THE PRIME MINISTER
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SOCIALIST REPUBLIC OF VIET NAM
Independence - Freedom - Happiness
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No. 21/2009/QD-TTg
Hanoi, February 12, 2009
 
DECISION
ON ELECTRICITY SALE PRICES IN 2009 AND DURING 2010-2012 UNDER THE MARKET MECHANISM
THE PRIME MINISTER
Pursuant to the December 25,. 2001 Law on Organization of the Government;
Pursuant to the December 3, 2004 Law on Electricity and the Government's Decree No. 105/2005/ND-CP of August 17, 2005, detailing and guiding the implementation of a number of articles of the Law on Electricity;
Pursuant to the April 26, 2002 Ordinance on Prices, the Government's Decree No. 170/2003/ND-CP of December 25, 2003, detailing the implementation of a number of articles of the Ordinance on Prices, and Decree No. 75/2008/ND-CP of June 9, 2008, amending and supplementing a number of articles of the Government's Decree No. 170/2003/ND-CP of December 25, 2003, detailing the implementation of a number of articles of the Ordinance on Prices;
At the proposal of the Minister of Industry and Trade,
DECIDES:
Article 1. To approve electricity sale prices in 2009 and during 2010-2012 under the market mechanism, with the following principal contents:
1. From March 1, 2009, the average retail price of electricity is VND 948.5/kWh, exclusive of value-added tax (8.92% higher than the average electricity price in 2008).
2. From January 1, 2010, electricity sale prices shall accord with market prices.
Article 2. To approve the following principles for adjusting the electricity retail price bracket:
1. In 2009:
a/ To adjust the progressive prices of daily-life electricity with the first grade of 1-50 kWh. The level of price subsidy for the grade of 1-50 kWh is equal to 35-40% of the average sale price of electricity in 2009. The price of electricity al the grade of between 51-100 kWh is equal to the average cost price without profits.
b/ To increase production electricity prices at rates lower than the average increase rate of the electricity sale price while increasing daily-life electricity prices at rates higher than the average increase rate of the electricity sale price in order to step by step eliminate cross-subsidy from production electricity prices to daily-life electricity prices and provide electricity price subsidies to eligible beneficiaries which are low-income households and poor households.
c/ To apply a progressive price bracket for daily-life electricity sold in rural areas by all types of rural daily-life electricity retail business organizations so as to implement the Government's policy on electricity price subsidies for eligible beneficiaries which are low-income households and poor households. The wholesale price of electricity at each grade is equal to the retail price applicable to this grade minus 25%-30% for electricity loss and reasonable expenses for management of operation of rural electricity grids.
d/ To apply the time-of-use (TOU) price bracket to high- and medium-voltage electricity customers and low-voltage electricity customers in localities where technical conditions permit.
e/ To apply common electricity sale prices nationwide to all customers in regions covered by the national electricity grid.
2. From 2010 on, to study and make the following adjustments:
a/ To apply two-constituent prices, including capacity price and electricity price, to appropriate subjects in localities where technical conditions permit.
b/ To provide price subsidies to poor households and low-income households that use under 50 kWh per month through directly reducing their monthly electricity bills (in localities where technical conditions permit). The price of electricity at the grade of 51-100 kWh shall be kept at the average cost price without profits.
c/ To step by step apply a ceiling electricity retail prices to customers being production and service businesses; permit electricity companies to sell electricity to customers at prices lower than the prescribed ceiling price as agreed upon with customers depending on the consumption volume under the guidance of electricity regulatory authorities. Particularly, daily-life electricity prices in regions covered by the national electricity grid shall still apply nationwide as prescribed by the State.
Article 3. To approve the mechanism for adjusting electricity prices according to market prices
1. Annually, the Ministry of Industry and Trade shall, based on production and business activities of the electricity industry and the market price levels, coordinate with the Ministry of Finance in deciding to adjust (increase or decrease) electricity prices according to the market mechanism.