Decision No. 69/2013/QD-TTg dated November 19, 2013 of the Prime Minister on the mechanism for adjustment of the average electricity retail price levels

THE PRIME MINISTER 

Decision No.69/2013/QD-TTg dated November 19, 2013 of the Prime Minister on the mechanism for adjustment of the average electricity retail price levels

Pursuant to the December 25, 2001 Law on Organization of Government;

Pursuant to the December 03, 2004 Electricity Law; the November 20, 2012 Law amending and supplementing a number of articles of the Electricity Law;

Pursuant to the June 20, 2012 Price Law;

Pursuant to the Government’s Decree No. 137/2013/ND-CP dated October 21, 2013, detailing implementation of 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 Government’s Decree No. 177/2013/ND-CP dated November 14, 2013, detailing and guiding implementation of a number of Articles of the Price Law;

At the proposal of the Minister of Industry and Trade;

The Prime Minister promulgates Decision on the mechanism for adjustment of the average electricity retail price levels,

Article 1. Scope of regulation and subjects of application

1. This Decision stipulates the mechanism for adjustment of the average electricity retail price levels.

2. This Decision applies to organizations and individuals who participate in activities of electricity and use electricity.

Article 2. Interpretation of terms

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

1. An average electricity retail price level means a specific price level within the price bracket of the average electricity retail price levels defined by the Prime Minister (hereinafter abbreviated as average electricity selling price).

2.A basic average electricity selling pricemeans a planned average electricity selling price which is formulated annually on the basis of the cost for electricity production and business and the rational profit of four stages including: Power generation, power transmission, electricity distribution and retail, administration and management, and auxiliary services of electrical system. The basic average electricity selling price is used for reference in calculation for adjustment of the average electricity selling price according to the basic input parameters in year.

3.A competitive generation market pricemeans a price defined on competitive generation market according to the principles and regulations on controlling the competitive generation market promulgated by competent agencies.

4.A price bracket of average electricity retail price levelmeans a distance between the minimum price level and the maximum price level of average electricity retail price level (hereinafter abbreviated as price bracket).

5.Basic input parametersmean the elements directly influencing on the cost of electricity generationthatthe electricity units areunable to control, including: price of material, foreign exchange, structure of generation output and prices of competitive generation market.

Article 3. Principle for the adjustment of average electricity selling price

1. In fiscal year, average electricity selling price is considered to adjust when basic input parameters change in comparison to the parameters which have been used to define the basic average electricity selling price. Other input parameters are considered to adjust average electricity selling price only after having settlement statements, audit reports as prescribed at Clause 4 Article 4 of this Decision.

2. Average electricity selling price is adjusted within the price bracket specified by the Prime Minister and only adjusted to increase at level of 7% or more in comparison with the current average electricity price. Duration for adjusting average electricity selling prices between the two consecutive times is at least 06 months.

3. The adjustment of average electricity selling prices must be implemented publicly and transparently. As necessary, the State uses the Fund of electricity price stability and other measures in accordance with regulations in order to stabilize electricity selling price aiming to minimize disadvantage impacts on the macro economy stability and social security.

Article 4. Mechanism for adjustment of electricity selling price

1. In case where the basic input parameters at time of calculation changed in comparison to the used parameters for defining the basic average electricity selling price which makes the basic average electricity selling price updated at time of calculation lower than the current average material price and prices in price bracket (after having deducted from Fund for electricity price stability), the Vietnam Electricity Corporation shall adjust to reduce the average electricity selling price at a respective level, report to the Ministry of Industry and Trade and the Ministry of Finance.

2. In case where the basic input parameters at time of calculation changed in comparison to the used parameters for defining the basic average electricity selling price which makes the basic average electricity selling price updated at time of calculation higher than the current average electricity selling price (after having deducted from Fund for electricity price stability) at levels:

a) From 7% and less than 10% and in the set price bracket, the Vietnam Electricity Corporation is permitted to increase the average electricity selling price at respective levels after reporting and being accepted by the Ministry of Industry and Trade. Within 10 working days, the Ministry of Industry and Trade shall reply the Vietnam Electricity Corporation for implementation. After adjustment, the Vietnam Electricity Corporation is responsible for reporting to the Ministry of Industry and Trade, and the Ministry of Finance.

b) From 10% or more or if the average electricity selling price calculated after adjustment is beyond the set price bracket, the Vietnam Electricity Corporation shall make a dossier of price plan, report to the Ministry of Industry and Trade and send it to the Ministry of Finance for appraisal. Within 10 working days after receiving full dossier of price plan from the Vietnam Electricity Corporation, the Ministry of Finance shall appraise and send the appraisal opinion in writing to the Ministry of Industry and Trade. Within 10 working days after receiving the appraisal opinion of the Ministry of Finance, the Ministry of Industry and Trade shall sum up and submit to the Prime Minister for consideration and directions.

