Circular No. 51/2015/TT-BCT amending and supplementing certain articles of Circular No. 30/2014/TT-BCT dated October 2, 2014, issued by the Minister of Industry and Trade on the operation of competitive power generation market and Circular No. 56/2014/TT-BCT dated December 29, 2014, issued by the Minister of Industry and Trade on the method for determining power generation prices and procedures for inspecting power purchase and sale contracts.

MINISTRY OF INDUSTRY AND TRADE --------	SOCIALIST REPUBLIC OF VIET NAM Independence - Freedom - Happiness ---------------
Number: 51/2015/TT-BCT	Hanoi, December 29, 2015

CIRCULAR

AMENDMENTS AND SUPPLEMENTS TO CERTAIN ARTICLES OF CIRCULAR NUMBER 30/2014/TT-BCT DATED OCTOBER 2, 2014 ISSUED BY THE MINISTER OF INDUSTRY AND TRADE REGULATING THE OPERATION OF THE COMPETITIVE POWER GENERATION MARKET AND CIRCULAR NUMBER 56/2014/TT-BCT DATED DECEMBER 29, 2014 ISSUED BY THE MINISTER OF INDUSTRY AND TRADE REGULATING THE METHOD FOR DETERMINING POWER GENERATION PRICES AND PROCEDURES FOR INSPECTING ELECTRICITY PURCHASE AND SALE CONTRACTS

Pursuant to Decree No. 95/2012/NĐ-CP dated November 12, 2012, of the Government, detailing the functions, tasks, powers, and organizational structure of the Ministry of Industry and Trade;

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;

Pursuant to Decision No. 63/2013/QD-TTg dated November 8, 2013 of the Prime Minister stipulating the roadmap, conditions, and power industry structure for forming and developing various levels of electricity markets in Vietnam;

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

The Minister of Industry and Trade issues this Circular amending and supplementing certain articles of Circular No. 30/2014/TT-BCT dated October 2, 2014 issued by the Minister of Industry and Trade regulating the operation of the competitive power generation market and Circular No. 56/2014/TT-BCT dated December 29, 2014 issued by the Minister of Industry and Trade regulating the method for determining power generation prices and procedures for inspecting electricity purchase and sale contracts.

Article 1.

Amending and supplementing some articles of Circular No.

Circular No. 30/2014/TT-BCT dated October 2, 2014 issued by the Minister of Industry and Trade regulating the operation of the competitive power generation market is amended as follows:

1. Amending Clause 3, adding Clause 3a after Clause 3 of Article 4 as follows: "3. Power plants not participating in the electricity market include:

a) BOT power plants (having signed contracts or completed principle contract agreements);

b) Renewable energy power plants, except hydropower plants;

c) Gas turbine power plants with constraints requiring the maximum use of gas fuel to ensure national interests;

d) Industrial zone power plants that only sell part of their production to the national power grid and have signed electricity purchase and sale contracts before January 1, 2016, which remain valid beyond January 1, 2016."

3a. BOT power plants not falling under the provisions of Point a Clause 3 of this Article, and industrial zone power plants that only sell part of their production to the national power grid not falling under the provisions of Point d Clause 3 of this Article shall be responsible for preparing infrastructure in accordance with Clause 5 of this Article and participating in the electricity market in accordance with Clause 1 of this Article."

2. Adding Clause 1a after Clause 1, amending Clause 3 of Article 5 as follows:

 "1a. Power generation units shall submit registration forms to participate in the electricity market for each power plant to the Electricity Regulatory Authority via one of the following methods:

a) Online registration at the following address:

http://thamgiathitruongdien.dvctt.gov.vn;

b) By mail;

c) Directly at the office of the Electricity Regulatory Authority.

3. Number of registration forms

a) One set for online registration;

b) Two sets for registration by mail or direct submission at the office of the Electricity Regulatory Authority."

3. Repeals Clause 1, amending Clause 2, Clause 3 of Article 6 as follows:

 "2. The Electricity Regulatory Authority shall accept registration forms, check completeness, and provide guidance for supplementation immediately upon receipt of directly submitted forms or within two working days from the date of receipt of forms submitted by mail or online.

3. Within two working days from the date of receiving complete forms, the Electricity Regulatory Authority shall send one set of forms (by email or online) to the System Operation and Market Operator."

4. Amending Point b Clause 5 of Article 6 as follows:

 "b) In case the form is not valid:

- The Electricity Regulatory Authority shall send an online message or mail to the power generation unit specifying the invalidity of the form and requesting the power generation unit to explain and complete the form;

- Within five working days from the date the power generation unit receives the request, the power generation unit shall submit an explanation and completed form to the Electricity Regulatory Authority either directly, online, or by mail;

- Within three working days from the date of receiving the completed form from the power generation unit, the Electricity Regulatory Authority shall organize the evaluation of the form according to the provisions of this clause."

