Economic Observer Online
Nov 30, 2011
Translated by Pang Lei
Original Article: [Chinese]

The National Development and Reform Commission (NRDC) announced earlier this afternoon, that as of Dec. 1, they will increase the retail price of electricity by 3 fen (0.03 yuan).

However, residential power prices will not be affected for now.

The NDRC also put forward a proposal for public comment that recommends that residential prices be varied according to the volume used over a certain time period.

According to today's announcement, the NDRC hiked both retail and wholesale electricity prices.

Retail prices have been increased by 3 fen a unit, while thermal power producers will now be able to sell their electricity on to the grid for 2.6 fen more per unit and other power producers will be increase the price at which electricity is sold on to the grid by an average of 2.5 fen per kilowatt hour.

Coal-fired power plants have been complaining to the government that due to the increase in the price of coal, they've been unable to make a profit of operations this year.

In order to ensure that the higher power prices benefit the struggling energy producers, the NDRC has also introduced some new restrictions that will effect how coal prices are set, including a cap on the spot prices for benchmark coal at Qinhuangdao Port at 800 yuan per tonne.