China's five leading power companies – China Datang Corporation,
China Huaneng Group, China Hudian Corporation, China Power
Investment Corporation (CPI) and China Guodian Corporation – have
all handed in their application to the National Development and
Reform Commission (NDRC) for raising electricity prices in areas
where coal prices have soared recently.
This is the third such action made by the power industry to the
government. Since the first two petitions, made on their behalf by
the China Electricity Council (CEC), went unanswered, the companies
decided to strike out alone.
In 2005, the Chinese government created a peg between coal and
electricity prices, stipulating that the latter should rise or fall
following average coal prices within a 5 percent bracket for a
half-year period. In line with this, China altered its electricity
prices in 2006 and 2007.
Zhou Fengqi, an expert with the NDRC's Energy Research
Institute, explained that the government had not raised power
prices for several reasons. First of all, all average prices have
soared producing a 4.4 percent CPI hike. Secondly, a power shortage
is not an issue this year, given the excess electricity output
produced. Perhaps here lies the NDRC's reluctance to raise
electricity prices.
For more details, please read the full story in Chinese.
(http://finance.jinghua.cn/c/200707/25/n531901.shtml)
(China.org.cn July 25 2007)