5. Amending Clause 1 of Article 11 as follows:

 "1. Water value used to determine the price limit for hydropower units in the electricity market."

6. Amending Point b Clause 5, adding Clause 6 of Article 15 as follows:

 "b) The percentage of electricity output paid according to the contract price is specified for power plants based on technology type (hydropower, thermal power). This percentage shall not exceed 95% and shall not be less than 60%, except for cases stipulated in Clause 6 of this Article.

6. For the percentage of electricity output paid according to the contract price of BOT power plants and industrial zone power plants that only sell part of their output to the national power grid, the Electricity Regulatory Authority shall report to the Ministry of Industry and Trade for consideration and decision on the percentage of output for power plants specified in this clause."

7. Amending Point a Clause 3 of Article 17 as follows:

 "a) In case the heat rate can be determined, the variable cost component of the unit is calculated as follows:

Where:

: Adjustable variable cost component adjusted according to fluctuations in the main fuel cost (coal, gas) of the power plant (VND/kWh);

: Adjustable variable cost component adjusted according to fluctuations in auxiliary fuel cost (oil) of the power plant (VND/kWh);

: Adjustable variable cost component adjusted according to other fluctuations of the power plant (VND/kWh).

- Adjustable variable cost component adjusted according to fluctuations in the main fuel cost of the power plant  (VND/kWh), calculated as follows:

Where:

: - Average heat rate of the main fuel agreed upon by both parties based on equipment manufacturer specifications and corresponding to the load level specified in Appendix 1 of Circular No. 56/2014/TT-BCT dated December 29, 2014 issued by the Minister of Industry and Trade regulating the method for determining power generation prices and procedures for inspecting electricity purchase and sale contracts;

: Main fuel price is defined as follows:

- For domestic coal fuel: The price of coal is the price at the loading point of the coal supplier, including losses, management fees, insurance (if any), but excluding transportation costs (VND/ton). In cases where the coal purchase and sale contract cannot separate transportation costs, the fuel price is determined based on the price in the coal purchase and sale contract (VND/ton);

- For imported coal fuel: The price of coal is the price at the exporting port (VND/ton);

- For gas fuel: The price of gas is the price at the gas field (VND/BTU).

- The variable price component adjusts according to changes in the cost of auxiliary fuel for power plants (VND/kWh), determined by the following formula: (VND/kWh), determined by the following formula:

Where:

: The average specific fuel consumption rate of auxiliary fuel (oil), agreed upon by both parties based on the manufacturer's equipment specifications (kg/kWh);

: The price of auxiliary fuel (oil) including transportation costs and other fees as prescribed (VND/kg).

- The average specific fuel consumption rate of fuel (primary, auxiliary) provided by the sole bulk buyer and adjusted according to the efficiency decay factor. If the heat rate in the contract is the average lifetime project heat rate, it will not be adjusted according to the efficiency decay factor. In cases where the contract or negotiation documentation only has characteristic curves at various load levels, the heat rate of the units is determined at the load level corresponding to the average annual electricity generation specified in the power purchase agreement.

In cases where thermal power plants do not have heat rate data in the contract or in the negotiation documentation for the power purchase agreement, the heat rate of such power plants is determined by the standard heat rate of power plants in the same technology and capacity group. The system operator and electricity market entity is responsible for calculating the standard heat rate.

- The efficiency decay factor of thermal power plants is determined by the efficiency decay factor in the contract or in the negotiation documentation for the power purchase agreement provided by the sole bulk buyer.

In cases where thermal power plants do not have efficiency decay factor data in the contract or in the negotiation documentation for the power purchase agreement, the efficiency decay factor of the standard power plant in the same group is applied, as determined by the system operator and electricity market entity.

- The variable price component adjusts according to other changes in power plants (VND/kWh) is determined according to the following formula:

Where:

C_vlp: The total annual auxiliary material costs of the power plant are determined based on the quantity and unit prices of auxiliary materials used for power generation (VND);

C_kd: The total start-up costs including fuel costs and other start-up costs (VND);

C_k: Annual maintenance and repair costs, calculated based on the total investment capital for construction and equipment of the power plant, and the regular maintenance cost ratio as stipulated in Appendix 1 of Circular No. 56/2014/TT-BCT dated December 29, 2014, issued by the Minister of Industry and Trade on the method for determining power generation prices and procedures for inspecting power purchase agreements (VND);

"5. The pre-tax weighted average cost of capital i (%) is determined according to the formula below:_{organize credit institutions, foreign bank branches are responsible for organizing the implementation of this Circular.}: The rated capacity of the power plant (kW);

k_CS: The average capacity reduction ratio over the entire economic life of the power plant, as stipulated in Point c Clause 2 Article 5 of this Circular (%);

T_max: The average annual operating time at maximum capacity for the power plant's entire project life, as stipulated in Appendix 1 of Circular No. 56/2014/TT-BCT dated December 29, 2014, issued by the Minister of Industry and Trade on the method for determining power generation prices and procedures for inspecting power purchase agreements (hours).

