Circular No. 26/2024/TT-BCT on the method for establishing the wholesale electricity price framework

PART I

GENERAL PROVISIONS

Article 1. Scope of Regulation and Applicability

1. This Circular stipulates the method for establishing the framework price for wholesale electricity sales, the wholesale electricity price, and the model wholesale electricity purchase contract of the Electricity Corporation of Vietnam.

2. This Circular applies to the Vietnam Electricity Group; Electricity Corporations; organizations and individuals related thereto.

Article 2. Interpretation of Terms

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1. Framework price for wholesale electricity is the average selling price frame of the Vietnam Electricity Group when selling electricity to each Electricity Corporation, excluding value-added tax, and is determined based on the minimum average wholesale electricity price (VND/kWh) and the maximum average wholesale electricity price (VND/kWh).

2. Wholesale electricity priceis the price at which the Vietnam Electricity Group sells electricity to Electricity Corporations for resale to electricity consumers.

3. Electricity commercial product volume of the Electricity Corporation is the electricity volume (including electricity commercial product volume sold in areas not connected to the national power grid) that the Electricity Corporation sells to electricity consumers and to retail electricity units.

4. Electricity Corporation are member Electricity Corporations of the Vietnam Electricity Group, including the Northern Electricity Corporation, Southern Electricity Corporation, Central Electricity Corporation, Hanoi Electricity Corporation, and Ho Chi Minh City Electricity Corporation.

5. Year N is the Gregorian calendar year from January 1 to December 31 of the year the price framework and price apply.

6. Year N-1 is the Gregorian calendar year immediately preceding Year N |||.

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

Chapter II

METHOD FOR DETERMINING THE FRAMEWORK PRICE FOR WHOLESALE ELECTRICITY

Article 3. Method for determining the framework price for wholesale electricity

The wholesale electricity price within the Vietnam Electricity Group's wholesale electricity price framework when selling to Electricity Corporations in the year N |||is determined according to the following formula:

Where:

g_TCTDLi,k,Nis the wholesale electricity price within the Vietnam Electricity Group's wholesale electricity price framework when selling to Electricity Corporation i in the year i(VND/kWh); N |||TD

is the total expected revenue of Electricity Corporation i in the year_i,k,N(VND), determined based on electricity sales revenue and other revenues as prescribed (if applicable). Among which, electricity sales revenue is determined according to: N |||- The expected electricity commercial product volume determined based on annual electricity production volume according to two scenarios: low scenario with electricity production volume equal to 90% of the base scenario volume, high scenario with electricity production volume equal to 110% of the base scenario volume; wherein, the base scenario volume is the expected electricity commercial product volume of the year

at the time of calculation. N |||- The structure of electricity commercial product volume for different customer groups.

- The current retail electricity price as prescribed by the Ministry of Industry and Trade.

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C_{i,Nis the total distribution-retail electricity cost of Electricity Corporation i in the year}(VND) determined according to Clause 4 of this Circular; N |||is the standard profit of Electricity Corporation i in the year

LN_{is the total distribution-retail electricity cost of Electricity Corporation i in the year}(VND) determined according to Clause 5 of this Circular; N |||: is the expected electricity purchase cost through the spot market and power purchase contracts (of allocated power plants and power plants directly signing power purchase contracts with Electricity Corporation i) in the year

according to the competitive wholesale electricity market operation regulations issued by the Minister of Industry and Trade (VND); N |||is the expected electricity purchase cost from power plants, power generation units signing power purchase contracts with Electricity Corporation i during non-participation in the competitive electricity market, and the cost of purchasing rooftop solar power of Electricity Corporation i in the year

according to contracts complying with the provisions of the law (VND); N |||,N

A_GNi_{is the expected primary electricity received by Electricity Corporation i in the year}(kWh); N |||: is the expected direct electricity purchase volume through the spot market from allocated power plants and power plants directly signing power purchase contracts with Electricity Corporation i in the year

according to the competitive wholesale electricity market operation regulations issued by the Ministry of Industry and Trade (kWh); N |||is the expected electricity purchase volume from power plants, power generation units signing power purchase contracts with Electricity Corporation i during non-participation in the competitive electricity market, and the cost of purchasing rooftop solar power of Electricity Corporation i in the year

according to contracts complying with the provisions of the law (kWh); N |||in accordance with the contract in compliance with the provisions of the law (kWh);

Article 4. Principles for determining distribution-retail electricity costs

Distribution-retail electricity costs for the year of the Electricity Corporation N |||= ∑(CVL

VL,i,N_TL,i,N ĐMT_KH,i,N ĐMT_SCL,i,N ĐMT_MN,i,N ĐMT_BTK,i,N ĐMT_TC,i,N ĐMT_{+ C} +

PTKH,i,N_CT,i,N ĐMT_TXS,i,N ĐMT_{+ GT)} is the total material cost for the year

Where:

C_{KHis the total distribution-retail electricity cost of Electricity Corporation i in the year}(VND), determined based on the quota issued by the competent authority; N |||is the total labor cost for the year

