Nội dung toàn văn Circular No. 12/2014/TT-BCT on the calculation of the average retail price of electricity
THE MINISTRY OF INDUSTRY AND TRADE | SOCIALIST REPUBLIC OF VIETNAM |
No. 12/2014/TT-BCT | Hanoi, March 31st, 2014 |
CIRCULAR
ON THE CALCULATION OF THE AVERAGE RETAIL PRICE OF ELECTRICITY
Pursuant to the Decree no 95/2012/NĐ-CP dated November 12, 2008 of the Government defining the functions, tasks, entitlements and organizational structure of the Ministry of Industry and Trade;
Pursuant to the Law on Electricity dated December 03rd, 2004; the Law on amending a number of Articles of the Law on Electricity dated November 20, 2012;
Pursuant to the Decree no. 137/2013/NĐ-CP dated October 21, 2013 of the Government detailing the implementation a number of articles of the Law on Electricity and the Law on amending a number of Articles of the Law on Electricity;
Pursuant to the Decision No. 69/2013/QĐ-TTg dated November 19, 2013 of the Prime Minister on the mechanism of adjustment of electricity average retail price;
At the request of the Director of Electricity Regulatory Authority
The Minister of Industry and Trade promulgates the Circular on the calculation of the average retail price of electricity.
Chapter I:
GENERAL PROVISIONS
Article 1. Scope and regulated entities
1. This Circular provides for the method and procedure for setting and assessing the average retail price of electricity according to Clause 4 Article 4 in the Decision no. 69/2013/QĐ-TTg dated November 19, 2013 of the Prime Minister on the mechanism of adjustment of average retail price of electricity; electricity price which Vietnam Electricity charges the Power Corporations.
2. This Circular is applied to Vietnam Electricity; The Power Corporations; entities engaged in electricity generation and using electricity.
Article 2. Interpreter of terms
In this Circular, the terms below are construed as follows:
1. The average retail price of electricity (hereinafter referred to as average price) is the specific price decided by the Prime Minister within the bracket of the average retail price of electricity.
2. Distributing electrical grid is a part of the electrical grid including the transmission lines and substations having the voltage of 35kV and below, and the transmission lines and substations with the voltage of 110kV which are used for distribution purpose.
3. Total commercial electricity generation is the total electricity generation which is sold to consumers by Vietnam Electricity and the Power Corporations.
4. The Power Corporation refers to either Northern Power Corporation, Southern Power Corporation, Middle Power Corporation, Hanoi Power Corporation and Power Corporation of Ho Chi Minh City.
5. Total cost of electric power distribution of a Power Corporation is the sum of reasonable and lawful costs of the distribution – retail of electricity
6. Year N is the year in which the average price calculated in year N-1 is applied.
Chapter II:
METHODS FOR SETTING AVERAGE PRICE
Article 3. Principles for setting average price
1. The average price shall be set annually according to reasonable and lawful cost of electricity generation and profit target from the phases of generation, transmittal, distribution – retail, administration and ancillary services in order to ensure the operation of electricity system, the power supply and satisfy the demand for investment.
2. The average price shall be calculated according to the calculation of the annual prime cost, the annual electricity sale, the annual plan for the operation of electric power system which is approved by The Ministry of Industry and Trade and the production costs which are permissible to be recovered but not included in the electricity price being used.
Article 4. Methods for setting average price
The average price (
) of the year N shall be determined according to the following formula:
Where:
Total cost of electricity generation in year N (VND), which is determined according to the method prescribed in Article 5 of this Circular;
Total permissible revenue from the electricity transmittal in year N (VND), which is determined according to the method developed by The Ministry of Industry and Trade in the Circular on the methods and procedure for setting and managing electricity transmission price;
Total cost of the electric power distribution – retail and target profit in year N (VND), which is determined according to Chapter III this Circular;
Total cost of the administration and ancillary services of electric power system in year N (VND), which is determined according to Article 6 this Circular;
The cost of the electricity generation and business costs that has not been included in the electricity price being used, which is determined according to the regulations of the competent agencies (VND/kWh);
: The amount deposited (+) to or withdrawn (-) from the electricity price stabilization fund according to the inter- ministerial guidance of the Ministry of Finance and the Ministry of Industry and Trade (VND/kWh);
: Estimated total commercial electricity generation in year N (kWh), which is determined according to the annual plan for electricity supply and electric power system operation, and the annual economic-technical figures.
