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China to Revoke Power Monopoly
China will break up the power monopoly by asking all the provincial power bureaux to hand over their administrative functions to provincial economic and trade commissions by the end of this year.
Already 27 of the 31 provincial power bureaux have implemented the reform, which was witnessed as a "strategic" move to gradually withdraw the government's control over the power sector by experts, according to Sunday's Business Weekly.
The next step will be to diversifying the fund channels in sector by allowing power enterprises to go public and lure more direct foreign investment.
The proportion of national assets in State-owned enterprises are to be considerably cut down, said Shi Yubo, director-general of the Electronic Power Department of the State Economic and Trade Commission.
The ongoing reform is aimed to foster a fairly competitive market, he added.
A trial separation was launched in Shanghai, east China's Shandong and Zhejiang provinces, northeast China's Heilongjiang, Jilin and Liaoning provinces during the first half of this year. The trial is scheduled to spread to more pilot cities next year.
The reform makes it a rule that one province mush have at least five independent power generating plants, each occupying no more than one-fifth of the total installed generating capacity in the province.
By doing so, competition among the power plants is expected to cut down the irrationally high production costs and high prices for end users.
"The cost saved from the competition will be passed on to customers, especially those enterprises with high power consumption," Shi said.
Experts say full competition in the country's power industry would reduce prices nationwide by 20 percent on average. Besides, China plans to adopt a price hearing system when time is right.
The total installed generating capacity of China is the second highest in the world while the power consumption per capita was only half of the world average last year.
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