8. Supplement Point e Clause 1 Article 18 as follows:

"e) For hydropower plants belonging to the group with reservoir regulation for more than one week, if the electricity production volume in the annual power supply plan issued annually by the Ministry of Industry and Trade is lower than 65% of the average annual electricity production volume (GO), then the participation in the electricity market of the power plant in that year shall be applied as for hydropower plants with reservoir regulation for less than two days as stipulated in this Circular.

For hydropower plants using water from irrigation reservoirs for power generation and having special requirements from competent state authorities, the Electricity Regulation Agency is responsible for reporting to the Ministry of Industry and Trade to consider and decide on the form of participation in the electricity market of the power plant in that year."

9. Amending Clause 1 Article 22 as follows:

"1. The ceiling bid price of thermal power units is determined by the following formula:

"5. The pre-tax weighted average cost of capital i (%) is determined according to the formula below:_tr = (1 + ảo _DC ) x ("5. The pre-tax weighted average cost of capital i (%) is determined according to the formula below:_NLC x HR_C + "5. The pre-tax weighted average cost of capital i (%) is determined according to the formula below:_NLP x HR_{"5. The pre-tax weighted average cost of capital i (%) is determined according to the formula below:})

Where:

"5. The pre-tax weighted average cost of capital i (%) is determined according to the formula below:_tr : The ceiling bid price of the thermal power unit (VND/kWh);

ảo_DC: The price adjustment coefficient for the ceiling price according to the classification results of thermal power units. For base thermal power units ảo_DC = 0%; peak thermal power units ảo_DC = 5%; and peak thermal power units ảo_DC = 20%;

"5. The pre-tax weighted average cost of capital i (%) is determined according to the formula below:_NLC: The price of primary fuel for the thermal power unit (VND/kCal or VND/BTU);

"5. The pre-tax weighted average cost of capital i (%) is determined according to the formula below:_NLP: The price of auxiliary fuel for the thermal power unit (VND/kCal or VND/BTU);

HR_C: The specific fuel consumption rate of primary fuel at the average load of the thermal power unit (BTU/kWh or kCal/kWh);

HR_{"5. The pre-tax weighted average cost of capital i (%) is determined according to the formula below:}: The specific fuel consumption rate of auxiliary fuel at the average load of the thermal power unit (BTU/kWh or kCal/kWh)."

10. Amending Point a Clause 2 Article 22 as follows:

"a) The ceiling bid price of the thermal power unit is determined by the following formula:

"5. The pre-tax weighted average cost of capital i (%) is determined according to the formula below:_tr : The ceiling bid price of the thermal power unit (VND/kWh);= 0%; peak thermal power units K

ảo_DC: The price adjustment coefficient for the ceiling price according to the classification results of thermal power units. For base thermal power units ảo_DC = 5%; and peak thermal power units K_DC : The variable price for year N according to the power purchase agreement (VND/kWh)."DC = 20%;

Clause 1 Article 24 as follows:

11. Amending "1. The best new power plant for year N is a power plant meeting the conditions to participate in the electricity market in year N as stipulated in Clause 1 Article 4 of this Circular and satisfying the following criteria:

a) Begins commercial operation and generating full installed capacity in year N-1;

b) Is a base load power plant classified according to the criteria in Clause 3 Article 21 of this Circular;

c) Uses coal-fired or combined cycle gas turbine technology;

d) Has the lowest average full cost of generation per kWh."

Clause 2 Article 25.

12. Repeals Point b Clause 3 Article 26 as follows:

13. Amending "b) Determine the market capacity price for each trading period in the coming year according to the following formula:

I: Total number of trading periods in month t;

Where:

i: Trading period i in month t;

i: Trading cycle i in month t;

||| The market capacity price of trading cycle i (VND/kW);

Article 24_{||| BNE}||| : The average annual available capacity of the best new power plant N (kW);

MENTS^{organize credit institutions, foreign bank branches are responsible for organizing the implementation of this Circular.} ||| : The shortage cost of month t of the best new power plant (VND);

||| : The system load forecast of trading cycle i according to the typical daily load curve forecast of month t as stipulated in Article 19 of this Circular (MW).

