Socialist Republic of Vietnam

DECREE OF THE GOVERNMENT
on Electricity Activities and Electricity Utilisation
No. 45/2001/ND-CP, Hanoi, 2 August 2001

THE GOVERNMENT

- Pursuant to the Law on Government Organisation dated 30 September 1992;

- At the proposal of the Minister of Industry,

DECREES

Chapter I

GENERAL PROVISIONS

Article 1. Electric energy is special good. The State consistently manages electricity activities and electricity utilisation nationwide by the means of law, policy, electricity development master plan. Conducting business in electricity is a conditional business.

Article 2. This Decree stipulates the electricity activities and electricity utilisation, applicable to all local and foreign organisations, individuals in the Socialist Republic of Vietnam, unless it is otherwise required by an International Convention to which the Socialist Republic of Vietnam is a signatory or participant.

Article 3.

1. Organisations, individuals conducting business in electricity must have electricity licences (electricity licences) if the business involves in the following areas:

a. Consulting in planning and designing electricity facilities;

b. Producing, transmitting, distributing, trading and supplying electricity;

2. The authorities that are competent to issue electricity licences shall be specified as follows:

a. The Ministry of Industry shall issue electricity licences:

- Organisations that conduct consulting business in planning, designing, supervising and other consulting forms for electricity facilities and works;

- Enterprises under state-owned national corporations and foreign-invested enterprises that produce, transmit, distribute, trade and supply electricity;

- Enterprises that produce electricity with capacity supply of 10MW upwards and enterprises that manage and operate power transmissions with voltage of 110kV upwards;

- Enterprises that import and export electricity.

b. People’s committees of provinces or cities under the central government shall issue operation electricity licences for foreign organisations and individuals apart from the organisations specified under item a) that have electricity activities in areas specified under Clause 1 of this Article.

3. Organisations or individuals investing and constructing power supply facilities for their own use and not selling electricity to other organisations, individuals or power supply facilities that have installation capacity lower than that required by the Ministry of Industry shall not require electricity licences.

4. The Ministry of Industry shall provide guidelines on conditions, steps and procedures of issuance of electricity licences.
Article 4. Electricity activities and electricity utilisation in the territories of Vietnam shall be carried out according to regulations of this Decree and other relevant regulations in the meantime in compliance with procedures, principles, economic, technical and environmental standards issued by relevant State authorities.

Article 5.

1. Electricity utilisation must be for the correct purposes stated under contracts. In case electricity is used as protection means, approval from the relevant State authority must be obtained. The Ministry of Industry shall have particular provisions on this kind of electricity utilisation.

2. Using electricity to cause danger for human being, animals, State assets, people’s assets, or cause bad impact to the ecological environment are strictly forbidden.

Article 6. Based on the importance towards the nation and society, organisations, individuals utilising electricity shall be classified in order of priority for the purpose of control and minimising load curve in case of power shortage. People’s committees of provinces, cities under the central government will identify the order of priority applicable to organisations, individuals using electricity in their localities and notify the provincial, city power management authority and the localities for implementing.

Article 7. In this Decree, the following terms shall be interpreted as follows:

1. “Electricity Activities” means activities that produce, maintain and supply power and energy to organisations or individuals for their use in the commercial form or other forms specified by the Government including activities on planning, consulting on design, construction investment, production, transmission, dispatch of power system, distribution, trade and supply of electricity including export and import of electric energy.

2. “Electricity Utilisation” means process of electricity utilisation for certain purposes.

3. “Power Industry” means the combination of organisations, individuals of all economic sectors which conduct electricity activities in the territories of Vietnam.

4. “The National Power System” means the combination of material and technical facilities that relate to each other in order to produce, transmit, distribute, control, supply power and that is assigned by the State to the management of the Electricity of Vietnam.

5. “Electricity facilities” means the combination of construction projects and structures, equipment to generate, transmit and distribute electric energy. Electricity facilities consist of power plants and stations, transforming stations, power transmission lines and associated equipment.

6. “Electricity Production” means activities of management and operation of power generation factories and stations for producing of electric energy meeting the required standards.

7. “Commercial Electricity Production” means the production activities of a power plant after its test operation and official supply of electricity to the buyer.

8. “Power Transmission” means activities of management, operation of electricity facilities in order to transmit electric energy from the production place to the distribution network.

9. “National Power Transmission Net” means the power transmission net that is under the management of the Electricity of Vietnam as assigned by the State.

10. “Power Transmission Net outside the National Power System” means the power transmission net which are invested and managed by other economic organisations [than EVN] and which can operate independently or can be connected to the national power transmission net.

11. “Power Distribution” means the management and operation of electricity facilities to transmit electric energy from the transmission net to users which are organisations and individuals.

12. “Power Supply” means the process of satisfying electricity needs under certain conditions to organisations and individuals that have requirement to utilise electricity.

13. “Independent Power Source and Power Net” means facilities that produce, transmit, distribute, supply electricity to private areas, are managed and operated independently and can either be connected or not be connected to the national power system.

Chapter II

PLANNING, INVESTMENT AND DEVELOPMENT
OF ELECTRICITY

Section 1

PLANNING AND DEVELOPMENT OF ELECTRICITY

Article 8.

1. The Ministry of Industry shall organise and prepare master plan to develop the national electricity for each 10-year period, and plan for the next 10 years and submit the same to the Prime Minister for his approval, and manage and implement the master plan that has been approved.
In case it is required to amend the power development plan that has been approved, the Ministry of Industry shall submit [the proposed amendment] to the Prime Minister for his consideration and approval.

2. The Ministry of Industry shall stipulate the content, process and procedures of construction of the national electricity development master plan.

Article 9. Based on the social-economic development master plan, national and local security requirements and national electricity development plan that has been approved by the Prime Minister, the People’s Committees of provinces and cities under the central government shall organise and prepare plans to develop the local electricity for approval according to Article 10 of this Decree.