Article 5. Methods for calculating total cost of electricity generation
1. Total cost of electricity generation in year N (VND) shall be determined according to the following formula:
Where:
Total reasonable and lawful cost and target profit in year N of the power plants of which the cost-accounting is dependent on Vietnam Electricity (VND), which is determined according to Clause 2 this Article;
: Total payment for electricity purchases (VND) according to the Power purchase agreements to buy electricity from independent power plants having the capacity of over 30 MW and import electricity in year N by Vietnam Electricity which is determined according to Clause 3 this Article;
: Total amount of electricity purchases in year N with regard to the electricity bought from the power plants having the capacity of 30 MW and below which are connected to the distribution networks of The Power Corporations (VND). The amount is calculated based on the prices prescribed in Power purchase agreements and estimated electricity generation in year N of the generating units, according to the annual plan for electricity supply and electric power system operation which is approved by The Ministry of Industry and Trade and the costs of electricity generation of the minor hydroelectric plants owned by The Power Corporations.
2. Total reasonable and lawful cost and target profit in year N of the power plants of which the cost-accounting is dependent on Vietnam Electricity shall be determined according to the following formula;
Where:
Total annual cost limit of the dependent cost-accounting power plant i which is determined according to the method issued by The Ministry of Industry and Trade in the Circular providing for method, procedures for assessing and approving annual cost limit of multi-purpose strategic hydroelectric plants;
n: The number of the power plants of which the cost-accounting is dependent on Vietnam Electricity;
: Target profit in year N of all the dependent cost-accounting power plants (VND) which is determined according to the return on equity defined by the competent agencies.
3. Total amount of electricity purchase according to Power purchase agreement to buy electricity from the sources having the capacity over 30 MW and import electricity in year N of Vietnam Electricity shall be determined according to the following formula:
Where:
Total amount of electricity purchase (VND) in year N with regard to the electricity bought from power plants having the capacity over 30 MW which is determined according to the prices prescribed in Power purchase agreements and estimated electrical production in year N;
: The cost of electricity import in year N (VND) which is determined according to the prices prescribed in Power purchase agreements with other countries and estimated imported electricity in year N.
Article 6. Methods for calculating costs of administration and ancillary services of electric power system and target profit
Total cost of the management and ancillary services of electric power system() in year N including costs of the operation of electric power systemand electricity market, and the management of the electricity generation and sale shall be determined as follows:
1. Cost of purchased raw materials, services and other charges shall be determined according to the limits issued by the competent authorities, the figures audited in year N-2, the estimate in the years N-1 and the year N.
2. Salaries and salary deductions shall be determined according to the relevant Law provisions.
3. Cost of fixed asset depreciation shall be determined according to the provisions for useful life and methods for depreciating fixed assets according to the Circular 45/2013/TT-BTC dated April 25, 2013 of the Ministry of Finance providing guidance on managing, using and depreciating fixed assets and guiding and amending documents for such Circular.
4. Costs of major repairs shall be determined according to the total estimation of necessary major repairs in year N.
5. Financial costs shall include interests on loans and loan fees which shall be paid in year N and estimated exchange differences in year N.
6. Target profit in year N of the administration and ancillary services of the electric power systemshall be determined according to their return on equity issued by the competent authorities.
Chapter III:
METHODS FOR CALCULATING TOTAL COST OF ELECTRIC POWER DISTRIBUTION - RETAIL
Article 7. Method for calculating total cost of electric power distribution – retailand target profit
Total cost of electric power distribution – retail and target profit (
) in year N shall be determined according to the following formular:
Where:
: Total cost of electric power distribution – retail of Power Corporation i in year N, which is determined according to the method prescribed in Article 8 of this Circular;
: : Target profit of Power Corporation i in year N which is determined according to the return on equity defined by the competent agencies.