14. Amending ||| Clause 1 of Article 27 is as follows:

||| "1. To prepare the next year's power system operation plan using the constrained scheduling method. Input parameters used in preparing the next year's power system operation plan include the fluctuating prices of thermal power plants, hydrological characteristics, and technical specifications of power plants."

15. Amending ||| Point a of Clause 3 of Article 31 is as follows:

||| "a) The expected electricity generation volume in each trading cycle in the power market simulation of the power plant."

16. Amending ||| Clause 2 of Article 35 is as follows:

||| "2. The power system and power market operating unit shall publish the parameters applied for calculating the ceiling bid price of thermal power units and the results of calculating the ceiling bid price of thermal power units for the upcoming month according to the power market operation schedule as specified in Appendix 1 of this Circular."

17. Amending ||| Article 36 is as follows:

 “||| Article 36. Adjustment of Monthly Contract Volume

||| 1. The monthly contract volume may be adjusted if the maintenance schedule of the power plant in month M changes from the annual operation plan due to:

||| a) Requirements of the power system and power market operating unit to ensure power system security not due to reasons of the power plant;

||| b) Requirements of competent state agencies and agreed upon by the power system and power market operating unit based on actual operational conditions of the system.

||| 2. The power system and power market operating unit shall adjust the monthly contract volume in cases stipulated in Clause 1 of this Article according to the following principle: Transfer between months the corresponding contracted volume Qc corresponding to the shifted repair time, ensuring that the total annual adjusted Qc remains unchanged in accordance with the Contract Volume Adjustment Procedure issued by the Electricity Regulatory Authority.

||| In case the power plant's maintenance schedule is changed in the last month of the year, the corresponding contracted volume Qc for the repair time of this month will not be transferred to the following year.

||| 3. If the average water inflow, the power plant's generation volume from January 1st of year N to the 20th of each month, and the projected upstream reservoir level at the beginning of the next month differ significantly from the water inflow, cumulative contractual volume, and reservoir level calculated in the annual plan, the power generation unit, the sole bulk buyer, shall coordinate with the power system and power market operating unit to confirm and report to the Electricity Regulatory Authority for consideration of adjustment for the next month in accordance with the Contract Volume Adjustment Procedure issued by the Electricity Regulatory Authority.

18. Amending ||| Clause 3, Clause 6 of Article 37 are as follows:

||| "3. In case the power plant's monthly contract volume in trading cycle i exceeds the highest generation volume of the power plant, the contract volume in that trading cycle shall be adjusted to the highest generation volume of the power plant. The highest generation volume of the power plant in the trading cycle corresponds to the volume within one hour calculated based on the announced capacity in the default bidding month-to-be sent by the power generation unit to the power system and power market operating unit as stipulated in Point a of Clause 3 of Article 47 of this Circular.

||| 6. The power system and power market operating unit shall publish through the power market electronic information portal the preliminary calculation results of hourly contract volume in the month for the sole bulk buyer and direct trading power generation unit before the 23rd of each month. The sole bulk buyer and direct trading power generation unit shall cooperate with the power system and power market operating unit to check discrepancies in the calculation results of the next month's hourly contract volume before the 25th of each month. The power system and power market operating unit shall send the officially calculated hourly contract volume in the month to the sole bulk buyer and direct trading power generation unit according to the power market operation schedule specified in Appendix 1 of this Circular."

19. ||| Supplement Article 37a as follows: Article 37 as follows:

||| "Article 37a. Adjustment of Hourly Contract Volume

||| 1. In case a unit of the power plant experiences an incident, the hourly contract volume (Qc hour) of the power plant shall be adjusted as follows:

||| a) In case the incident duration of the unit of the power plant is less than or equal to 72 hours (equivalent to 72 trading cycles): No adjustment of the power plant's contract volume (Qc) is made;

||| b) In case the incident duration of the unit of the power plant exceeds 72 hours:

||| - During the period from the incident time to trading cycle 72: Maintain the allocated contract volume (Qc) for the power plant;

||| - During the period from trading cycle 73 until the unit is repaired and becomes available:

||| + In case the actual generation volume at the delivery point (Qmq) of the power plant is less than the contract volume (Qc) of the power plant during this period, adjust the hourly contract volume to the actual generation volume Qmq of the power plant;

||| + In case Qmq of the power plant is greater than or equal to Qc of the power plant during this period, do not adjust the Qc of the power plant.

||| 2. In case the unit of the power plant extends the repair time beyond the approved plan and is included in the calculation of hourly contract volume, the hourly contract volume of the power plant during the extended repair cycles shall be adjusted as follows:

||| During the extended repair cycles, if there is a cycle where the actual generation volume at the delivery point (Qmq) of the power plant is less than Qc of the power plant, adjust the hourly contract volume in those cycles to the actual generation volume Qmq of the power plant.

||| 3. The direct trading power generation unit shall coordinate with the power system and power market operating unit to confirm incidents involving unit failures or prolonged repairs in accordance with the Cooperation Procedure for Confirming Incidents Serving Settlements on the Market and send them to the sole bulk buyer and direct trading power generation unit as the basis for calculating adjustments to Qc."