Article 10. The Ministry of Industry shall be responsible to supervise and coordinate with the relevant Ministries and sectors to appraise the national electricity development plan, the electricity development plan of Ho Chi Minh City and electricity development plan of Hanoi City and submit the same to the Prime Minister for approval.
If it is necessary, the Prime Minister will decide to form a State Appraisal Council to assist the Prime Minister to consider and approve the national electricity development plan.

2. The Minister of Industry shall appraise and approve electricity development plans of provinces and cities under the central government except for such cities specified in Clause 1 of this Article.

3. The Ministry of Industry shall stipulate content of the plans and steps of appraisal, consider and manage the implementation of local power development plans.

Section 2

INVESTMENT AND DEVELOPMENT OF ELECTRICITY

Article 11. The investment and development of electricity facilities must comply with the national electricity development plan and electricity development plan of provinces and cities under the central government that have been approved by the relevant State authorities, and comply with the laws on the management of investment and construction.

Article 12. Apart from the Electricity of Vietnam, foreign and Vietnamese organisations and individuals that invest and develop power sources and exploit electricity facilities must satisfy the following conditions:

1. In case of connecting to the national power system:

a. Possessing investment licences or investment decision, licence to conduct activities in electricity and other licences according to the laws;

b. Having agreed with the Electricity of Vietnam in relation to connection points and power sale and purchase agreements;

c. Complying with the regulations on power prices under clauses 2.3 of Article 38 of this Decree;

d. The regime and hours of operation of the plant in a year is in accordance with the operational regime of the national power system;

dd. Complying with process, principles of operation of the national power system.

2. In case of independent operation with the national power system:

a. Possessing investment licences or investment decision, licence to conduct activities in electricity and other licences according to the laws;

b. Complying with the regulations on power prices under clauses 2.3 of Article 38 of this Decree.

3. The Ministry of Industry shall publicise a list of electricity facilities to be constructed in the national electricity development plan so that foreign and local investors will be aware and participate in the investment and construction under the forms stipulated by law.

4. Electricity facilities invested under the forms of BOT, BTO, BT and a number of other investment forms will enjoy incentives according to the law.

Article 13. Power sellers shall be responsible to invest, construct, manage and operate high-voltage and medium-voltage power transmission projects until the fences of industrial zones or premises of the power buyers unless it is otherwise agreed. The investment, management, operation of low-voltage power net shall be carried out in accordance with Articles 27 and 51 of this Decree.

Chapter III

PRODUCTION, TRANSMISSION AND DISPATCH OF POWER SYSTEM

Section 1

PRODUCTION OF ELECTRICITY

Article 14.

1. A power plant may be commissioned when the following conditions are satisfied:

a. being constructed according to the approved design;

b. being examined and tested according to the law;

c. possessing electricity licences as well as other licences according to the law;

2. In case of connecting to the national power system, [the connection work] must be carried out according to clause 1 of Article 12 of this Decree.

Article 15. The boundary of management of a power plant will be identified to be from the connection point with the national power system inward the power plant.

With respect to independent power plants that have activities of transmission, distribution and sale of power to buyers, the boundary of management shall be identified until the position where the meter to sell power to the buyers is located.

Article 16. Organisations, individuals that produce electricity shall have rights to:

1. Operate according to the investment licence or investment decision, electricity licences and other licences according to the law.

2. Require to implement such provisions that have been agreed under the contract with power transmitting parties and other relevant parties.

3. Enjoy other rights according to the law.

Article 17. Organisations and individuals that produce power shall have obligations to:

1. Perform according to the investment licence, investment decision, electricity licence and other licences according to the law.

2. Properly implement the terms that have been agreed under contract signed with the power buyers, contract signed with the transmitting parties and other relevant parties as well as the regulations of the Dispatch Centre of the National Power System.

3. Guarantee to produce electricity stably, safely and the electric energy quality.

4. Guarantee the environmental protection standards according to the law.

5. Be examined, supervised by the State management authorities according to the law.

6. Perform other obligations according to the law.

Section 2

POWER TRANSMISSION

Article 18. The power transmission net is identified from the point after the switch or circuit breaker of the power plant until the connection point after the switch or the circuit breaker of the transmission net connected to the distribution net.

The boundary between the national power transmission net and the power transmission net outside the national power system is the boundary of assets of each investor.

2. In case of connecting to the national power system, [the relevant parties] must agree on the connection points and sign power sale and purchase agreements with the Electricity of Vietnam.

Article 20.

1. The organisation that possesses the transmission net may sign agreements to hire other organisations that have licences for conducting electricity business to carry out the management and operation.

2. Organisations and individuals conducting electricity business may sign agreements to lease power transmission net for the purposes of transmission of electric energy.

Article 21. Rights and obligations of organisations that conduct power transmission:

1. Organisations that conduct power transmission have rights to:

a. Examine, draw up statement of case, raise opinions for settlement or temporarily suspend in case of emergency and report to the relevant authorities to settle breaches of laws on protection of high-voltage power net;

b. Request the Dispatch Centre of the National Power System in relation to period of time and remedies for incidents of the power system;

c. Require the power buyers to provide information on the needs to purchase power.

2. Organisations that conduct power transmission have obligations to:

a. Exploit the power transmission net in compliance with the process, safety and technical norms, guarantee quality of electric energy according to the law.

b. If an incident happens, promptly remedy and notify other contractual parties of the causes and period of time to remedy.

c. Properly perform obligations specified under contracts signed with the producers and distributors of electricity and other relevant parties;
d. Perform other obligations according to the law.