C_{TLis the total distribution-retail electricity cost of Electricity Corporation i in the year}(VND), including the total labor cost and other costs with the nature of wages such as health insurance, social insurance, unemployment insurance, and trade union fees, as stipulated by relevant laws; N |||is the total depreciation cost of fixed assets for the year

C_{SCLis the total distribution-retail electricity cost of Electricity Corporation i in the year}(VND), determined according to the regulations on management, use, and depreciation of fixed assets by the Ministry of Finance or the competent authority; N |||is the total major repair cost for the year

C_{MNis the total distribution-retail electricity cost of Electricity Corporation i in the year}(VND), determined based on the major repair plan according to the quota issued by the competent authority; N |||is the total external service purchase cost for the year

C_{BTKis the total distribution-retail electricity cost of Electricity Corporation i in the year}(VND), including costs according to quotas and costs outside quotas. Costs according to quotas are determined based on the quotas issued by the competent authority. Costs outside quotas are determined according to current regulations and reasonable additional costs expected for the year N |||is the total other monetary cost for the year N |||;

C_{+ GT + LNis the total distribution-retail electricity cost of Electricity Corporation i in the year}is the total financial cost for the year N |||is the total other monetary cost for the year N |||;

C_{Economic life of the power plant as specified in the Appendix attached to this Circular (years).is the total distribution-retail electricity cost of Electricity Corporation i in the year}(VND), including: total interest expense, bond expenses, financial leasing expenses, and fees for borrowing funds payable within the year N |||, determined according to contracts and legal documents, and estimated borrowings to serve production and business activities for the year N |||is determined according to financial accounting regulations; N |||h) GT: Reductions from cost of goods sold (VND); N |||PTKH

C_{is the customer development, customer care, and communication cost for the yearis the total distribution-retail electricity cost of Electricity Corporation i in the year}(VND), determined based on the quotas issued by the competent authority; N |||CT

C_{is the metering cost for the yearis the total distribution-retail electricity cost of Electricity Corporation i in the year}(VND), determined according to the quotas issued by the competent authority; N |||TSX

C_{is the self-production cost for the yearis the total distribution-retail electricity cost of Electricity Corporation i in the year}(VND), including power supply costs and related distribution and retail electricity costs for islands, border areas, mountainous regions, and rural areas not yet connected to the national power grid (if applicable); N |||GT includes cost reduction items, including rental income from utility poles, proceeds from the sale of surplus fixed assets (VND).

Article 5. Principles for determining the standard profit of the Electricity Corporation

The allowable profit forecast for the year

of Electricity Corporation i is determined according to the following formula: N ||| Shareholders' equity at December 31 (or September 30 if there is no data for December 31) of the year

Where:

The wholesale price of electricity sold by Vietnam Electricity Corporation to Electricity Corporation

for the year is the wholesale price of electricity sold by Vietnam Electricity Corporation to Electricity Corporation N |||is determined according to the following formula:

Where:

g_{TCTDLis the total distribution-retail electricity cost of Electricity Corporation i in the year}is the total revenue forecast of Electricity Corporation i (VND) determined based on electricity sales revenue and other revenues as prescribed (if any). Among which, electricity sales revenue is determined according to: i(VND/kWh); N |||TD

is the total expected revenue of Electricity Corporation i in the year_{is the total distribution-retail electricity cost of Electricity Corporation i in the year}- The expected commercial electricity consumption, determined based on annual electricity production according to the base plan; where the base plan's electricity consumption is the expected commercial electricity consumption for the year

- The expected commercial electricity consumption determined based on annual electricity production according to the base plan; wherein, the base plan's electricity consumption is the expected commercial electricity consumption for the year N |||- The structure of electricity commercial product volume for different customer groups.

- The current retail electricity price as prescribed by the Ministry of Industry and Trade.

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Article 7. Documents for calculating the electricity wholesale price framework 1. Explanation of the basis for establishing the electricity wholesale price framework for year

2. Explanation and calculation tables of the electricity wholesale price framework for year N |||.

N, including: a) Report on evaluating the implementation of electricity sales volume indicators, power loss ratio, revenue realization, costs, profit, and owner's equity up to December 31 (or September 30 if December 31 data is not available) of year b) Explanation and calculation of cost components and profit of Electricity Corporation i, including:

- Consolidated distribution-retail electricity cost table of the Electricity Corporation. N-1- Depreciation calculation table for existing fixed assets in year N-1.

including: consolidated basic depreciation value of fixed assets recorded in books up to December 31 of year

; Original value of new fixed assets in year

and projected depreciation of new fixed assets in year N |||; Projected new fixed assets in year N according to the list of energized projects (including investment total amount, temporary asset increase, expected energization time, projected depreciation expense for year N-1- Interest expense calculation table for planned year N |||based on credit contracts. N |||- Exchange rate difference expense estimate table for year N |||).

- Labor movement summary table for distribution-retail electricity activities in year N |||N-, planned average labor for distribution-retail electricity activities in year

and planned wage and welfare expenses for distribution-retail electricity activities in year N |||.