4. The sole bulk purchasing unit and the direct power generation trading unit shall be responsible for reconfirming the adjusted monthly contract volume and hourly contract volume of the power plant according to the provisions of Clause 1 and Clause 2 of this Article.

20. Amending Clause 7 of Article 41 is amended as follows:

"7. The expected volume of hydropower plants violating the weekly water level limit for two consecutive weeks shall be calculated and scheduled by the system operation and electricity market unit for each transaction cycle of the following day."

21. Amending Point d of Clause 2 of Article 42 is amended as follows:

"d) An increased capacity bid revision from power generation units (excluding increased capacity bid revisions from hydropower plants with reservoir regulation under two days) may only be used as a bid for scheduling the next hour's dispatch in cases of power shortage warnings."

22. Supplement Clause 3 as follows: Article 44 as follows:

"3. Hydropower plants with reservoir regulation under two days are permitted to submit revised bids for increased capacity for the next hour's dispatch based on the actual hydrological conditions of the plant."

23. Amending Clause 2 of Article 71 is amended as follows:

"2. The system operation and electricity market unit shall be responsible for recalculating the components of electricity volume for settlement in the market for the transaction cycles specified in Clause 1 of Article 70 of this Circular, based on the following components:

a) The hourly contract volume of power plants in transaction cycle i is determined according to the provisions of this Circular's Article 37;) shall be determined in accordance with Article 37 of this Circular;

b) The electricity volume settled at the market price (Qsmpi) of power plants in transaction cycle i is determined according to the provisions of Clause 5 of Article 70 of this Circular;

c) The metered electricity volume of power plants in transaction cycle i (Qmq)Qmq_{ANNEX I.A[31]}).”

24. Repeals Amend Clauses 4, 5, and 7 of Article 80; amend Clause 9 of Article 80 as follows:

"9. In cases where gas turbine power plants temporarily participate indirectly in the electricity market at the request of the system operation and electricity market unit to ensure power system security, the entire electricity generation volume of the power plant in related transaction cycles shall be settled at the contract purchase and sale electricity price."

25. Supplement Clause 5 of Article 83 as follows: "5. Forms of confirmation of payment statements and market events:

Direct trading power generation units, sole bulk purchasing units, and system operation and electricity market units shall be responsible for using digital signatures to serve the work of confirming and issuing market payment statements and confirming market events. In case of digital signature failure, the sole bulk purchasing unit and the system operation and electricity market unit shall be responsible for directly confirming and issuing market payment statements and confirming market events, and reconfirming them once the failure is resolved."

Clause 3 of Article 100 is amended as follows:

26. Amending "3. Before the 20th of each month, prepare and publish the previous month's market operation report."

Article 114 is amended as follows:

27. Supplement Clause 3 as follows: "3. Develop regulations for participation in the electricity market for BOT power plants and power plants within industrial zones selling only part of their production to the national grid, to be submitted to the Minister of Industry and Trade for consideration and decision."

Clause 1 of Article 115 is amended as follows:

28. Adding Clause 1a after "1a. Develop additional procedures, to be submitted to the Electricity Regulatory Authority for issuance, including:

a) Procedures for training, testing, and recognizing the title of market trading operations engineer;

b) Procedures for adjusting contract volumes."

Amend and supplement some articles of Circular No. 56/2014/TT-BCT dated December 29, 2014, issued by the Minister of Industry and Trade, stipulating the method for determining power generation prices and the procedure for inspecting electricity purchase and sale contracts as follows:

Article 2.

Clause 8 of Article 2 is amended as follows:

1. Amending "8. The initial approved total investment amount is the total project investment amount attached to the initial basic design that has been approved by the competent authority according to the regulations."

"8. The initial approved total investment amount of the project is the total investment amount of the project together with the initial basic design that has been approved by the competent authority in accordance with the regulations."

2. Amending Article 6 as follows:

“Article 6. Method for determining the fixed operation and maintenance price of thermal power plants

Fixed operation and maintenance price based on Year FOMC_ầu (VND/kWh) is determined according to the following formula:

Where:

: The fixed operation and maintenance price according to major repair costs and other costs of Year FOMC, determined in accordance with Clause 1 of this Article (VND/kWh);

: The fixed operation and maintenance price according to labor costs of Year FOMC, determined in accordance with Clause 2 of this Article (VND/kWh).