Article 22. Apart from the rights and obligations specified under Article 21 of this Decree, organisations and individuals that have power nets connected to the national power system shall have the following rights and obligations:

1. To comply with the consistent management of the Dispatch Centre of the National Power System.

2. To manage and exploit the power net according to process and safety and technical norms.

3. To refuse to implement orders of the Dispatch Centre of the National Power System when it discovers seriously unsafe elements for human being or equipment, however be responsible before the law for their decision.

4. To complain with the Dispatch Centre of the National Power System, the parties that undertake the power transmission in relation to the stabilisation and quality of electric energy of the transmission net.

Section 3

DISPATCH OF THE NATIONAL POWER SYSTEM

Article 23. The authority dispatching the national power system is a body under the Electricity of Vietnam called the Dispatch Centre of the National Power System and consists of central and regional dispatching centres.
The Electricity of Vietnam shall construct the process of dispatching the national power system to submit to the Minister of Industry for consideration and approval.

Article 24. Rights and obligations of the Dispatch Centre of the National Power System:

1. The Dispatch Centre of the National Power System has the rights to promptly cut defect elements out of the system when it finds such elements may cause seriously unsafe incidents to human being, equipment and power system, then immediately report to the relevant authorities and notify the relevant organisations and individuals according to the Regulation on dispatching the national power system.

2. The Dispatch Centre of the National Power System has obligations to:

a. Design the most effective operational methods and solutions to settle the incidents of the national power system to submit to the Electricity of Vietnam for its approval and responsible for the implementation thereof;

b. Manage the national power system to guarantee the quality of electric energy and the reliability of power supply;

c. In case of power shortage, must work out plan to cut and reduce load curve, report the Electricity of Vietnam for its consideration, approval and implementation, according to the order of priority specified in Article 6 of this Decree;

d. Properly perform obligations specified in the Regulations of dispatching the national power system within the relationship with the parties undertaking the production, transmission and distribution of power and other relevant parties, moreover, comply with contracts signed between the Electricity of Vietnam or an authorised party and the parties that purchase or sell electricity;

dd. Perform other obligations according to the law.
Article 25. Organisations, individuals that have power facilities connected to the national power system must comply with the consistent management of the Dispatch Centre of the National Power System and properly perform sale and purchase agreements with organisations or individuals that are permitted to distribute electricity.

Chapter IV
SALE, PURCHASE AND USE OF ELECTRICITY

Section 1

POWER SALE AND PURCHASE AGREEMENTS

Article 26.

1. Purchase and sale of power must be carried out under contracts. Power sale and purchase agreements are written agreement on rights, obligations and relationship between the sellers and buyers of power. There are 2 types of power sale and purchase agreements:

a. Civil contracts applied to sale and purchase of power for living purposes shall be implemented according to the Civil Code. Forms of contract shall be stipulated by the Ministry of Industry.

b. Economic contracts applied to sale and purchase of power for business purposes and other purposes shall be implemented according to the Ordinance on Economic Contract.

2. The parties entering into contracts shall be responsible to properly implement provisions specified in the contracts. In reality, if the power supply fails to satisfy the needs of the buyer, the seller must notify the buyer the capacity of the power system to supply in order to agree prior to singing or amending contracts accordingly. If the parties fail to reach an agreement, the parties may request the Department of Industry of provinces or cities under the central government for settlement.

Article 27.

1. Conditions to sign civil power sale and purchase agreements:
a. The power buyer has correspondence requesting to purchase power with one of the following instruments to be attached: permanent resident book or temporary resident certificate, house ownership certificate, house lease;

b. The power buyer must have capacity for civil acts in full according to the law; people who have limited capacity of civil acts or lose capacity of civil act must undertake authorisation according to the Civil Code.

c. Electricity net for living purposes must meet the technical standards according to the laws;

d. The metering system must be installed in compliance with the design, inspected according to the State standards and sealed with lead and sealed up as stipulated;

dd. The power buyer must pay fees for installation of extension wire from the power net of the seller to premises or areas storing assets of the buyer.

2. When such conditions specified under clause 1 of this Article have been properly satisfied, within 7 days the parties must sign contracts and the sellers must energise.

Upon receiving of written request of the buyer but the seller does not have conditions to sell power, within 5 days the seller must response the buyer in writing.

Article 28.

1. Conditions to sign power sale and purchase agreements:

a. The buyer and the seller must be a legal entity or individual that has registered business according to the laws;

b. The buyer is organisation, individual that utilise electricity must have request in writing clearly stating the purposes of using power, breakdown of capacities of power consuming equipment. Organisations or individuals utilising power with consuming capacity from 80kW or transformers with capacity from 100kVA onward must register load curve and technological and technical characters of the production line;

c. Electricity facilities must be constructed and commissioned satisfying the required standards and design that have been approved by the relevant authorities;

d. Metering system must be installed according to the design and sealed up with lead, inspected, and certified to satisfy the standards of the state management body in quality measurement standards or other authorised organisations.

2. Duration of power supply shall be agreed between the parties under the agreement.

Article 29. The buyer that has independent power generation source may sell electricity to the national power system when the national power system has requirements. Power selling price to the national power system shall be agreed by the two parties, In case the two parties fail to reach an agreement, each party may request relevant state authorities for settlement.
Article 30. Export, import of electricity shall be undertaken according to treaties signed by the Vietnamese Government or entered into with the governments of the relevant countries.

Section 2

QUALITY STANDARDS OF ELECTRICITY

Article 31. The seller must guarantee the quality of electricity supplied to the buyer as required below:

1. Voltage:

In normal condition, voltage is allowed to vary within + 5% compared with the nominal voltage and identified from the minor direction of the transformer that supplies electricity to the buyer or at other positions as agreed by the parties under the agreement when the buyer reaches the capacity coefficient (cosφ) > 0.85 and implement in accordance with the load curve agreed in the contract.

In case the power net is not stable, voltage man vary from +5% to –10%.