3. Annually, after having the settlement statements of cost and cost price of electricity production and business, financial statements audited independently of the Vietnam Electricity Corporation and member units, the Ministry of Industry and Trade shall assume the prime responsibility for, and coordinate with the Ministry of Finance in examining, calculating the cost price of electricity production and business of stages including electricity generation, electricity transmission, electricity distribution and retail, administration – management and auxiliary services of electrical system, the average electricity selling price of the financial year.

4. Annually, the Vietnam Electricity Corporation shall formulate plan of electricity selling price to submit to the Ministry of Industry and Trade, and the Ministry of Finance. Based on results of examination, calculation of the cost price of electricity production and business in financial year as prescribed at Clause 3 of this Article, situation of electricity production and business of the Vietnam Electricity Corporation and economic - social conditions, the Ministry of Industry and Trade shall assume the prime responsibility for, and coordinate with the Ministry of Finance in considering the plan of average electricity selling price, specified as follows:

a) If the average electricity selling price needs to adjust to lower than the current average electricity selling price and in the set price bracket, the Vietnam Electricity Corporation will reduce the average electricity selling price at the respective level and report to the Ministry of Industry and Trade and the Ministry of Finance.

b) If the average electricity selling price which needs adjust, increases from 7% to less than10% in comparison to the current average electricity selling price and in the set price bracket, the Vietnam Electricity Corporation is permitted to adjust the average electricity selling price at the respective level and having acceptance of the Ministry of Industry and Trade.

c) If the average electricity selling price which needs adjust, increases 10% or more in comparison to the current average electricity selling price and beyond the set price bracket, the Ministry of Industry and Trade will report to the Prime Minister after having the appraisal opinion of the Ministry of Finance.

Article 5. Examination and supervision over adjustment of average electricity selling price

1.The Ministry of Industry and Trade shall examine and supervise over adjustment of average electricity selling price. As necessary, the Ministry of Industry and Trade shall request in writing to the Vietnam Electricity Corporation for reducing or stopping increase of the average electricity selling price. The Ministry of Industry and Trade is permitted to ask an independent advisor for appraising dossier of adjusting the average electricity selling price.

2. The Ministry of Finance shall coordinate to examine adjustment of the average electricity selling price; participate in and coordinate with the Ministry of Industry and Trade in examining differences of rational and regular costs in comparison to the figures calculated in plan of electricity selling price after having figures of settlement statements, audit reports.

3. The Ministry of Industry and Trade shall assume the prime responsibility for, and coordinate with the Ministry of Finance in examining, calculating the cost price of electricity production and business of the financial year and announce publicly the cost price of electricity production and business at stages of electricity generation, electricity transmission, electricity distribution and retail, administration – management and auxiliary services of electrical system; situation of loss, profit of the Vietnam Electricity Corporation and costs which have not yet included in the cost price of electricity production and business. The Vietnam Electricity Corporation shall announce publicly the adjustment of average electricity retail price and reason thereof.

Article 6. Organization of implementation

1. The Ministry of Industry and Trade shall:

a) Guide calculation of the average electricity selling price according to the basic input parameters, the annual basic average electricity selling price;

b) Approve the annual plan of electricity supply and operating electrical system, annual economic-technical norms;

c) Guide calculation of average electricity selling price after examination, calculation and announcement of the annual cost price of electricity production and trade;

d) Promulgate other necessary regulations to implement this Decision.

2. The Ministry of Finance shall:

a) To appraise plan of adjusting average electricity selling price as prescribed at Point b Clause 2 and Point c Clause 4 Article 4 of this Decision;

b) Assume the prime responsibility for, and coordinate with the Ministry of Industry and Trade and relevant agencies in guiding the setting up, management and use of Fund for electricity price stability.

3. The Vietnam Electricity Corporation shall:

a) Formulate the basic average electricity selling price to submit to the Ministry of Industry and Trade for the approval before December 20 of every year;

b) Report to the Ministry of Industry and Trade, the Ministry of Finance about cost price of electricity production and trade, average electricity selling price as prescribed at Clause 3 Article 4 of this Decision before June 01 every year;

c) Implement the adjustment of average electricity selling price and report in accordance with regulations.

Article 7. Effect

1.This Decision takes effect on January 10, 2014; the Decision No. 24/2011/QD-TTg dated April 15, 2011, of the Prime Minister, on adjustment of electricity selling price according to the market mechanism will cease to be effective on the effective date of this Decision.

2. Ministers, Heads of ministerial-level agencies, Heads of Governmental agencies, Chairpersons of People’s Committees of provinces and central-affiliated cities, the Vietnam Electricity Corporation and relevant organizations and individuals shall implement this Decision.

The Prime Minister

Nguyen Tan Dung