1. Fixed operation and maintenance price according to major repair costs and other costs of Year FOMC  (VND/kWh) is determined according to the following formula:

Economic life of the power plant as specified in the Appendix attached to this Circular (years)._scl: Total major repair costs and other costs of Year FOMC including major repair costs, minor material costs, external service costs, other monetary costs (VND). In cases where total major repair costs and other costs cannot be determined using the formula provided in this Clause, apply the method to calculate total major repair costs and other costs TC_csl of Year FOMC according to the following formula:

Economic life of the power plant as specified in the Appendix attached to this Circular (years)._csl =VĐT_XL+TB x k_F,scl

Where:

VĐT_XL+TB: Total investment cost for construction and equipment of the thermal power plant determined based on the calculated electricity price specified in Clause 2 of Article 5 of this Circular (VND);

k_F,scl: Ratio of major repair costs and other costs (%) of the thermal power plant, k_F,scl prescribed in Appendix 1 of this Circular;

"5. The pre-tax weighted average cost of capital i (%) is determined according to the formula below:_{organize credit institutions, foreign bank branches are responsible for organizing the implementation of this Circular.} : Rated capacity of the generator at design approved, determined in accordance with Point c of Clause 2 of Article 5 of this Circular (kWh);

T_max: Average number of hours of maximum capacity operation of the power plant over many years, determined in accordance with Point c of Clause 2 of Article 5 of this Circular (kWh);

organize credit institutions, foreign bank branches are responsible for organizing the implementation of this Circular._td: Ratio of self-use and loss of the power plant, determined in accordance with Point d of Clause 2 of Article 5 of this Circular (%);

k_CS: Average capacity reduction ratio calculated throughout the entire economic life of the power plant, determined in accordance with Point c of Clause 2 of Article 5 of this Circular (%).

2. Fixed operation and maintenance price according to labor costs of Year FOMC  (VND/kWh) is determined according to the following formula:

Where:

Economic life of the power plant as specified in the Appendix attached to this Circular (years)._nc: Total labor costs at Year FOMC including salary costs, social insurance costs, health insurance costs, trade union fees, and accompanying allowances (VND) for power plant projects initiated after February 3, 2015.

For power plant projects initiated before February 3, 2015: Total labor costs TC_nc Year FOMC is determined based on the total labor costs at the year of commercial operation of the power plant and converted to Year FOMC as follows:

- In case the wage applied to calculate labor costs at the year of commercial operation of the power plant equals the minimum regional wage: The conversion ratio to Year FOMC is determined based on the minimum regional wage;

- In case the wage applied to calculate labor costs at the year of commercial operation of the power plant exceeds the minimum regional wage: The conversion ratio to Year FOMC is determined according to the Consumer Price Index (CPI) but not exceeding 2.5%/year.

In case total labor costs cannot be determined according to the above cases: Apply the method to calculate total labor costs TC_nc Year FOMC according to the following formula:

Economic life of the power plant as specified in the Appendix attached to this Circular (years)._nc =VĐT_XL+TB x k_F,nc

Where:

VĐT_XL+TB: Total investment cost for construction and equipment of the thermal power plant determined based on the calculated electricity price specified in Clause 2 of Article 5 of this Circular (VND);

k_F,nc: Ratio of labor costs (%) of the thermal power plant, k_F,nc prescribed in Appendix 1 of this Circular.

"5. The pre-tax weighted average cost of capital i (%) is determined according to the formula below:_{organize credit institutions, foreign bank branches are responsible for organizing the implementation of this Circular.} : Rated capacity of the generator at design approved, determined in accordance with Point c of Clause 2 of Article 5 of this Circular (kWh);

T_max: Average number of hours of maximum capacity operation of the power plant over many years, determined in accordance with Point c of Clause 2 of Article 5 of this Circular (kWh);

organize credit institutions, foreign bank branches are responsible for organizing the implementation of this Circular._td : Ratio of self-use and loss of the power plant determined in accordance with Point d of Clause 2 of Article 5 of this Circular (%);

k_CS: Average capacity reduction ratio calculated throughout the entire economic life of the power plant determined in accordance with Point c of Clause 2 of Article 5 of this Circular (%).”

