Circular No. 38/2012/TT-BCT on electricity sale prices and implementation guidelines

CIRCULAR

Provisions on electricity sale prices and implementation guidelines

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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 Table applicable from 2011;

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

Chapter 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 structure, and the wholesale electricity price for retail electricity units purchasing electricity directly from State-owned 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 provincial People's Committee after obtaining written comments from the Electricity Regulatory Authority.

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

The average electricity sale price is 1,437 VND/kWh (excluding value-added tax).

a) From Monday to Saturday

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 at 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.

(05 hours and 30 minutes)

- From 11:30 to 17:00

- From 20:00 to 22:00

(02 hours)

b) Sunday From 04:00 to 22:00;

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

2. Peak hours - From 09:30 to 11:30.

- From 17:00 to 20:00

(03 hours) b) Sunday: no peak hours..

3. Off-peak hours

(02 hours)

All days of the week: from 22:00 to 04:00 the following morning - From 09:30 to 11:30;

(06 hours) Article 5. Conditions for Applying Wholesale Electricity Selling Prices.

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

a) Holding a Power Business License in the distribution and retail 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;

c) Having a power purchase and sale contract and individual electricity meter installed for each household user as stipulated in Article 24 of the Electricity Law; issuing VAT invoices for electricity charges to each customer according to the payment period specified in the power purchase and sale contract as prescribed by the Ministry of Finance. (06 hours).

Article 5. Conditions for applying wholesale electricity prices

1. 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 sectors issued by the competent authority, except in 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 unit shall be responsible for reporting to the Department of Industry and Trade for submission to the provincial People's Committee to decide on revoking the Power Business License and transferring the power grid under its management to the Power Corporation to sell electricity directly to electricity users. During the waiting period for the completion of the transfer procedures, the wholesale electricity unit is permitted to 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. Effective date of the pricing schedule: from December 22, 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 the Appendix of this Circular.

4. In case the average electricity sale price is adjusted according to Decision No. 24/2011/QĐ-TTg dated April 15, 2011 of the Prime Minister on adjusting electricity sale 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 sale prices based on basic input parameters, the Vietnam Electricity Corporation shall be responsible for adjusting detailed electricity sale prices for various customer groups.

Chapter II

ELECTRICITY RETAIL PRICE LIST

Article 7. Retail Electricity Price for Production Sectors

The retail electricity price for production sectors is as follows:

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

Article 8. Retail Electricity Price for Irrigation Pumping

The retail electricity price for irrigation pumping is as follows:

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

The retail electricity price for administrative and public service entities is as follows:

Article 10. Retail Electricity Price for Business Purposes

The retail electricity price for business purposes is as follows:

Article 11. Retail Electricity Price for Domestic Use

1. The tiered retail electricity price for domestic use is as follows:

2. The price for the first tier (0-50 kWh) applies only to poor households and low-income households with a consistent monthly electricity usage of no more than 50 kWh and 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 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 purchases using prepaid cards is: 1,902 VND/kWh (excluding value-added tax).

Article 12. Retail Electricity Price 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 shall be approved by the provincial People's Committee but shall not exceed the ceiling and floor prices as follows:

a) Floor price: 2,156 VND/kWh;

b) Ceiling price: 3,593 VND/kWh.

2. Retail electricity units 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 profitability and clearly identifying the subsidy amount due to selling electricity at the ceiling price but lower than the approved profitability level, to be submitted to the Department of Industry and Trade for review and reported to the Electricity Regulatory Authority for written comments to be submitted 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

Retail electricity units in areas connected to the national grid with local power generation combined with power purchase from the national power system to sell electricity to customers shall be responsible for developing a pricing plan for electricity sales to customers in these areas to be submitted to the Department of Industry and Trade for review and reported to the Electricity Regulatory Authority for written comments to be submitted to the provincial People's Committee for annual approval.

Chapter III

RETAIL ELECTRICITY PRICES

Article 14. Wholesale electricity prices for the Power Corporation

1. The wholesale electricity selling price for the Electricity Corporation from the Vietnam Electricity Group (Electricity Trading Company) at delivery points shall be determined in accordance with the guidance of the Ministry of Industry and Trade, in compliance with the provisions of Decision No. 24/2011/QD-TTg dated April 15, 2011 of the Government on adjusting electricity selling prices according to market mechanisms and Circular No. 31/2011/TT-BCT dated August 19, 2011 stipulating adjustments to electricity selling prices based on basic input parameters.

2. The average transmission price at the delivery point corresponding to the volume of electricity transmitted to the distribution network at the delivery point is VND 83.3 per kWh. The average transmission price will be adjusted in accordance with the provisions of Decision No. 24/2011/QD-TTg dated April 15, 2011 of the Government on adjusting electricity selling prices according to market mechanisms and the guiding documents of the Ministry of Industry and Trade.

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 purchasing wholesale electricity measured by total metering devices installed at transformer stations.

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

The wholesale electricity selling price for rural residential use is the price sold at the total meter by the Electricity Corporation, Power Company, or authorized unit under the Vietnam Electricity Group when selling to retail electricity suppliers in rural areas.

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

3. The wholesale electricity selling price for purposes other than residential use (at the total meter for purchasing wholesale rural electricity) is VND 1,172 per kWh.

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

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

The wholesale electricity selling price for collective housing, community clusters applies to units selling electricity for the measured volume of electricity purchased wholesale 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 clusters of residents are as follows:

The wholesale electricity price for residential use in collective housing areas and clusters of residents is the price at the total meter set by the Power Corporation, Electricity Corporation, or authorized units when selling to electricity retail units in collective housing areas and clusters of residents.

Wholesale electricity prices for high-rise apartment buildings in cities and new urban areas are as follows:

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

3. Wholesale electricity prices for purposes other than residential use in collective housing areas and clusters of residents are as follows:

Article 17. Wholesale electricity prices for industrial zones

1. The wholesale electricity selling price at the 110kV busbar of the 110kV substation in the industrial zone applies to cases where retail electricity suppliers purchase wholesale electricity at the 110kV busbar of the industrial zone (the 110kV substation invested by the buyer) to sell to electricity users within the industrial zone and is defined as follows:

2. The wholesale electricity selling price by the Power Company for selling to retail electricity suppliers 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 is set at the retail electricity price for production sectors at the corresponding medium voltage level as prescribed in Article 7 of this Circular minus 2%.

3. The wholesale electricity selling price by the Power Company for selling to retail electricity suppliers at the medium voltage side of the low-voltage substation is set at the retail electricity price applicable for production sectors at the corresponding medium voltage level as prescribed in Article 7 of this Circular.

Chapter IV

IMPLEMENTATION

Article 18. Responsibility for inspection

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

2. The Department of Industry and Trade is responsible for inspecting and supervising the implementation of household usage standards 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 December 22, 2012; replacing Circular No. 17/2012/TT-BCT dated June 29, 2012 of the Ministry of Industry and Trade on electricity selling prices and guidance on implementation.

2. During the implementation period, 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./.