Circular No. 24/2018/TT-BCT stipulates the method for determining the price of public goods and services in the electricity supply sector for remote, border, and island areas implemented through the State's procurement using central government budget funds.

 

 

CIRCULAR

Regulations on the method for determining the price of products and public services in the field of electricity supply to remote areas, border regions, islands using central government budget funds under the state procurement method.

Regulations on the method for determining the price of products and public services in the field of electricity supply to remote areas, border regions, islands using central government budget funds under the state procurement method.

 

 

 

Based on Decree No. 98/2017/NĐ-CP dated August 18 August 2017 /NĐ-CP dated March

Pursuant to the Electricity Law dated December 3, 2004 and the Law Amending and Supplementing Certain Provisions of the Electricity Law dated November 20, 2012;

On the basis of Decree No. 130/2013/NĐ-CP dated October 16, 2013 of the Government on production and supply of public goods and services.

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

The Minister of Industry and Trade issues this Circular to provide guidance on method for determining the price of products and public services in the field of electricity supply to remote areas, border regions, islands using central government budget funds under the state procurement method..

Article 1. Scope of Regulation

This Circular stipulates the method for determining the price of products and public services in the field of electricity supply to remote areas, border regions, islands using central government budget funds under the state procurement method as prescribed in Decree No. 130/2013/NĐ-CP dated October 16, 2013 of the Government on production and supply of public goods and services.

Article 2. Applicability

This Circular applies to the Vietnam Electricity Corporation, the Electricity Corporation and organizations and individuals related to the production and supply of public goods and services in the field of electricity supply to remote areas, border regions, islands using central government budget funds under the state procurement method.

Article 3. Principles for Determining Prices

The price of public goods and services for electricity supply to remote areas, border regions, islands (hereinafter referred to as the price of public goods and services for electricity supply) shall be determined based on the following principles:

1. Covering actual reasonable and legitimate costs to complete the provision of electricity to remote areas, border regions, islands according to the quality of electric power issued by the competent authority.

2. Not including in the price of public goods and services for electricity supply costs that have been guaranteed by the state budget.

3. Applying current economic and technical norms and cost standards decided by competent authorities and organizations.

Article 4. Structure and Method for Determining the Price of Public Goods and Services for Electricity Supply

1. The structure of the price of public goods and services for electricity supply implemented through the state procurement method for units includes:

a) Generation, transmission costs and industry operation and management costs;

b) Loss of electric energy costs for electricity supply activities in remote areas, border regions, islands;

c) Distribution and retail electricity costs to supply electricity to remote areas, border regions, islands.

2. The method for determining the price of public goods and services for electricity supply at Clause 1 of this Article is carried out as follows:

a) Determining the cost of purchasing electricity in public areas

The cost of purchasing electricity in public areas is calculated according to the following formula:

CPMĐ = SL x G

Where:

CPMĐ: Cost of purchasing electricity;

SL: Quantity of purchased electricity;

G: Selling price of electricity for supplying electricity to public areas.

b) Allocation of fixed asset depreciation costs in public areas

- For low-voltage distribution networks: Calculating fixed asset depreciation costs based on the original value and remaining value of the actual low-voltage distribution network assets of each public area.

- For medium-voltage networks:

+ Lines: As medium-voltage lines run across multiple adjacent public areas, the depreciation cost of medium-voltage lines will be allocated to each public area according to the percentage of the number of kilometers of lines running within each public area.

The allocation ratio is as follows:

Node n

Node 1

Node 2

L1

L2

Ln

MBA

Formula:

An = A x Ln/L

Where:

L = L₁+L₂+...+L_{For power plants invested under the Build-Operate-Transfer (BOT) model, n is determined according to the operational period of the power plant stipulated in the BOT contract.}

n: The nth load node of the line;

A: Depreciation cost of the line (in dong);

A_{For power plants invested under the Build-Operate-Transfer (BOT) model, n is determined according to the operational period of the power plant stipulated in the BOT contract.}: Depreciation cost allocated to the nth load node (in dong);

L: Total length of the line from the intermediate transformer or 110kV transformer to each node along the entire line (in km);

L_{For power plants invested under the Build-Operate-Transfer (BOT) model, n is determined according to the operational period of the power plant stipulated in the BOT contract.}: Length from the intermediate transformer or 110kV transformer to the nth load node (in km).