2. Frequency: in normal condition, the frequency of power system may vary within +0.2 Hz compared with the norm that is 50Hz. In case the power system is not stable, the difference of frequency may be + 0.5Hz.

3. In case the buyer requires electric energy of which the quality is higher than that specified at clauses 1 and 2 of this Article, the parties shall agree thereon in the contract.

Article 32.

1. In the condition where the power net guarantee the quality of electricity as required, the buyer that purchases power for production and supply of services that have consuming capacity from 80kW or transformer that has capacity from 100kVA onward must guarantee cosφ > 0.85 at the position where the counter meter is installed.

2. In case cosφ
a. Installing reactive power making-up equipment to increase cosφ reaches from 0.85 onward;

b. Additionally purchasing reactive power on the power system of the seller.

3. In case the buyer is able to generate reactive capacity to the net, the two parties may agree on the purchasing, selling in the contract. The Ministry of Industry, the Government Pricing Committee shall provide guidelines on the purchase and sale of reactive capacity as specified under clauses 1 and 3 of this Article.

Section 3

METERING ELECTRIC ENERGY

Article 33.

1. Metering electric energy shall be carried out by metering equipment (counters, current transformers, voltage transformers) that meets the standards inspected, sealed up with lead by competent inspecting organisations.

2. Only organisations that is competent or authorised according to the Standards and Quality Measurement General Department are allowed to undertake inspections of metering equipment.

Article 34. In case the buyer utilises electricity for various purposes that have different electricity prices, each category must have a private counter. In case it is impossible to install separate counters, and a counter is shared, the two parties shall agree on how to calculate electric energy rate according to each type of price under the contract.

Article 35.

1. The seller shall be responsible to provide metering equipment that has been inspected in order to sell electricity to the buyer, and responsible for the satisfying of standards and accuracy of such equipment, except it is otherwise agreed.

2. Organisations or individuals utilising electricity for production, supply of services that have 3-phase electricity consuming equipment and capacity from 80kV onward or voltage transformers with capacity from 100kVA onward must install active counters and reactive counters).

3. Counters and metering equipment, equipment that protects counters, and safety equipment that goes along with such metering equipment are assets of the seller; labour cost and additional materials required for the installation shall be at the expense of the buyer.

4. Positions to install counters shall be agreed by the seller and the buyer and meet the safety and beauty requirement as well as shall be convenient for inspection of indicators of the counters by the two parties. If the two parties fail to agree on positions to install counters, the seller shall request the Department of Industry of the province or city under the central government to consider and decide.

Article 36.

1. When doubting the accuracy of counters, the buyer may require the seller to undertake examination. No later than 3 days after receiving requirement from the buyer, the seller must examine and repair. Expense for the examination and reparation of the counters shall be at the expense of the seller.

2. If the buyer does not accept the examination and reparation results of the seller, the buyer may make complaint to the Department of Industry of the province, city under the central government and request it to assign an independent inspecting organisation to undertake re-examination. According to the examination results:

a. If the counter runs correctly, the buyer shall pay the examination fees;

b. If the counter runs incorrectly (fast or slow), the seller shall repair the counter and pay examination fees and expense for the reparation.

3. While waiting for the examination results, the buyer shall still pay electricity bills in time according to the indicators of the counter. After obtaining results from the examination organisation, the payment of the different electric energy shall be carried out according to Article 40 of this Decree.

4. When replacing a counter, the buyer and the seller shall prepare and sign on minutes confirming the indicators of the counter.

Article 37.

1. The seller shall be responsible for:

a. examining the initial counters, examining and replacing regularly and irregularly to ensure the counter operates within the allowed inaccuracy. When replacing a counter, the seller shall inform the buyer;

b. If a counter that is not belonging to the buyer’s management is lost or damaged, and the cause is not due to the buyer’s fault, the seller shall install another counter and resume supplying electricity to the buyer within a period of maximum 7 days from the date the it is confirmed that the counter is lost or damaged;

c. Organisations and individuals utilising electricity for living purposes shall record indicators of counters once a month, and may record 1 or 2 days earlier or later. If the date to record indicators falls in a public holiday, Tet, then the record will be carried out 1 or 2 days before or after the public holiday or Tet;

d. With respect to organisations or individuals utilising electricity for other purposes rather than living purposes, the recording of indicators shall be as follows:

- Below 10kWh/month: recording indicators once a month;

- From 10.000 to 50.000 kWh/month: recording indicators twice a month;

- Above 50.000 kWh/month: recording indicators three times a month.

dd. With respect to organisations, individuals utilising electric energy less than 15kWh/month, indicators may be recorded once every three months. In case organisations, individuals utilising electric energy less than 15kWh in three months, then recording the indicator shown in the counter and the seller may collect the fixed fee equal to 15kWh according to the current rates;

e. Notify the buyer of the quantity of electric energy used in each month by sending a notice of electricity counter readings which clearly specifies the name of the person who establishes the readings. Where the date of electricity counter reading is changed, such change must be notified to the buyer.

g. Ensure the accuracy of counter readings;

h. Where the buyer is discovered to be fraudulent in using electricity by damaging the electricity counter or deliberately making the electricity counter readings incorrect, the seller shall have the right to produce a record of infringement and make proposal to the competent authority for solution.

2. The buyer is responsible to:

a. promptly notify the seller upon discovery of loss, damage or suspected inaccuracy of the electricity counter;

b. protect the electricity counter that is located within their control (including the seal and wiring map); and shall be responsible to pay compensation for loss of the meter or bear all costs of repairing and examining the electricity counter;

c. not relocate the electricity counter without approval of the competent authority. Any relocation of the electricity counter must first be approved of the seller. The costs of relocation shall be borne by the buyer.

Section 4

ELECTRICITY CHARGES AND PAYMENTS

Article 38.

