Vietnam: Methods for calculating costs of administration of electric power system

According to Article 6 of Circular No. 12/2014/TT-BCT of the Ministry of Finance of Vietnam, total cost of the management and ancillary services of electric power system in year N including costs of the operation of electric power system and electricity market, and the management of the electricity generation and sale shall be determined as follows:

- Cost of purchased raw materials, services and other charges shall be determined according to the limits issued by the competent authorities, the figures audited in year N-2, the estimate in the years N-1 and the year N.

- Salaries and salary deductions shall be determined according to the relevant Law provisions.

- Cost of fixed asset depreciation shall be determined according to the provisions for useful life and methods for depreciating fixed assets according to the Circular 45/2013/TT-BTC dated April 25, 2013 of the Ministry of Finance providing guidance on managing, using and depreciating fixed assets and guiding and amending documents for such Circular.

- Costs of major repairs shall be determined according to the total estimation of necessary major repairs in year N.

- Financial costs shall include interests on loans and loan fees which shall be paid in year N and estimated exchange differences in year N.

Concurrently, target profit in year N of the administration and ancillary services of the electric power system shall be determined according to their return on equity issued by the competent authorities.

View more details at Circular No. 12/2014/TT-BCT of the Ministry of Finance of Vietnam, issued on March 31, 2014.

Le Vy

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