Decision No. 24/2011/QD-TTg dated April 15, 2011 of the Prime Minister on the adjustment of electricity selling price according to market mechanism

DECISION

ON THE ADJUSTMENT OF ELECTRICITY SELLING PRICE ACCORDING TO MARKET MECHANISM

THE PRIME MINISTER

Pursuant to the Law on the Government Organization dated 12/25/2001;

Pursuant to the December 03, 2004 Law on Electricity; the August 17, 2005 Decree No.105/2005/ND-CP of the Government detailing and guiding the implementation of a number of articles of the Law on Electricity;

Pursuant to the April 26, 2002 Price Ordinance; the June 09, 2008 Decree No.75/2008/ND-CP of the Government providing for the modification, supplementation of a number of articles of the December 25, 2003 Decree No.170/2003/ND-CP of the Government detailing the implementing and supplementing of a number of articles of the Price Ordinance;

Pursuant to the February 24, 2011  Resolution No.11/NQ-the Government of the Government on main solutions focusing on containing inflation, stabilizing the macro economy, guaranteeing the social security;

At the proposal of Minister of Industry and Trade,

DECIDES:

Article 1. The scope of adjusting

This Decision provides for the adjustment of electricity selling price according to market mechanism.

Article 2. Subjects of application

This Decision is applied to the organizations, individuals who participate in activities of electricity and use electricity.

Article 3. Interpretation of terms

In this Decision, the hereinafter terms are construed as follows:

1. Average electricity selling price means the price is defined in accordance with principle of average calculation per 01 KWh of electricity, including 04 components: price of electricity generation, price of electricity transmission, price of electricity distribution, cost of management and administration and electricity system supporting services; hereinafter called as electricity selling price.

2. Current electricity selling price means the price being applied for use as a basis of the calculation to the next adjustment time.

3. Fund of electricity price stability means the fund is established in order to implement the aim of electricity price stability.

4. Basic input parameter means the elements directly influencing on the cost of electricity generationthatthe electricity generation organizations areunable to control, including: price of material, foreign exchange and structure of generation output.

Article 4. Principle for the adjustment of electricity selling price according to market mechanism

1. In the financial year, electricity selling price is adjusted just when the basic input parameter changing compared to the parameter which is used to define the current electricity selling price. Other input parameter of electricity selling price are considered to adjust electricity selling price only after having accounting, audit reports according to the provisions.

2. Duration for electricity selling price adjusting between the two consecutive times is at least 03 months.

3. The adjustment of electricity selling price according to marker mechanism must be implemented publicly, clearly. When necessary, the State uses the Fund of electricity price stability and other measures in order to stabilize electricity selling price aiming at the restriction of disadvantage impact on macro economy stability and social security.

Article 5. Mechanism and competence for the electricity selling price adjustment

1. In case material price, foreign exchange at the time of calculation changing compared to the parameter which is used to define the current electricity selling price and the structure of generation output changing compared to the plan of generation approved by the Ministry of Industry and Trade, leads to the electricity selling  price at the time of calculation reducing 5% or more compared to the current electricity selling price, the Vietnam Electricity Corporation shall decide to adjust to reduce the correlative electricity selling price, concurrently reports to the Ministry of Industry and Trade, the Ministry of Finance for supervision.

2. In case material price, foreign exchange at the time of calculation changing compared to the parameter which is used to define the current electricity selling price and the structure of generation output changing compared to the generation plan approved by the Ministry of Industry and Trade, leads to the electricity selling price at the time of calculation raising up to:

a) 5%, the Vietnam Electricity Corporation is entitled to adjustice to raise electricity selling price at the correlative rate after registering with and being approved by the Ministry of Industry and Trade. Within 05 working days, the Ministry of Industry and Trade is responsible for replying enabling the Vietnam Electricity Corporation to deploy the implementation. If after longer than 05 working days but the Ministry of Industry and Trade has not replied yet, the Vietnam Electricity Corporation is entitled to adjust to raise 5% of the electricity selling price and report to the Ministry of Industry and Trade, the Ministry of Finance for the supervision.

b) Over 5%, the Vietnam Electricity Corporation reports to the Ministry of Industry and Trade and send to the Ministry of Finance for appraisal. Within 05 working days since the date of receiving the statement of the Vietnam Electricity Corporation, the Ministry of Finance is responsible for appraising and sending its appraisal opinion to the Ministry of Industry and Trade. The Ministry of Industry and Trade is responsible for the synthesis and submission to the Prime Minister for consideration, approval after 05 working days since the date of receipt of the Ministry of Finance’s appraisal opinion.