1. The electricity charge tariff applicable to the national power network shall be prepared by the Ministry of Industry and submitted to the Prime Minister for approval subject to consultation with the Government’s Pricing Committee and related agencies.

2. Entities and individuals which and who wish to buy electricity, in the form of bulk sale, from the national power network for the purpose of retail sale to other entities and individuals must be strictly observer the electricity charge tariff approved by the Prime Minister.

3. The selling price of electricity of independent electricity utilities is prescribed as follows:

a. The price at which electricity is sold to EVN and interconnected into the national power network shall be agreed between the parties in the relevant contract. In special cases where no agreement can be reached between the, the competent authority shall be requested to make proposal to the Prime Minister for solution.

b. In case of selling electricity to users being entities and individuals, the selling price shall be agreed by the parties in the relevant contract. In special cases where no agreement can be reached between the, the competent authority shall be requested to make proposal to the Prime Minister for solution.
Article 39.
1. Payment shall be made in respect of the used quantity of electricity energy which is determined according to the electricity meter readings. The method of determination of the electricity energy to be paid must be specified in the contract.
2. The price at which payments of electricity charges are made must be in accordance with Article 38.

3. Electricity charges will be paid in Vietnamese Dong. The method and conditions of payment are stated in the power sale and purchase agreement. Where electricity charges are denominated in a foreign currency, such payment shall be converted to Vietnamese Dong at the average rate of inter-bank foreign currency market announced on the 1st day of the month in which the invoice is issued. The sale and purchase of power in export processing zones and open economic zones shall be carried out in the currency as agreed between the parties in the relevant contract.

4. Electricity charges are to be paid upon each meter reading as specified in points c, d and dd of clause 1 of Article 37 hereof.

5. Upon receipt of the electricity charge payment request, if the buyer fails to have made the payment, the seller shall have to send a notice of electricity charge payment to the buyer. Within 7 days upon receipt of such notice, the buyer shall be responsible to make such payment. Failing this:

a. In case of civil contracts: the seller may agree with the buyer on delaying the payment date subject to eligible reasons. Where the extended period of payment expires without the buyer making such payment, the seller shall have the right to discontinue the sale of electricity.

b. In case of economic contracts: if the seller agrees to delay the payment date, the buyer shall be liable to bear an interest at the rate applicable to 3 month term commercial loan of Vietnam Industrial and Commercial Bank on the overdue amount of electricity charge which shall start to accrue from the 10th day. Where the extended period of payment expires without the buyer making such payment, the seller shall have the right to discontinue the sale of electricity.

6. In respect of electricity used for agricultural and hydraulic purposes, for watering rice, vegetables and industrial crops, the time of payment shall be agreed between the seller and buyer but shall not exceed 120 days from the date of receipt of the payment notice.

Article 40. In case the electricity meter is damaged, ceases to function to fail to operate properly, the payable electricity energy shall be determined as follows:

1. If the electricity meter runs faster than the specified standard:

a. If the time in which the electricity meter runs faster than the specified standard cannot be determined, the seller shall refund the amount of charges that has been collected in excess in respect of 4 periods of electricity meter reading, including the then current period which has not reached its reading day;

b. Where the time which the electricity meter runs faster than the specified standard is determined, the seller shall make a refund of the actual amount of charges that has been collected in excess.

2. If the electricity meter runs slower than the specified standard:

a. If the time in which the electricity meter runs slower than the specified standard cannot be determined, the seller will be entitled to collect additional amount of charges that falls short in respect of no more than 2 periods of electricity meter reading, including the then current period which has not reached its reading day;

b. Where the time in which the electricity meter runs slower than the specified standard (due to eligible reason) is determined, the buyer shall have to pay an additional amount of charges that should have been paid to the seller.

3. If the electricity meter ceases to operate and the buyer continues to use electricity, the amount of electricity charges payable during this period will be the daily average quantity of electricity of the most recent 3 periods of electricity meter reading multiplying with the number of days in which electricity is supplied not through the meter.

4. Where the buyer uses an multi-charge electricity meter and this meter is damaged without any replacement available, the buyer will be permitted to use a single-charge electricity meter and electricity shall be charged at hourly rate as applicable.

Section 5

RIGHTS AND OBLIGATIONS OF THE SELLER

Article 41. The seller shall have the following rights:

1. To decline to sign a power purchase contract if the buyer fails to satisfy the conditions mentioned in Articles 27 and 28 hereof.

2. To carry out regular and special inspection of the implementation of the power purchase contract, and draw up record of infringement in case of the buyer’s breaches of the contract.

3. To disconnect power supply before notifying the buyer of such disconnection in case there are potential incidents which may cause danger to the power facilities and people;

4. To discover and keep a record of administrative breaches of electricity utilisation and electricity activities committed by all organisations and individuals, and make prompt reports to the competent authority for settlement in accordance with the laws.

5. To discontinue the sale of electricity, either in part or in whole, upon any of the buyer’s following breaches:

a. Use of equipment that does not satisfy the safety requirements as required by the applicable regulations, which can potentially cause serious incidents to the power grid, and greatly endangers the safety of man and equipment.

b. breaches of the provisions of clauses 5 and 6 of Article 39 hereof;

c. prevention of the seller from inspecting the implementation of the power purchase contract;

d. being fraudulent in using electricity;

dd. Use of electricity in a manner that exposes dangers to people, animals and properties of the State, and the environment;

e. Attempted malfunctioning of the metering equipment;

g. Other cases as provided for by the competent State authorities.

6. The sale of electricity shall only be resumed after the buyer has fully implemented the settlement decision of the competent authority in relation to any of the breaches mentioned in clause 5 above and shall have to pay a outage – connection fee in accordance with the stipulations of the Ministry of Industry.

