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Agency resolved to push ahead power price reform

By Zhao Qian (Global Times)

07:49, June 13, 2012

China's top economic planner yesterday published comments from the public and local governments on plans to implement progressive schemes on residential electricity prices, after the agency failed to meet the June 1 deadline to carry out power price reform.

The National Development and Reform Commission (NDRC) last year planned to launch the nationwide reform on June 1, but technical difficulties in forming a consensus across the country have delayed the plan, an expert told the Global Times yesterday.

According to the NDRC's plan, electricity pricing will follow a tiered system based on usage. Prices for the first tier, which refers to the lowest power consumption level, will remain unchanged, prices for the second tier will be increased by 0.05 yuan ($0.01) a kilowatt hour, and for the third tier by 0.30 yuan a kilowatt hour.

"Technical problems present a challenge for pushing forward various proposals," said Zhou Dadi, a professor at the Energy Research Institute under the NDRC.

Residents with high power consumption had mixed opinions on the progressive pricing system, with some complaining the upper limit for the first tier charges were too low, making them pay more for monthly power consumption, according to the statement published by the NDRC.

Big families living in a single apartment were also concerned that their living costs would increase, while some residents suggested the government should consider seasonal factors and modify the proposals accordingly, the statement said.

"At least the government's attitude this time is cautious and responsible," Zhang Jian, a 31-year-old Beijinger who supported different electricity charges for different seasons, told the Global Times yesterday.

In response, the NDRC claimed that a majority of residents in China would not be affected by the power price reform.

The major principle of the reform is to ensure that residents in the first tier, which aims to cover 80 percent of the total residents in the country, will not see price hikes, the NDRC said in the statement.

Since May, a total of 29 provinces and municipalities including Shandong, Guangdong, Beijing and Shanghai have publicized their residential electricity price reform proposals for public comments.

The proposals, which are based on an overall reform plan issued by the NDRC, set higher rates for heavier usage in a bid to encourage power-saving.

"Family size will be taken into account, and local governments will specify the plans, including raising the threshold for the first tier power use," the NDRC said in the statement.

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