After 15 working days since the date of submission to the Prime Minister by the Ministry of Industry and Trade but has not yet replied, the Vietnam Electricity Corporation is permitted to adjust electricity selling  price at the rate of 5%.

3. Annually, after having independent audit, accounting report according to provisions, the Vietnam Electricity Corporation reports to the Ministry of Industry and Trade, the Ministry of Finance the cost price of electricity business production of phases of generation, electricity transmission, electricity distribution, management-administration and electricity system supporting services and the electricity selling price of the financial year.

4. Based on the accounting, audit data and result of implementing technical-economic norms of the Vietnam Electricity Corporation, the Ministry of Industry and Trade presides over, coordinates with the Ministry of Finance for the inspection, definition of the cost of electricity business, production of the financial year and public promulgation of implementation result. On the basis of such data, the Ministry of Industry and Trade presides over, coordinates with the Ministry of Finance for the decision on the adjustment of electricity selling price and deduction for the Fund of electricity price stability according to the provisions. In case of exceeding its powers, must report to the Prime Minister.

Article 6. Fund of electricity price stability

1. Fund of electricity price stability is established for the implementation of the aim of electricity price stability.

2. The source of establishing the Fund of electricity price stability is deducted from the electricity selling price and is calculated to the electricity business, production expenditure.

Article 7. Inspection, supervision of the implementation of the electricity selling price adjustment

1. The Ministry of Industry and Trade inspects, supervises the implementation of electricity selling price adjusting. When considered necessary, the Ministry of Industry and Trade issues written request to the Vietnam Electricity Corporation for temporarily suspension of raising electricity selling price or the adjustment for the next adjustment time. The Ministry of Industry and Trade is entitled to invite independent advisory for the appraisal of dossier of electricity selling price adjustment.

2. The Ministry of Finance supervises the implementation of electricity selling price adjustment; to joint in, coordinate with the Ministry of Industry and Trade to inspect the difference of regular, suitable cost compared to calculated data in the project of electricity selling price after having accounting, audit data.

Article 8. Implementation organization

1. The Ministry of Industry and Trade is responsible for:

a) Guiding the implementation of detail electricity selling price index to the group of client objects.

b) Approving plan of producing electricity and annual technical-economic norms.

c) Presiding over, coordination with the Ministry of Finance providing for the costs of management and administration and electricity system supporting services; publicizing cost of annual electricity business, production.

d) Management according to its power the difficulties in the process of setting up, adjusting and implementing electricity selling price.

đ) Guiding the electricity selling price calculation according to basic input parameter.

e) Guiding to compile, approve dossier of electricity selling price calculation, adjustment.

g) Issuing other necessary instructions for the implementation of this Decision.

2. The Ministry of Finance is responsible for:

a) Presiding over coordination with the Ministry of Industry and Trade guiding mechanism of establishment, management and the usage of Fund of electricity price stability.

b) Appraising scheme of electricity selling price adjusting according to provisions in Article 5 of this Decision.

3. Vietnam Electricity Corporation is responsible for:

a) Implementing the adjustment of electricity selling price according to the right power and in compliance with the provisions in clause 1 Article 5, point a clause 2 Article 5 of this Decision.

b) Reporting to the Ministry of Industry and Trade for the submission to the Prime Minister the adjustment of electricity selling  price according to provision in clause 2 Article 5 of this Decision.

c) Reporting to the Ministry of Industry and Trade, the Ministry of Finance on the cost of electricity business production, the electricity selling  price according to provision in clause 3 Article 5 of this Decision.

Article 9. Effect of implementing

1. This Decision takes effect on June 01, 2011.

2. Any organizations, individuals have acts violating of provisions of this Decision, depending on the nature and seriousness of their violations, are sanctioned according to provisions on sanction of law violation in the field of electricity or examined for penal liability under regulations of law.

3. The Ministers, Heads of Ministerial-level agencies, Heads of Governmental agencies, Heads of power units and relative organizations are responsibility for the implementation of this Decision.