7. The Ministry of Industry shall provide for the procedures to discontinue the supply of electricity.

Article 42. The seller shall have the following obligations:

1. To sell electricity (in full quantity and capacity) and ensure stable quality of the sold electricity (with regards to frequency and voltage) to the buyer in accordance with Article 31 hereof and other agreements in the relevant contract.

2. To give notice in writing and make public display at electricity transaction centres of legal provisions relating to electricity and the regulation of the seller that a buyer needs to be aware of for implementation.

3. In case of a scheduled outage, the seller must give the buyer at least 5 days notice in the following forms:

a. send written notice to organisations and individuals using electricity for production purpose and other organisations and individuals using electricity through specialised transformer;

b. make announcement over public media to the organisations and individuals using electricity for daily living.

4. To disconnect power supply at the time as notified. Where the buyer request to change the time of disconnection, the buyer shall discuss this with the seller at least 48 hours prior to the proposed outage. The seller shall be responsible to consider and deal with the reasonable requests of the buyers.

If the outage cannot be delayed, the seller is still entitled to disconnect power supply as scheduled but shall give a notice to this effect to the buyer 24 hours before carrying out such outage.

In case the seller agrees to change the time of outage or delays the outage, it shall notify the buyer to the buyer at least 24 hours prior to the specified time of outage, except in the case of force majeure events.

5. In case there are incidents to the power grid which result in power failure or if forced outage is necessary for emergency reasons, the seller shall notify the major users being organisations and individuals of the outage and the scheduled time of reconnection.

6. To fix the incidents within 2 hours following the buyer’s notice of the power failure; where the incident cannot be fixed within such time, the seller shall promptly notify the buyer thereof.

7. To make compensation to the buyer for the losses caused by the seller in accordance with the laws and the relevant contract, except in the case of a force majeure event.

8. To sign contracts and sell electricity in accordance with Articles 27 and 28 hereof.

9. To enter into agreement with the relevant owners in case the seller uses the electricity structures of the buyer to supply electricity to other organisations and individuals.

10. To be subject to the inspection of the State competent authority in accordance with the laws.

11. To perform other obligations as required by the laws.

Section 6

RIGHTS AND OBLIGATIONS OF THE BUYER

Article 43. The buyer shall have the following rights:
1. To select the seller.

2. To request the seller to sign the power purchase contract upon satisfaction of all conditions mentioned in Articles 27 and 28 hereof.

3. To request the seller to supply electricity in full quantity, to ensure the quality of electricity and the duration of supply as specified in the contract.

4. To request the seller to promptly deal with power failure or any potential of power failure, and other electricity incidents which may cause dangers to people, assets and the environment.

5. To request the seller to supply or recommend the legal documents relating to the sale and purchase of electricity.

6. To request the seller to make compensation for the losses caused by the seller’s fault in accordance with clause 7 of Article 42 hereof.

7. To co-ordinate with the seller to examine the implementation of the contract. Where the seller fails to observe the provisions of the contract, the buyer is entitled to request the seller to certify such failure in writing and jointly deal with such failure.

Article 44.

1. The buyer shall have the following obligations:

a. to register its electricity demand with the seller, enter into the contract and fully perform all provisions of the contract.

b. To decrease the normal capacity to the limited capacity upon notice of the seller in case of force majeure events affecting the power grid.
c. To use electricity in accordance with the technical requirements, and in safe and thrifty manner.

d. To promptly notify the seller upon discovery of the metering equipment’s malfunctioning or suspected in accuracy.

dd. To give 15 days notice in writing to the seller if the buyer wishes to change the terms and conditions of the contract and discuss with the seller about the proposed changes.

g. To give 15 days notice to the seller on its wish to terminate the contract. Within 5 days from notice of such notice, the seller and buyer shall work together to liquidate the power purchase contract in accordance with the laws.

h. To facilitate the seller in the examination with respect to the implementation of the contract, to carry out the requests and proposals made by competent State authorities in accordance with the laws.

i. To make compensation to the seller for the losses caused by its fault in accordance with the laws and the provisions of the contract.

k. To perform other obligations as provided for by the laws.

2. Apart from the obligations mentioned in clause 1 of this Article, the buyer being organisations and individuals using electricity must not sell electricity to any other organisations and individuals without the approval of the seller, except for special cases for emergency purposes subject to subsequent notification of the seller.

Chapter V

SUPPLY OF POWER TO INDUSTRIAL ZONES

Article 45.

1. The boundary in relation to electricity investment and management between the seller and the buyer that buys electricity for industrial zones, export and processing zones and high-tech zones (industrial zones) is the land boundary of the industrial zones as specified by the competent authorities.

2. The point of interconnection and form of interconnection shall be agreed between the parties.
Article 46.

1. The electricity used in industrial zones may be supplied from the national power grid or from independent power grid of other organisations and individuals subject to the approval of the Ministry of Industry.

2. In the course of preparing the feasibility study report for the industrial zone, the investor of the industrial zone shall discuss with the seller on the plan to supply electricity to the industrial zone. After the decision of establishment of the industrial zone is issued by the Prime Minister, the investor that constructs and uses the infrastructure of the industrial zone for business purpose shall sign a commitment with the seller on the demand of electricity from time to time. Electricity shall only be supplied to the industrial zone after the entity that supplies electricity in the industrial zone has entered into a power sale and purchase agreement with the seller.

3. The investor of electricity structure in the industrial zone has the right to enter into an agreement to hire an entity which is licensed to carry out electricity activities for the purpose of management and servicing of the electricity facilities.

Article 47. The investment and construction of the power grid within the industrial zone must be in accordance with the objectives of the infrastructure investment and construction plan approved by the Prime Minister and in accordance with the power supply plan of the industrial zone approved by the relevant people’s committees of the cities and provinces under Central control.

Article 48. The sale of electricity by independent power plants to buyers outside the industrial zone must be approved by the licensing body, subject to the approval of the Ministry of Industry.