- Estimated plan cost and revenue table in areas not connected to the national grid (if applicable). - Estimated cost table for purchasing rooftop solar power in year1- Owner's equity at December 31 (or September 30 if December 31 data is not available) of year N |||(VND). N |||.

c) Explanation and calculation of major repair costs, material costs, external service costs, other monetary costs, customer development costs, customer care and communication costs, metering costs.

d) Explanation and calculation table of electricity purchase costs from the electricity market of Electricity Corporation i in year N |||.

- Explanation of input parameters for simulating electricity purchase costs from the electricity market, including: Forecast load for year N-1; General market electricity data for year

: electricity price, capacity price, loss factor; Data of power plants with allocated contracts and power plants directly contracted with Electricity Corporation in year

: contract price, contract volume, planned volume; N |||including:

- Calculation table of electricity purchase costs from the electricity market of Electricity Corporation i in year N |||e) Explanation and calculation table of tax and fee items for power plants directly contracted with Electricity Corporation in year N |||- Explanation of environmental protection costs for industrial wastewater, environmental protection fees for cooling water, resource taxes, water resource exploitation rights fees, forest environmental services, and related costs; N |||- Calculation table of tax and fee allocation for power plants directly contracted with Electricity Corporation in year

3. Attached documents, including: N |||.

a) Audited financial report for year N |||including:

conducted by an independent auditing agency: Balance sheet, income statement, cash flow statement, explanatory notes;

b) Cost component standards approved by the competent authority. N |||.

3. The accompanying documents include:

a) Annual financial report , excluding abnormal one-off costs in year audited by an independent auditing agency: Balance sheet, income statement, cash flow statement, notes to the financial statements;

b) Cost component standards used in the dossier approved by the competent authority.

Article 8. Documents for calculating the adjusted wholesale electricity price framework

1. The proposal on the construction of the adjusted wholesale electricity price framework for the year N |||.

2. Explanations and calculation tables of the adjusted wholesale electricity price framework for the year a) Report on evaluating the implementation of electricity sales volume indicators, power loss ratio, revenue realization, costs, profit, and owner's equity up to December 31 (or September 30 if December 31 data is not available) of year b) Explanation and calculation of cost components and profit of Electricity Corporation i, including:

a) Report on the assessment of the implementation of electricity sales volume indicators, electricity loss ratio, revenue situation, costs, profits, and estimated owner's equity for the year N |||;

b) Explanations and calculation tables of cost components and profits of the Electricity Corporation within the adjusted wholesale electricity price framework according to the categories specified in Articles 3, 4, and 5 of this Circular;

c) Supporting documents and evidence.

CfragranceIII

WHOLESALE ELECTRICITY PURCHASE CONTRACT

Article 9. Model Wholesale Electricity Purchase Contract

1. The model wholesale electricity purchase contract prescribed in the Appendix attached to this Circular serves as the basis for the Seller and Buyer to negotiate and sign. The Seller and Buyer have the right to agree and supplement specific terms in the model wholesale electricity purchase contract in accordance with the provisions of the law.

2. The Vietnam Electricity Corporation has the responsibility to report to the Electricity Regulatory Authority for inspection of the wholesale electricity purchase contracts after the negotiation and signing of the wholesale electricity purchase contracts in accordance with the provisions of the law.

Chapter IV

IMPLEMENTING PROVISIONS

Article 10. Responsibilities of Related Units

1. The Electricity Regulatory Authority is responsible for reviewing the annual wholesale electricity price framework and submitting it to the Minister of Industry and Trade for approval; inspecting wholesale electricity purchase contracts.

2. The Vietnam Electricity Corporation is responsible for calculating and reporting the annual wholesale electricity price framework of the Vietnam Electricity Corporation sold to Electricity Corporations, directing Electricity Corporations to establish data sets for constructing the wholesale electricity price framework in accordance with the provisions of this Circular.

3. Electricity Corporations are responsible for establishing annual data sets for constructing the wholesale electricity price framework to be reported to the Vietnam Electricity Corporation for submission to the Electricity Regulatory Authority in accordance with the provisions of this Circular.

4. System operation units and electricity market units are responsible for simulating the cost of purchasing electricity from the electricity market for Electricity Corporations to serve the calculation of the wholesale electricity price framework.

5. In cases where it is necessary to adjust the average wholesale electricity price framework to align with fluctuations in production and business costs, electricity purchase costs from the electricity market, electricity purchase costs from power plants that directly sign electricity purchase and sale contracts with Electricity Corporations, and the predetermined revenue and profit levels of Electricity Corporations, the Vietnam Electricity Corporation is responsible for calculating and reporting to the Ministry of Industry and Trade for consideration and decision-making.

6. The Vietnam Electricity Corporation and Electricity Corporations are responsible for negotiating wholesale electricity purchase contracts in accordance with this Circular, ensuring the accuracy, reasonableness, and validity of the provided data and documents; agreeing to report to the Electricity Regulatory Authority for inspection of electricity purchase and sale contracts in accordance with the provisions.

Article 11.  Effectiveness

1. This Circular takes effect from December 30, 2024.

2. During the implementation process, if any difficulties arise, the relevant units are requested to reflect them to the Ministry of Industry and Trade for supplementation and amendment as appropriate./.