New electricity pricing mechanism launched
(People's Daily Online)
Updated: 2005-04-06 15:58

China's National Development and Reform Commission (NDRC) has issued interim regulations on electricity pricing.

The regulations concern power purchase price from the power production enterprises by the power grids, the price of power transmission and distribution and the electricity sale price of the power grids to users, which signifies that China will implement a new electricity pricing mechanism.

Sources with NDRC said that as for the power purchase price from the power production enterprises by the power grids, before price bidding, government competent authority determines a price according to the principles of reasonably compensating the cost, reasonable profits, computing tax according to law, or settles it through government bidding.

The newly built generating units in the same region will adopt the same price as set by the government competent authority, and release the price to the public beforehand. The prices that have been set previously will gradually be unified. Power purchase prices will be linked with fuel prices.

After price bidding, power purchase price from production enterprises by the power network will be divided into two parts. The government will set the capacity price and the energy price will be determined through market competition. Concentrated price bidding for all the power capacity can be implemented in all regional power markets. Big users and power transmitting and distributing companies with independent accounting can be allowed to conduct two-way trade with electricity producers.

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