3. Amending Clause 3 of Article 7 as follows:

“3. Components of adjustable variable prices adjusted for other fluctuations of power plants in Year FOMC (VND/kWh) is determined according to the following formula:

Where:

C_vlp: Annual total minor material costs of power plants determined based on the quantity and unit price of various minor materials used for power generation in Year FOMC (VND);

C_kd: Total start-up costs including fuel costs, other start-up costs (VND); the number of permitted start-ups agreed upon by both parties based on system requirements and operational characteristics of the power plant;

C_k: Annual regular maintenance and repair costs, calculated based on the total investment cost for construction and equipment of the power plant, and the regular maintenance cost ratio prescribed in Appendix 1 of this Circular (VND);

"5. The pre-tax weighted average cost of capital i (%) is determined according to the formula below:_{organize credit institutions, foreign bank branches are responsible for organizing the implementation of this Circular.}: The rated capacity of the power plant (kW);

k_CS: The average capacity reduction ratio over the entire economic life of the power plant, as stipulated in Point c Clause 2 Article 5 of this Circular (%);

T_max: Average annual operating time at maximum capacity over the entire project life of the power plant (hours) and prescribed in Appendix 1 of this Circular.”

4. Amending Article 11 is amended as follows:

“Article 11. Method for Determining the Operating and Maintenance Cost Price of Hydroelectric Power Plants

The Operating and Maintenance Cost Base Year Price (FOMC) is determined according to the following formula (VND/kWh):ầu) shall be determined by the following formula (VND/kWh):

Where:

Fixed Operating and Maintenance Cost based on major repair costs and other costs in the Base Year, as specified in Clause 1 of this Article (VND/kWh);

: The fixed operation and maintenance price according to labor costs of Year FOMC, determined in accordance with Clause 2 of this Article (VND/kWh).

1. Operating and Maintenance Cost based on major repair costs and other costs in the Base Year:VL

Where:

Economic life of the power plant as specified in the Appendix attached to this Circular (years)._scl Total major repair costs and other costs in the Base Year include major repair costs, spare parts costs, external service costs, and other monetary costs (VND). In cases where the total major repair costs and other costs cannot be determined using the formula stipulated in this Clause, apply the method to calculate the total major repair costs and other costs TC_csl of Year FOMC according to the following formula:

Economic life of the power plant as specified in the Appendix attached to this Circular (years)._csl =VĐT_XL+TB x k_scl

Where:

VĐT_XL+TBTotal investment cost for construction and equipment of the hydroelectric power plant, determined based on the calculated electricity price level as specified in Clause 2, Article 10 of this Circular (VND);

k_sclProportion of major repair costs and other costs (%) of the hydroelectric power plant, kscl as specified in Appendix 1 of this Circular;

A_bq Average annual power generation at the generator terminal, as specified in Point a, Clause 2, Article 10 of this Circular (kWh);

organize credit institutions, foreign bank branches are responsible for organizing the implementation of this Circular._td Proportion of self-consumption and transformer losses of the power plant, as specified in Point a, Clause 2, Article 10 of this Circular (%).

2. Operating and Maintenance Cost based on labor costs in the Base Year:) are determined according to the following formula:

Where:

Economic life of the power plant as specified in the Appendix attached to this Circular (years)._nc Total labor costs in the Base Year include salary costs, social insurance costs, medical insurance costs, trade union fees, and accompanying allowances (VND) for power plant projects initiated after February 3, 2015.

For power plant projects initiated before February 3, 2015: Total labor costs TC_nc Year FOMC is determined based on the total labor costs at the year of commercial operation of the power plant and converted to Year FOMC as follows:

- In case the wage applied to calculate labor costs at the year of commercial operation of the power plant equals the minimum regional wage: The conversion ratio to Year FOMC is determined based on the minimum regional wage;

- In case the wage applied to calculate labor costs at the year of commercial operation of the power plant exceeds the minimum regional wage: The conversion ratio to Year FOMC is determined according to the Consumer Price Index (CPI) but not exceeding 2.5%/year.

In case total labor costs cannot be determined according to the above cases: Apply the method to calculate total labor costs TCnc Year FOMC according to the following formula:

Economic life of the power plant as specified in the Appendix attached to this Circular (years)._nc =VĐT_XL+TB x k_nc

Where:

VĐT_XL+TBTotal investment cost for construction and equipment of the hydroelectric power plant, determined based on the calculated electricity price level as specified in Clause 2, Article 10 of this Circular (VND);

k_ncProportion of labor costs (%) of the hydroelectric power plant, k_nc prescribed in Appendix 1 of this Circular.

A_bq Average annual power generation at the generator terminal, as specified in Point a, Clause 2, Article 10 of this Circular (kWh);

organize credit institutions, foreign bank branches are responsible for organizing the implementation of this Circular._td Proportion of self-consumption and transformer losses of the power plant, as specified in Point a, Clause 2, Article 10 of this Circular (%).