Article 8. Method for calculating total cost of electric power distribution – retail of the Power Corporation i
The total cost of electric power distribution – retail of the Power Corporation i in year N shall be determined according to the following formula:
Where:
| Total cost of purchased raw materials in year N (VND); |
| Total cost of salaries in year N (VND); |
| Total cost of fixed asset depreciation in year N (VND); |
| Total cost of major repairs in year N (VND); |
| Total cost of purchased services in year N (VND); |
| Total amount of other charges in year N (VND); |
| Total financial cost in year N (VND); |
| Total cost of customer development in year N (VND); |
| Total cost of power generation from diesel fuel in year N (VND); |
Article 9. Rules on determination of contents of total cost of electric power distribution – retail
1.
a) Total cost of materials (
) in year N shall be determined according to the limits issued by the competent authorities, reasonable and lawful cost in year N-2 which are audited and published, total cost estimated in the years N-1 and N;
b) Total cost of salaries (
) in year N of the Power Corporation i including total cost of shall be determined according to relevant law provisions;
c) Fixed asset depreciation (
) in year N shall be determined according to the Law provisions for useful life and methods for depreciating fixed assets;
d) Total cost of major repair (
) of the Power Corporations in year N (without the budget for upgrading tangible fixed assets whose costs are increased) shall be determined according to the limits issued by the competent authorities, reasonable and lawful costs in year N-2 audited and published, total cost estimated in year N-1;
dd) Total cost of purchased services (
) in year N shall be determined according to the limits issued by the competent authorities, reasonable and lawful costs in year N-2 audited and published, total cost estimated in year N-1 and the operation plan in year N;
e) Total amount of other charges (
) in year N shall be determined according to the limits issued by the competent authorities, reasonable and lawful costs in year N-2 audited and published, total cost estimated in the years N-1 and N;
g) Total financial cost (
) in year N including interests on loans and relevant fees which shall be paid in ther year N shall be determined according to the credit contract and exchange differences estimated in year N;
h) Total cost of customer developmet (
) in year N shall be determined according to the limits issued by the competent authorities, reasonable and lawful cost in year N-2 audited and published, total cost estimated in the years N-1 and N;
i) Total cost of Power generation from diesel fuel(
) shall be the cost of the electricity generation of the generation station using diesel oil owned by the Power Corporation i.
2. The Power Corporations are responsible for sending the schemes for improving the efficiency of the operation and management of the electric power distribution networks, the quality of electric power distribution and the quality of customer services which may cause the rise of electricity generation cost to Vietnam Electricity upon the request of The Ministry of Industry and Trade. The schemes must be submitted to the Electricity Regulatory Authority for assessing and then the Electricity Regulatory Authority shall submit the schemes to the Ministry of Industry and Trade for approval.
Chapter IV:
METHODS FOR CALCULATING ELECTRICITY PRICE USED BY VIETNAM ELECTRICITY TO SELL ELECTRICITY TO THE POWER CORPORATIONS
Article 10. Methods for calculating price of electricity which Vietnam Electricity charges Power Corporation i
1. The price of electricity which Vietnam Electricity charges the Power Corporation i (hereinafter referred to as EVN electricity price) shall be determined using the following formula:
Where:
: EVN electricity price (VND/kWh)
:
Total revenue from electricity sale in year N of the Power Corporation i (VND), which is determined according to the total commercial electricity generation estimated in year N and the electricity retail price table applied to each group of customers of Power Corporation i which is approved in year N; 
: Total cost of electric power distribution – retail of The Power Corporations i in year N which is determined according to the method prescribed in Chapter III of this Circular;
: The estimated electricity transmitted from Vietnam Electricity (Electric Power Trading Company) to the Power Corporation i in year N (kWh).
2. Vietnam Electricity shall pay for electricity purchased from small power plants which are not affiliated to Vietnam Electricity and have capacities of 30 MW and below to The Power Corporations in accordance with the regulations of the Laws on finance, accouting and tax.
Article 11. Rules on adjustment of EVN electricity price
1. According to the method prescribed in Article 10 this Circular, the EVN electricity price in year N shall be adjusted in the following cases:a) An adjustment of average price is made;
b) The generation and sale of electricity of Vietnam Electricity or The Power Corporations in year N have big fluctuations. The adjustment must not be later than the first day of November of the year in which the electricity price is put into practice.
