Circular No. 96/2012/TT-BTC guiding the financial mechanism to support electricity prices for wind power projects connected to the grid.

CIRCULAR

Guidelines for the financial mechanism to support wind power grid-connected project electricity prices

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Pursuant to the Law on State Budget dated December 16, 2002;

Pursuant to the Decree No. 118/2008/NĐ-CP dated November 27, 2008 of the Government stipulating the functions, tasks, powers, and organizational structure of the Ministry of Finance;

Pursuant to Decision No. 37/2011/QĐ-TTg dated June 29, 2011 of the Government on the mechanism to support the development of wind power projects in Vietnam;

Considering the proposal of the Director of the Department of Financial Institutions and Financial Organizations;

The Minister of Finance hereby issues guidelines for the financial mechanism to support electricity prices for wind power grid-connected projects as follows:

Article 1. Scope of application

1. This Circular guides the State's support for electricity prices for wind power grid-connected projects through the Vietnam Environment Protection Fund in accordance with Decision No. 37/2011/QĐ-TTg dated June 29, 2011 of the Government on the mechanism to support the development of wind power projects in Vietnam (hereinafter referred to as Decision No. 37/2011/QĐ-TTg).

2. The electricity product eligible for price support from the State is electricity produced from wind power projects constructed, operated, and connected to the national power grid to supply part or all of the generated power.

3. Wind power grid-connected projects receiving price support in accordance with Decision No. 37/2011/QĐ-TTg and these guidelines shall not be subject to the subsidy mechanism for production volume under other current regulations.

4. Wind power projects that are permitted by competent authorities to apply according to Decision No. 130/2007/QĐ-TTg dated August 2, 2007 of the Government on certain financial mechanisms and policies for investment projects under clean development mechanisms shall be subject to the subsidy mechanism as stipulated in Joint Circular No. 58/2008/TTLT-BTC-BTN&MT dated July 4, 2008 of the Ministry of Finance and the Ministry of Natural Resources and Environment guiding the implementation of certain provisions of Decision No. 130/2007/QĐ-TTg dated August 2, 2007 of the Government on certain financial mechanisms and policies for investment projects under clean development mechanisms; and Joint Circular No. 204/2010/TTLT-BTC-BTN&MT dated December 15, 2010 of the Ministry of Finance and the Ministry of Natural Resources and Environment amending and supplementing certain contents of Joint Circular No. 58/2008/TTLT-BTC-BTN&MT dated July 4, 2008.

Article 2. Objectives eligible for electricity price support

The entity eligible for electricity price support through the Vietnam Environment Protection Fund is the Vietnam Electricity Corporation or its authorized units (hereinafter referred to as the Purchaser) purchasing electricity from enterprises producing and operating wind power projects (hereinafter referred to as the Seller) in accordance with Decision No. 37/2011/QĐ-TTg.

Article 3. Conditions for electricity price support

1. The Purchaser is responsible for purchasing the entire electricity generated from wind power grid-connected plants within their jurisdiction in accordance with Clause 1, Article 11 and Clause 1, Article 14 of Decision No. 37/2011/QĐ-TTg.

2. The purchase and sale of electricity shall be carried out through a power purchase agreement established in accordance with the model power purchase agreement for wind power grid-connected projects issued by the Ministry of Industry and Trade. The purchase price shall be implemented in accordance with Article 14 of Decision No. 37/2011/QĐ-TTg.

3. Complete the application documents for electricity price support in accordance with Article 7 of this Circular.

Article 4. Level of electricity price support

1. The level of electricity price support for the Purchaser for the total electricity purchased from wind power grid-connected plants is VND 207 per kWh.

2. The level of electricity price support may change based on the decision of the Prime Minister during each period.

Article 5. Amount of electricity price support

The amount of electricity price support for the Purchaser is determined as follows:

In which, the quantity of electricity purchased is the actual electricity delivered by the Seller to the Purchaser in each payment period at the point of delivery and confirmed by both parties. The method of delivering electricity between the two parties must comply with the metering regulations issued by the Ministry of Industry and Trade.