+ Intermediate substation: Allocated to each load according to installed capacity.

Formula:

K_{For power plants invested under the Build-Operate-Transfer (BOT) model, n is determined according to the operational period of the power plant stipulated in the BOT contract.}= (S_{For power plants invested under the Build-Operate-Transfer (BOT) model, n is determined according to the operational period of the power plant stipulated in the BOT contract.}/S) x K

Where:

n: The nth load node of the line;

K: Depreciation cost of the intermediate substation (in dong);

K_{For power plants invested under the Build-Operate-Transfer (BOT) model, n is determined according to the operational period of the power plant stipulated in the BOT contract.}: Depreciation cost of the intermediate substation allocated to the nth load node (in dong);

S: Total installed capacity of loads supplied by the substation (kVA);

Provincial People's Committees set specific prices_{For power plants invested under the Build-Operate-Transfer (BOT) model, n is determined according to the operational period of the power plant stipulated in the BOT contract.}: Installed capacity of the nth load node (kVA).

- Other fixed asset depreciation costs:

For other assets such as buildings, structures, transportation means, and other assets, the fixed asset depreciation costs are allocated to each public area according to the ratio of line and substation depreciation costs (as calculated in Point b Clause 2 of this Article) compared to total depreciation costs.

c) Allocation of labor costs in public areas

Labor costs include wages, wage-related deductions, and meal allowances and are determined as follows:

- Direct labor costs: Based on actual labor costs in public areas.

- Management labor costs: Allocated to each public area according to the ratio of direct labor costs.

d) Allocation of costs: Fuel, material costs, major repair costs, interest expenses, exchange rate differences in public areas.

Based on fuel, material costs, major repair costs, interest expenses, and exchange rate differences, these cost items are calculated and allocated to each public area according to the ratio of fixed asset depreciation costs of each public area (as calculated in Point b Clause 2 of this Article) compared to total depreciation costs.

đ) Allocation of costs: External service costs, other monetary costs, customer development costs in public areas

Based on external service costs, other monetary costs, and customer development costs, these cost items are calculated and allocated to each public area according to the number of customers in each public area compared to the total number of customers.

Article 5. Method of supplying public utility products and services for electricity provision

Public utility products and services for electricity provision to remote, mountainous, border, and island areas shall be carried out through the method of the State ordering using central government budget funds as decided by the Ministry of Industry and Trade.

Article 6. Authority to decide on pricing

The decision on pricing of public utility products and services for electricity provision to remote, mountainous, border, and island areas shall be implemented by the Ministry of Industry and Trade after the state budget expenditure plan has been assigned by the Ministry of Finance to the Ministry of Industry and Trade.

Article 7. Rights and responsibilities of units

1. Electricity Regulatory Authority

a) Direct relevant units to establish and manage prices of public utility products and services for electricity provision as stipulated in this Circular and related laws;

b) Inspect the implementation of prices of public utility products and services for electricity provision according to this Circular and other relevant legal provisions.

2. Vietnam Electricity Corporation

a) Determine the list of areas for providing public utility electricity based on criteria specified in legal regulations issued by competent state agencies regarding remote, mountainous, border, and island areas;

b) Establish prices of public utility products and services for electricity provision as stipulated in this Circular;

c) Develop economic and technical norms when necessary as a basis for establishing prices of public utility products and services.

Article 8. Implementation organization

This Circular takes effect from October 9, 2018.

In the course of implementation, if there are difficulties, relevant units shall 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./.