2. Vietnam Electricity shall develop a plan for EVN electricity price, then submit it to the Electricity Regulatory Authority in order for the Electricity Regulatory Authority to submit the price to The Ministry of Industry and Trade for approval before the adjustment.
Chapter V
IMPLEMENTATION
Article 12. Responsibilities of the Electricity Regulatory Authority
1. Take charge, cooperate with the relevant agencies in assessing the average price, then submit the assessment to The Ministry of Industry and Trade. i.e.
a) Consider approving the plan for adjusting electricity price if the average price needs to rise from 7% to below 10% and is in the prescribed bracket of electricity price after rising.
b) Consider and inform the Prime Minister of the cases that the average price needs to rise 10% and above or is out of prescribed bracket of electricity price after rising (after having assessment of the Ministry of Finance)
2. Assist Vietnam Electricity in developing the annual plan for the electricity generation and economic – technological criteria; Assess and then submit the assessment to The Ministry of Industry and Trade for approving such plans and criteria.
3. Carry out inspection and supervision within the competence of Vietnam Electricity in adjusting the electricity price and publishing the adjustment.
Article 13. Responsibilities of Vietnam Electricity
1. Adjust the electricity price as follows:
a) Raise the average price which is approved by The Ministry of Industry and Trade in the cases that it needs to be raised from 7% to below 10% and is in the prescribed bracket of price after rising.
b) Reduce the average price at a proper rate and notify The Ministry of Industry and Trade and the Ministry of Finance on the reduction in the cases that it needs to be lowered and is in the prescribed bracket of price after reducing.
2. Other responsibilities:
a) Develop a plan for the average price in year N and the EVN electricity price in year N-1 using the methods prescribed in this Circular after the final accounts of the electricity generation costs and the audited financial statement in year N-2 are made;
b) Develop a plan for adjusting the average price in year N and then submit it to The Ministry of Industry and Trade and the Ministry of Finance before the first day of November of the year N-1. The dossier of the application for the adjustment of electricity price shall include: Plan for adjusting the electricity price of Vietnam Electricity; Explanation of the plan according to the Appendix enclosed herewith; Audited financial statement in year N-2 and relevant figures and documents;
c) Develop the annual plan for electricity generation and economic – technological criteria then submit them to the competent authorities for approval;
d) Develop a method for determining the electricity production transmitted from the Vietnam Electricity to The Power Corporations, then submit it to the Electricity Regulatory Authority for approval;
dd) Make and keep records on the annual costs of electricity supply units in order to support the electricity price calculation;
e) Publish the adjustment of average price and its causes;
g) Instruct The Power Corporations in calculating the total cost of electric power distribution using the method prescribed in Chapter III of this Circular; Provide necessary figures, documents for the calculation and inspection of the annual average price, EVN electricity price; total cost of electric power distribution according to the regulations of this Circular; Keep records on the average prices on the electric power distribution – retail in order to support the calculation of the total cost of electric power distribution;
h) Instruct The Power Corporations in providing sending the schemes for improving the efficiency of the operation and management of the electric power distribution networks, the quality of electric power distribution and the quality of customer services which may cause the rise of electricity generation costs. Vietnam Electricity shall consider and submit the schemes to the Electricity Regulatory Authority in order for the Electricity Regulatory Authority to assess and request The Ministry of Industry and Trade for considering approving them.
