Circular No. 25/2018/TT-BCT dated September 12, 2018 on amending and supplementing a number of articles of the Minister of Industry and Trade’s Circular No. 16/2014/TT-BCT of May 29, 2014, prescribing the implementation of regulations on electricity prices

CIRCULAR

Amending and supplementing a number of articles of the Minister of Industry and Trade’s Circular No. 16/2014/TT-BCT of May 29, 2014, prescribing the implementation of regulations on electricity prices^[1]

Pursuant to the Government’s Decree No. 98/2017/ND-CP of August 18, 2017, defining the functions, tasks, powers and organizational structure of the Ministry of Industry and Trade;

Pursuant to the December 3, 2004 Electricity Law and the November 20, 2012 Law Amending and Supplementing a Number of Articles of the Electricity Law;

Pursuant to the Government’s Decree No. 137/2013/ND-CP of October 21, 2013, detailing a number of articles of the Electricity Law and the Law Amending and Supplementing a Number of Articles of the Electricity Law;

Pursuant to the Prime Minister’s Decision No. 24/2017/QD-TTg of June 30, 2017, prescribing the mechanism for adjustment of the average retail electricity price;

Pursuant to the Prime Minister’s Decision No. 28/2014/QD-TTg of April 7, 2014, prescribing the structure of the retail electricity tariff;

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

The Minister of Industry and Trade promulgates the Circular amending and supplementing a number of articles of the Minister of Industry and Trade’s Circular No. 16/2014/TT-BCT of May 29, 2014, prescribing the implementation of regulations on electricity prices.

Article 1.To amend and supplement a number of articles of the Minister of Industry and Trade’s Circular No. 16/2014/TT-BCT of May 29, 2014, prescribing the implementation of regulations on electricity prices (below referred to as Circular No. 16/2014/TT-BCT) as follows:

1. To add Point c, Clause 2, Article 3 as follows:

“c/ In case owners of urban center and apartment building projects have handed over houses to their customers but not yet carried out asset finalization procedures to hand over power grids to the electricity sector for management: Pending the handover of power grids and electricity users, electricity buyers and sellers shall base themselves on the actual state of electricity use to reach agreement on  the ratio between the amount of electricity to be applied with the residential retail price and that to be applied with non-residential retail prices (for production, business, and administrative and non-business units) which will serve as a basis for application of electricity prices. For electricity used for residential purpose, the selling price applicable to the electricity buyer shall be determined in adherence to the principle that the electricity consumption limit applicable to the buyer shall be equal the electricity consumption limit at each level multiplied by the number of households using electricity for residential purpose (based on the actual electricity use purposes, house purchase and sale contracts, apartment handover records, household registration books, temporary residence books or documents certifying temporary residence issued by local public security agencies).”

2. To amend the title of Article 6 and add Clause 1a prior to Clause 1 of Article 6 as follows:

“Article 6. Principles for determination of wholesale electricity prices and conditions for application of wholesale electricity prices

1a. Principles for determination of wholesale electricity prices

When the retail price of electricity is adjusted, the wholesale electricity price applicable to each retailer shall be adjusted by multiplying the current wholesale price discount rate by the planned increase rate of the consumer price index (CPI) promulgated by the National Assembly in the year of adjustment. The Ministry of Industry and Trade shall guide the determination of specific wholesale price discount rates applicable to new wholesale buyers for which wholesale price discount rates have not been determined.”

3. To amend Clause 1, Article 12 as follows:

“1. The rural wholesale electricity price shall be applied to retailers in rural areas (except those prescribed in Articles 13, 14 and 15 of Circular No. 16/2014/TT-BCT and Clause 4, Article 1 of this Circular) for the amount of electricity bought at the wholesale price and measured at the general electric meters installed in transformer stations, regardless of whether such transformer stations belong to the seller or the buyer.”

4. To add Article 15a to Article 15 as follows:

“Article 15a. Wholesale electricity prices for marketplaces

1. The wholesale electricity price for markets shall be applied to electricity retailers at marketplaces meeting the criteria prescribed in the Government’s Decree No. 02/2003/ND-CP of January 14, 2013, on marketplace development and management, and Decree No. 114/2009/ND-CP of December 23, 2009, amending and supplementing a number of articles of the Government’s Decree No. 02/2003/ND-CP of January 14, 2013, on marketplace development and management (regardless of geographical locations of marketplaces).

2. Electricity retailers at marketplaces are not subject to both voltage-based electricity price prescribed in Article 4 of Circular No. 16/2014/TT-BCT and time-based electricity price prescribed in Article 5 of Circular No. 16/2014/TT-BCT.

3. The wholesale electricity price applicable to marketplaces is the retail price of electricity for business purposes during standard hours at under-6kV voltage prescribed in Article 8 of Circular No. 16/2014/TT-BCT, with a discount rate of 10.6%.”

5. To amend Point c, Clause 4, Article 10 as follows:

“c/ In case tenants are students or laborers (other than households):

- In case tenants have signed lease agreements of a term of 12 months or more and made temporary residence registration, the house owner shall directly sign electricity purchase and sale contracts or represent the tenants to sign electricity purchase and sale contracts (containing the house owner’s commitment to paying electricity bills).

- In case the lease term is less than 12 months and the house owner cannot fully declare the number of electricity users, the level-3 retail price applicable to the amount of electricity of between 101-200 kWh shall be applied for the whole amount of electricity measured at the electricity meter.

In case the house owner fully declares the number of electricity users, the electricity seller shall, based on temporary residence books or documents certifying temporary residence issued by the local public security agency, determine an electricity consumption limit to be applied to the house owner as follows: every 4 persons shall be grouped as a household for application of the residential retail electricity price of whom 1 person will enjoy a fourth of the limit; 2 persons, half of the limit; 3 persons, three-fourths of the limit; and 4 persons, the whole limit. The house owner shall notify the electriciy buyer of any change in the number of tenants for the latter to adjust to the electricity consumption limit.

When calculating monthly electricity bills, the electricity seller may inspect and request the buyer to present monthly temporary residence books so as to determine the number of tenants used for identification of the electricity consumption limit.”

6. To add Clause 9, Article 10 as follows:

“9. In case a house owner declares the number of electricity users in order to enjoy a higher residential electricity consumpion limit, the electricity seller may request compensation and impose a fine for breach of contract as prescribed in the Ministry of Industry and Trade’s Circular No. 27/2013/TT-BCT of October 31, 2013, on inspection of electricity activities, electricity use and settlement of disputes over electricity purchase and sale contracts, or documents amending, supplementing and replacing such circular.”

Article 2.Effect

1. This Circular takes effect on October 26, 2018.

2. Any problems arising in the course of implementation should be reported to the Electricity Regulatory Authority of Vietnam for consideration and settlement according to its competence or reporting to the Ministry of Industry and Trade for settlement.-

Ministry of Industry and Trade
TRAN TUAN ANH