Article 6. Duration of electricity price support

1. The duration of electricity price support is the term of the power purchase agreement as stipulated in Point a, Clause 2, Article 11 of Decision No. 37/2011/QĐ-TTg and becomes effective.

2. The duration of electricity price support may change based on the decision of the Prime Minister during each period.

Article 7. Application documents for electricity price support

1. Application documents for electricity price support include:

a) A request for electricity price support from the Purchaser.

b) An authorization letter from the Vietnam Electricity Corporation for cases where the Purchaser is a subsidiary unit. This document is only submitted once when there is a first occurrence of a request for price support and must be supplemented if there are changes in the authorization of the Vietnam Electricity Corporation for its subsidiary units.

c) The signed and effective power purchase agreement between the Purchaser and the Seller (original or certified copy). This document is only submitted once when there is a first occurrence of a request for price support and must be resubmitted if there are changes in the power purchase agreement or a new agreement is made.

d) A confirmation record of the meter reading for the period between the Purchaser and the Seller (certified copy).

đ) A summary sheet of electricity delivery for the period between the Purchaser and the Seller (certified copy).

e) Payment vouchers for electricity payments from the Purchaser to the Seller regarding the actual electricity purchased and sold in each period (certified copy).

g) Other relevant documents (if any).

2. The Purchaser must provide complete and truthful related documents and bear responsibility for the accuracy of the provided documents.

Article 8. Preparation of budget estimates, allocation of budgets, execution of budgets, accounting, settlement of support funds, and reporting procedures

1. Establishment of budget projections:

a) Before June 30 of each year, the Purchaser bases on the power purchase agreements, registration documents of expected electricity sales volume for the following year from the Seller; aggregates the expected electricity purchase volume for the following year from each wind power grid-connected plant and estimates the total amount of support funds according to the regulations and sends it to the Vietnam Environment Protection Fund.

b) Before July 10 of each year, the Vietnam Environment Protection Fund is responsible for reviewing and estimating the electricity price support for the Purchaser for the following year, preparing the budget estimate for electricity price support for the following year and sending it to the Ministry of Natural Resources and Environment and the Ministry of Industry and Trade for comments.

c) Before July 20th each year, based on the opinions of the Ministry of Industry and Trade and the Ministry of Natural Resources and Environment, the total financial support for electricity prices shall be compiled into the budget allocation plan for environmental protection expenses from the central budget to be submitted to the Ministry of Finance for review, consolidation, and reporting to the Government for consideration and decision by the National Assembly.

2. Allocating the budget:

Based on the annual budget allocation plan decided by the National Assembly and assigned by the Prime Minister, the Ministry of Finance shall implement the allocation of the budget for electricity price support to the Vietnam Environmental Protection Fund to carry out.

3. Implementation of the Budget:

a) Based on the application for electricity price support submitted by the electricity purchaser at each stage during the year, the Vietnam Environmental Protection Fund shall verify and determine the amount of support required for the electricity purchaser according to the regulations, and withdraw the budget with a limit equal to the total amount of support required for the electricity purchaser at each stage, directly paying the support amount to the electricity purchaser, ensuring that the cumulative withdrawals do not exceed the annual budget allocated.

b) In cases where the amount of support required exceeds the annual budget, the Vietnam Environmental Protection Fund shall promptly report to the Ministry of Natural Resources and Environment and the Ministry of Finance for consolidation and submission to the competent authority for specific resolution.

4. Accounting, Settlement, and Reporting System:

The Vietnam Environmental Protection Fund shall account for and settle the budget for electricity price support from the state budget into the fund's revenue and expenditure sources, and implement regular and annual reporting systems in accordance with current regulations on state budget management and the financial management rules of the Vietnam Environmental Protection Fund.

Article 9. Implementation

This Circular takes effect from August 1, 2012. During implementation, if there are difficulties or obstacles, agencies and units are requested to reflect them to the Ministry of Finance for study, amendment, and supplementation./.