5. Amending Point b, Clause 2, Article 14 is as follows:

"b) Components of fixed operating and maintenance cost based on labor costs in month t, year j:) determined as follows:

- In cases where the calculated wage rate in the pricing plan equals the regional minimum wage, the component of fixed operating and maintenance cost based on labor costs is determined according to the following formula (VND/kWh):

Where:

: GFixed operating and maintenance cost based on labor costs is determined according to the method prescribed in Clause 2, Article 6 of this Circular (VND/kWh);

nh cơ_{min, j,t} Regional minimum wage at the time of payment in month t, year j (VND/person/month);

nh cơ_min,bRegional minimum wage in the Base Year (VND/person/month).

- In cases where the calculated wage rate in the pricing plan exceeds the regional minimum wage or the total labor costs TCnc are calculated based on the proportion of labor costs of the power plant, the component of fixed operating and maintenance cost based on labor costs is determined according to the following formula (VND/kWh):

Where:

Fixed operating and maintenance cost based on labor costs is determined according to the method prescribed in Clause 2, Article 6 of this Circular (VND/kWh);

i: Sliding component of operating and maintenance cost based on Vietnam Consumer Price Index (CPI) but not exceeding 2.5%/year;

l: Order number of the payment year counted from the Base Year (for the Base Year, l=1)."

6. Amending Point b, Clause 2, Article 15 is as follows:

"b) Components of fixed operating and maintenance cost based on labor costs in month t, year j:) determined as follows:

- In cases where the calculated wage rate in the pricing plan equals the regional minimum wage, the component of fixed operating and maintenance cost based on labor costs is determined according to the following formula (VND/kWh):

Where:

 : Fixed operating and maintenance cost based on labor costs is determined according to the method prescribed in Clause 2, Article 11 of this Circular (VND/kWh);

nh cơ_min,j,t Regional minimum wage at the time of payment in month t, year j (VND/person/month);

nh cơ_min,bRegional minimum wage in the Base Year (VND/person/month).

- In cases where the calculated wage rate in the pricing plan exceeds the regional minimum wage or the total labor costs TC_nc are calculated based on the proportion of labor costs of the power plant, the component of fixed operating and maintenance cost based on labor costs is determined according to the following formula (VND/kWh):

Where:

Fixed operating and maintenance cost based on labor costs is determined according to the method prescribed in Clause 2, Article 11 of this Circular (VND/kWh);

i: Sliding component of operating and maintenance cost based on Vietnam Consumer Price Index (CPI) but not exceeding 2.5%/year;

l: Order number of the payment year counted from the Base Year (for the Base Year, l=1)."

7. Supplement Clause 2a after Clause 2, Article 28 as follows:

"2a. For power plant projects initiated before February 3, 2015, if necessary, allow the use of the project's approved total investment amount effective at the time of initiating construction of the power plant, approved by the competent authority according to regulations, to calculate the electricity price instead of the initial approved project total investment amount. In cases where the project's total investment amount used to calculate the electricity price at the time of initiating construction of the power plant cannot be determined, the Vietnam Electricity Corporation and the power generation unit shall report to the Ministry of Industry and Trade for consideration of the total investment amount used in negotiating electricity prices and power purchase contracts based on actual circumstances."

8. Amending Clause 4, Article 3, Appendix 3 of the Model Power Purchase Contract issued together with Circular No. 56/2014/TT-BCT is as follows:

"4. During the period when the electricity market is suspended or before the power plant participates in the electricity market: The electricity payment for the portion of power generated at the delivery point during the period when the electricity market is suspended or before the power plant participates in the electricity market is determined according to the contract price specified in Section I, Appendix V of the Contract."

Article 3. Effectiveness

1. This Circular takes effect from the year January 1, 2016.

2. Director of the Electricity Regulatory Authority, Head of the Ministry's Office, Inspector General of the Ministry, Heads of Departments, Directors of General Departments, Directors of Bureaus related to the Ministry, relevant units, and members of the electricity market are responsible for implementing this Circular./.

Place of Receipt: - General Secretary's Office; - Prime Minister, Deputy Prime Ministers; - Ministries, Agencies equivalent to Ministries, Agencies under the Government; - Provincial and municipal People's Committees directly under the central government; - Supreme People's Procuracy, Supreme People's Court; - State Audit Agency; - Minister; - Deputy Ministers; - Legal Documents Supervision Bureau (Ministry of Justice); - Official Gazette; - Government website; - Ministry of Industry and Trade website; - Vietnam Electricity Corporation; - National Power Transmission Corporation; - National Load Dispatch Center; - Electricity Purchasing and Selling Company; - Electricity Corporations; - File: VT, ĐTĐL, PC.

DEPUTY MINISTER DEPUTY MINISTER Hoang Quoc Vuong