Article 14. Effect
1. This Circular takes effect on May 15, 2014.
2. Difficulties that arise during the implementation of this Circular should be reported to the Ministry of Industry and Trade for consideration
| FOR THE MINISTER |
APPENDIX
THE EXPLANATION OF THE AVERAGE PRICE OF VIETNAM ELECTRICITY
(enclosed with the Circular 12 /2014/TT-BCT dated March 31, 2014 of the Minister of Industry and Trade on the calculation of the average retail price of electricity)
1. The explanation of the annual average price of Vietnam Electricity shall have the following contents:
a) Analysis and assessment of the electricity generation and sale in year N-2 and estimate figures in year N-1.
b) Calculation and explanation average price in year N, which include: Total cost of the generation and business of electricity in year N which is determined according to the method prescribed in this Circular; Estimated monthly electricity generation and electricity sold to the system of each power plan in year N; the energy loss at the phases of transmittal and electric power distribution – retail.
c) Input parameters used for determining average price in year N which include:
- Foreign exchange rates which are determined according to the daily average foreign exchange rates from the nearest adjustment day to the day on which the electricity price is set;
- Price of the fuels used for electricity generation in year N. With regard to the fuels of which the prices are adjusted according to the market price, the prices of the fuels used for electricity generation shall be the daily average price of the fuels from the latest date of the adjustment to the date of the proposal of the electricity price. In case the prices of the fuels used for electricity generation have been set by the competent State agencies, those prices shall be used.
- The electricity price of each power plant shall be the contractual price in the Power purchase agreements.
- The analysis and explanation of the expenditure limits and the unit price which are used for calculating the estimated expenditure in year N;
d) Explanation of the costs of the production and business of electricity which are not yet included in the electricity price being used and the remaining amount that shall be included in the electricity price in year N.
dd) Electricity price table in year N applied to groups of customers, analysis of the impact of new electricity price on each group of customers.
2. The explanation of the calculation of total cost of the electric power distribution of the Power Corporations which includes the following contents:
- The analysis and assessment of the generation and sale of The Power Corporations, achieved criteria for the commercial electricity generation, the average price, the energy loss, the number of customers; the costs incurred in year N-2, total cost up to Sep 30 of year N-1, and estimated total cost at the end of year N-1;
- The total value of assets serving the electricity generation incurred up to December 31 of year N-2, total value up to Sep 30 of year N-1, estimated total value at the end of year N-1, and estimated total value in year N;
- The calculations and explanations of the budget for purchasing new fixed assests supporting the electric power distribution – retail in the year for which the price is being calculated, the cost of depreciation for such assets in year N;
- The calculations and explanations of commercial electricity generation, the number of customer of the year for which the price is being calculated;
- The calculations and explanations of total cost of operation and maintenance in year N (
) of The Power Corporations which includes the costs of materials, salaries and expenditures classifed as salaries, customer development, major repairs, purchased services and other costs;
- The calculations and explanations of depreciation, interests on loans, exchange differences in year N-2, up to September 30 of the year N-1 and the estimate by the end of the year N-1; the estimate in year N;
- Lists of investment projects which are expected to be finished and commenced operation in year N-1, or shall be carried out in year N;
- Lists of fixed assets and the increased or decreased values thereof up to the end of the year N-1 and in each month of the year N;
- The summary of the fluctuations in the number of regular and permanent workers on the payroll of the Power Corporation and other units up to the end of the year N-1 and in the plan in year N;
- A statement on alternative materials which are in the store and planed for purchasing up to the end of the years N-1 and N;
- Lists of the major repairs in the years N-1 and N;
- A statement of long-term loans up to December 31 of the year N-2;
- The audited financial statement in year N-2 including the Balance sheet, the report on the production and sale, cash flow statement, explanations; a copy of administrative financial statement of the Power Corporations;
- Other tables instructed by the Electricity Regulatory Authority.
3. The calculation and explanation of the EVN electricity price (VND/kWh) shall include the following contents:
- The analysis and assessment of the criteria fulfillment of transmited electricity generation, the commercial electricity generation, the energy loss of the electric power distribution, the revenue in the years N-2 and N-1 of the Power Corporations;
- The calculation and explanation of transmitted electricity generation, commercial electricity generation, rate of energy of the electric power distribution estimated in year N of the Power Corporations;
- The calculation and explanation of the estimated revenue from electric power sale in year N of the Power Corporations; the average price used for calculating the estimated revenue from electric power sale in year N.
- The calculation and explanation of total cost of electrical distribution – retail of the Power Corporations in the years N-1 and N;
- The analysis and assessment of the adjustments of the EVN electricity price in year N-1;
- The calculated figures of the EVN electricity price and the difference between its planned figures and actual figures.
