Circular No. 23/2020/TT-BCT dated September 9, 2020 on expenditure on power cut and resupply and determination method thereof

CIRCULAR

EXPENDITURE ON POWER CUT AND RESUPPLY AND DETERMINATION METHOD THEREOF

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

Pursuant to Law on Electricity dated December 3, 2004 and Law on amendments to Law on Electricity dated November 20, 2012;

Pursuant to Decree No. 137/2013/ND-CP dated October 21, 2013 of the Government on elaborating to Law on Electricity and Law on amendments to Law on Electricity;

At request of Director General of Electricity Regulatory Authority of Vietnam;

Minister of Industry and Trade promulgates Circular on expenditure on power cut and resupply and determination method thereof.

Chapter I

GENERAL PROVISIONS

Article 1. Scope

This Circular prescribes expenditure for power cut and resupply and determination methods thereof to be paid by relevant organizations and individual to electricity sellers to implement power cut and resupply in following cases:

1. Non-emergency power cut or reduction includes:

a) Power cut at request of relevant organizations and individuals in order to ensure safety during construction progress;

b) Power cut and reduction at request of the Buyers.

2. Power cut conducted by the Sellers for organizations and individuals violating regulations and law as specified under Regulations on conditions and procedures for cutting and reducing power supply issued by Minister of Industry and Trade.

Article 2. Regulated entities

1. The Seller.

2. The Buyers request the Sellers to cut power.

3. Organizations and individuals request the Sellers to cut power in some cases to ensure safety in construction process.

4. Organizations and individuals violating regulations and law have their power cut by the Sellers as specified under Regulations on conditions and procedures for cutting and reducing power supply issued by Minister of Industry and Trade.

5. Vietnam Electricity Group.

Article 3. Term interpretation

In this Circular, terms below are construed as follows:

1. “the Sellers” refer to electricity entities that cut and resupply power, including: Electricity suppliers, Electricity suppliers and retailers.

2. “the Buyers” refer to organizations and individuals that buy electricity to use or retail to end users, including:

a) Electricity suppliers and retailers;

b) End users.

3. “electricity suppliers” refer to electricity entities licensed for electricity supply and sale, including:

a) Power corporations;

b) Power companies of provinces and central-affiliated cities (hereinafter collectively refer to as “provincial power companies”) affiliated to power corporations;

c) Power companies of districts affiliated to Hanoi Power Corporation or Ho Chi Minh Power Corporation.

4. “power suppliers and retailers” refer to power entities licensed for supplying and retailing electricity, buying electricity from electricity suppliers and retailing electricity for end users.

Article 4. Collection and accounting of expenditure of power cut and resupply

1. The Sellers may collect expenditure on power cut or resupply as specified under this Circular. This expenditure is to compensate the Sellers for power cut and resupply. The collected expenditure on power cut and resupply shall be accounted for in revenues of the Sellers (other business revenues) and taxed as per the law.

2. Expenditure on power cut and resupply shall be collected in following manner:

a) Before cutting power for entities specified under Clause 2 and Clause 3 Article 2 of this Circular;

b) Before resupplying power for entities specified under Clause 4 Article 2 of this Circular.

Chapter II

EXPENDITURE ON POWER CUT AND RESUPPLY AND DETERMINATION METHOD THEREOF

Article 5. Principles of calculating expenditure on power cut and resupply

1. Formula for a single instance of power cut and resupply is:

T = M x k x n

In which:

- T: Amount of money permitted for collection for power cut or resupply;

- M: Expenditure on local power cut and resupply specified under Article 6 of this Circular;

- k: Adjustable distance coefficient under Article 7 of this Circular;

- n: Adjustable region coefficient under Article 8 of this Circular.

2. Expenditure on a single instance of power cut or resupply in this Article does not include VAT.

Article 6. Base expenditure on power cut and resupply (M)

1. Formula for base expenditure on power cut and resupply (M)

Base expenditure on power cut and resupply (M) refers to expenditure on a single instance of power cut or resupply in plains with distance from offices of entities that cut or resupply power of areas subject to the cut or resupply no more than 5 km and shall be determined by following formula:

M = Labor cost + Transportation cost

In which:

- Labor cost shall be calculated based on: Statutory pay rate of Vietnam Electricity for 1 working day, salary multiplier for worker level, allowance multiplier for mobile jobs and unit price for 1 instance of power cut based on different levels of voltage;

- Transportation cost: Refers to transportation cost for a single instance of power cut or resupply in plains with distance from offices of entities that cut or resupply power of areas subject to the cut or resupply no more than 5 km.

2. Base expenditure on power cut and resupply (M) is regulated as follow:

a) In areas with voltage no more than 0.38 kV: M = VND 98,000;

b) In areas with voltage ranging from exceeding 0.38 kV to 35 kV: M = VND 231,000;

c) In areas with voltage exceeding 35 kV: M = VND 339,000.

Article 7. Adjustable distance coefficient (k)

1. Adjustable distance coefficient (k) shall be identified based on the distance from head offices of entities that cut or supply power to location where the power cut or resupply is implemented.

2. With respect to customers using electricity for domestic purposes, adjustable region coefficient shall equal 1 and not depend on distance from head offices of entities that cut or supply power to location where the power cut or resupply is implemented.

3. With respect to customers using electricity for purposes other than domestic and organizations and individuals requesting power cut, adjustable distance coefficient shall be as follow:

a) Up to 5 km: k = 1;

b) From exceeding 5 km to 10 km: k = 1.14;

c) From exceeding 10 km to 20 km: k = 1.28;

d) From exceeding 20 km to 30 km: k = 1.42;

dd) From exceeding 30 km to 50 km: k = 1.56;

e) Exceeding 50 km: k = 1.70.

Article 8. Adjustable region coefficient (n)

1. Adjustable region coefficient (n) shall be determined based on areas where the power cut or resupply is implemented.

2. With respect to customers using electricity for domestic purposes, region coefficient shall equal 1 regardless of plains, mountainous regions or islands.

3. With respect to customers using electricity for purposes other than domestic and organizations and individuals requesting power cut, adjustable region coefficient shall be as follow:

a) In plains: n = 1;

b) In mountainous regions and islands: n = 1.15.

Chapter III

IMPLEMENTATION

Article 9. Implementation

1. Electricity Regulatory Authority of Vietnam is responsible for publicizing, providing guidelines and inspecting implementation of this Circular.

2. In case of any change to salary policies which causes expenditure on power cut and resupply to change by at least 30% compared to current values, Vietnam Electricity is responsible for updating, recalculating expenditure on power cut and resupply as specified under Chapter II of this Circular, reporting to Electricity Regulatory Authority for research and requesting Minister of Industry and Trade to revise expenditure on power cut and resupply accordingly.

Article 10. Entry into force

1. This Circular comes into effect from October 30, 2020. Circular No. 25/2014/TT-BCT dated August 6, 2014 of Minister of Industry and Trade on methods of determining expenditure on power cut and resupply shall expire from the effective date of this Circular.

2. Difficulties that arise during implementation of this Circular should be reported to Electricity Regulatory Authority for consideration, research and presentation to Minister of Industry and Trade for appropriate amendments./.