Article 49. Only entities which are licensed to carry out electricity activities shall be permitted to buy and sell electricity in the industrial zone. In case of purchase of electricity from the national power grid for re-sale, the price for such purchase and sale shall be in accordance with the provision of clause 2of Article 38 hereof.

Chapter VI

SUPPLY OF ELECTRICITY TO RURAL, MOUNTAINOUS AREAS AND ISLANDS

Article 50. The investment, development and management of the power grid in rural, mountainous areas and islands (rural areas) shall be carried out in the following principles:

1. The rural power grid is an infrastructure invested and developed in the principle of “jointly implementation by the State and the people, at Central and local levels”, and diversification of investment and management.

2. Investors who develop power grids in the areas falling in Lists B and C of Decree 51/1999/ND-CP dated 08 July 1999 of the Government implementing the Law on Domestic Investment Encouragement (amended) shall be entitled to borrow preferential loans with lower interest rate than the rate applicable to investment and development loans.

The Ministry of Finance shall co-ordinate with the Ministry of Industry and Ministry of Planning and Investment to issue guidelines on the implementation of this provision.

3. The ceiling price for selling electricity to households in the rural areas shall be decide by the Prime Minister. The chairpersons of people’s committee shall provide for the prices applicable to particular areas.

4. The entity that buys electricity from the national power grid to sell to users in rural areas for daily living purpose shall be entitled to tax reduction and exemption in accordance with the laws.

Article 51. The investment, construction of new electricity facilities and renovation of existing power grid in rural areas shall be carried out as follows:

1. Medium voltage transmission lines and low voltage transformation station shall be invested and managed by EVN, except when otherwise decided by the Prime Minister.

2. Medium voltage transmission lines will be constructed with the local capital.

3. Connection lines from the low voltage lines to the end-users’ location shall be constructed by the users.

4. The State shall provide supports to the construction of low voltage transmission lines and connection lines between the low voltage lines and the users’ location in mountainous areas of Zone II, III, the communes in border areas, other families which are entitled to subsidies in accordance with the laws.

5. With respect to areas such as mountainous areas, isolated areas and offshore islands where electricity cannot be supplied from the national power grid or it is not economically viable to do so, on-site power facilities such as small hydro power facilities, diesel-operated power facilities, solar energy power facilities and others shall be constructed with State support and preferences.

Chapter VII

STATE MANAGEMENT OF ELECTRICITY ACTIVITIES AND ELECTRICITY UTILISATION

Article 52. State management of electricity activities and electricity utilisation covers the following:

1. Issue and organise the implementation of legal instruments relating to electricity activities and consumption.

2. Develop, organise and provide guidance on the implementation of long-term policies and plans to develop the electricity industry.

3. Evaluate and approve electricity investment plans and projects as assigned.

4. Issue electricity licences.

5. Issue and inspect the implementation of technical-economic standards, norms and objectives applicable to electricity activities.
6. Issue the electricity charge tariff.]

7. Carry out inspection and examination, settle all disputes, claims, denouncement and deal with breaches of laws in electricity activities and utilisation.

8. Enter into international co-operation in electricity areas and carry out management of export-import activities in relation to electricity activities.

9. Carry out inspection and examination of electricity facilities.

10. Organise trainings and refreshment professional trainings for electric workers and officials; propagandise to the population the provisions of the laws relating to utilisation of electricity and protection of electricity structures.

11. Give awards and impose penalties in relation to electricity activities and utilisation.

Article 53.

1. The Government shall uniformly perform State management of electricity activities and electricity utilisation throughout the country.

2. The Ministry of Industry shall assist the Government State in the course of management of electricity activities and electricity utilisation, and shall have the following rights and duties:

a. Develop and submit to the Prime Minister for issuance, or issue within its jurisdiction, legal documents governing electricity activities and electricity utilisation;

b. Develop, submit to the Prime Minister for approval and management of the implementation of the national electricity development plan, Hanoi’s electricity development plan and Ho Chi Minh city’s electricity development plan; approve the electricity planning of other provinces and cities under Central authority;

c. Issue, amend, extend and withdraw electricity licences as authorised;

d. Perform the function of a ministry that is in charge of State management of electricity with respect to the construction of electricity facilities as authorised by the Government;

dd. Issue and examine the implementation of technical-economic standards, norms and objectives, unit prices relating to construction of electricity facilities;

e. Carry out specialised inspection, settle disputes and denouncements and deal with breaches in electricity activities and electricity utilisation within its jurisdiction;

g. Co-ordinate with the ministries and branches concerned in the management of international co-operation and import, export activities relating to electricity activities;

h. Organise safety inspection of electricity structures;

i. Co-ordinate with ministries and branches concerned to review and settle the issues relating to electricity charge, investment, finance, labour and salary, environment protection, professional training and other issues relating to electricity activities and electricity utilisation;

k. Carry out education and guidance on power saving measures.

3. Ministries, ministerial-level agencies, Governmental agencies
shall, within their jurisdiction, co-ordinate with the Ministry of Industry in taking State management of electricity activities and electricity utilisation.

4. People’s Committees at all levels shall take State management of electricity activities and electricity utilisation in their respective localities as authorised by the Government. The Department of Industry shall assist the people’s committees of provinces and cities under Central authority to perform State management of electricity activities and electricity utilisation in their localities.

Article 54. The Ministry of Industry Inspectorate shall carry out specialised inspection in respect of electricity activities and electricity utilisation in accordance with the stipulations of the Government.

Chapter VIII

AWARDS AND DEALING WITH BREACHES

Article 55. Organisations and individuals who make outstanding achievement in electricity activities and electricity utilisation that greatly contributes to the development of the electricity industry of Vietnam shall be awarded in accordance with the laws.

