale of electricity to end-users by the Electricity Company.

2. The Department of Industry and Trade shall be responsible for inspecting and supervising the implementation of household usage quotas and retail electricity prices at rental housing locations to ensure that tenants are correctly applying the retail electricity prices for residential use as prescribed in this Circular.

Article 19. Effective Date

1. This Circular takes effect from July 1, 2012, replacing Circular No. 42/2011/TT-BCT dated December 19, 2011, of the Ministry of Industry and Trade on electricity selling prices and guidance on their implementation.

2. During the implementation process, if there are any difficulties, relevant units are requested to directly reflect them to the Electricity Regulatory Authority for consideration and resolution within their authority, or report to the Ministry of Industry and Trade for resolution./.