Article 56. The following actions are deemed as infringement of electricity activities and electricity utilisation:

1. Carry out electricity activities without proper licence issued by competent authority and business registration; the electricity activities carried out fail to be consistent with the term and scope of activity stated in the relevant electricity licence and business registration; carry out electricity activities during suspension of activity under the decision of competent authorities.

2. Issue electricity activity licences to ineligible organisations and individuals or refuse or delay the issuance of electricity activity licence to eligible organisations and individuals in accordance with the regulation of the Ministry of Industry.

3. Carry out investment and development of electricity industry in a manner which is not consistent with the provisions of this Decree and other laws relating to development and planning of electricity industry.

4. Breach of the procedures in respect of production, transmission and distribution of electricity; failure to conform to the instructions of electricity dispatching authorities at all levels.

5. Seller’s breaches of electricity activities and electricity utilisation include:

a. delay the signing of power sale and purchase agreement despite all conditions have been satisfied; delay of power supply after the contract has been signed;

b. Failure to ensure the quantity and quality of electricity in accordance with the signed contracts, except for force majeure events;

c. Failure to connect and disconnect power supply as scheduled, except for the cases stated in clause 3 of Article 41 hereof;

d. Failure to give notice to buyers on incidents caused to the power grid and delay the reparation of the power grid in case of incidents, except for force majeure events;

dd. Delay the supply of power into projects where all the operating conditions have been met without eligible reasons;

e. Inaccurate meter reading, inaccurate invoicing and selling electricity at other price than stipulated;

g. Use of improper metering equipment;

h. Use of electricity structure of the buyer without the buyer’s approval to supply power to other organisations and individuals;

i. Disconnection of power supply of users who are not subject to power supply limit in case of power shortage, except for the cases stated in clause 3 of Article 41 hereof;

k. Preventing of competent authority from carrying out inspection of electricity sales;

l. Failure to provide information to the buyer as stated in clauses 2 and 3 of Article 42 hereof;

m. Delay or failure to make compensation to the buyer in accordance with a decision of the competent authority due to the losses cause by the seller;

n. Other actions in breach of the laws on electricity activities and electricity utilisation.

6. Buyer’s breaches of electricity activities and electricity utilisation include:

a. delay the signing of power sale and purchase agreement despite all conditions have been satisfied; delay of performance of the signed contract in case of a bulk purchase of electricity to sell to end users;

b. Use of electricity for other purposes than stated in the contract;

c. Failure to reduce capacity of electricity as instructed by the seller in case of force majeure;

d. Use of electricity at greater capacity as registered in the additional charge chart specified in the power purchase contract during peak hours;

dd. Unauthorised use of other source of power supply of the seller than as stipulated in the contract, except for the case in which the buyer is an organisation or individual who buy electricity via bulk sale contract to sell to other organisations and individuals;

e. Supply of power to other organisations and individuals via the buyer’s electricity facilities without approval of the seller;

g. Disconnect, connect, repair, relocate electric equipment and electricity facilities of the seller;

h. Failure to liquidate the contract upon discontinuation of power consumption;

i. Causing damage to the electric equipment and electricity facilities of the seller;

k. Delay of payment of electricity charges stated in clauses 5 and 6 of Article 39 hereof without eligible reasons;

l. Causing incidents to the power grid of the seller;

m. Breaches of safety requirements relating to power grid safety zone;

n. Use of electricity in a manner that causes danger to people, animals, State properties and the environment;

o. Commitment of frauds in relation to electricity activities and electricity utilisation;

p. Prevention of competent authorities from inspection of electricity utilisation;

q. Delay or failure to make compensation to the seller in accordance with the decision of the competent authority due to the faults of the buyer;

r. Other actions in breach of the laws on electricity activities and electricity utilisation.

Article 57.

1. Organisations and individuals breaching the provisions of Article 56 hereof and other laws relating to electricity activities and electricity utilisation shall be dealt with as follows:

a. Organisations and individuals committing administrative breaches in relation to electricity activities and electricity utilisation shall be dealt with in accordance with the Government’s Decree on penalising administrative breaches in electricity area.

b. Organisation and individuals committing breaches of contracts shall be dealt with in accordance with the laws on contract;

c. Individuals committing breaches of electricity activities and electricity utilisation such that the breach constitutes a crime shall be subject to criminal prosecution and liable to pay compensation in accordance with the laws.

2. The authority, penalties and management of penalty cash paid in respect of contractual and administrative breaches in electricity activities and electricity utilisation shall be implemented in accordance with the laws.
The Ministry of Industry shall co-ordinate with the Ministry of Finance to provide guidance on management and use of penalty cash.

Article 58.

1. People’s committees at all levels have the rights to deal with administrative breaches relating to electricity activities and electricity utilisation in their respective localities.

2. The electricity inspectorate and other competent authorities have the right to deal with administrative breaches in electricity activities and electricity utilisation.

Article 59.

1. Organisations and individuals who are subject to penalties due to administrative breaches and contractual breaches shall have the right to lodge complaints to the competent State authority or commence suit at competent Court with respect to the penalty decision in accordance with the laws.

2. Pending the hearing of the complaint or lawsuit, the organisation and individual shall still implement the penalty decision in accordance with the law. Upon the issuance of the settlement decision of competent authority or the judgment of the Court, such settlement decision or judgment shall be implemented.


Chapter IX

IMPLEMENTATION PROVISION

Article 60. This Decree comes into effect 15 days after the dates of its signing. Previous regulation inconsistent with the provision hereof shall be repealed.

Decree 80/HDBT dated 19 July 1983 of the Council of Ministers issuing the regulation on supply and use of electricity now ceases to be effective.

Article 61. Ministers, heads of ministerial-level agencies, heads of Governmental bodies, chairpersons of people’s committees of cities and provinces under Central authority.

On behalf of the Government

Prime Minister
PHAN VAN KHAI