Beijing will raise the price of electricity for government and industrial use during peak hours this summer by 5 per cent.
The move is aimed at conserving energy, a much prized commodity across the country.
It has been reported that thousands of firms will take a week off to try to avoid some of the extra expense.
The peak hours for electricity are 8-11 am and 6-11 pm.
Wang Haiping, spokesman and deputy director of the Beijing Municipal Commission of Development and Reform, announced the move yesterday at a press conference.
But he said electricity prices from 11 pm to 7 am this summer will be 18 per cent cheaper than the lowest price last year.
Some reports have said that using electricity in peak hours this summer will be more than 400 per cent more expensive than using it during non-peak hours.
Last summer it was 300 per cent more expensive, sources said.
Beijing still faces a contradiction between electricity supply and consumption, the official said.
In summer there is often a consumption peak due to the massive use of air conditioners.
It is predicted the capital city will consume 6-8 per cent more electricity than last summer.
The city will be short of 1 million kilowatts during peak hours in the summer, the official said.
The good news, however, is that electricity for family uses, buses, the metro and agriculture will not see higher prices, according to sources.
Large-scale enterprises that consume a lot of electricity are encouraged to use energy-saving equipment and try to operate machines when electricity costs less outside the peak hours.
It is reported that about 5,800 industrial enterprises will have a rest period for a week between July and August, during the peak.
The municipal government will invest 2 billion yuan (US$240 million) in upgrading the electricity network.
Emergency plans will be drafted to prepare for possible shortages this summer.
Yesterday's press conference also revealed that public bidding to choose the operators for four metro lines in Beijing will open.
The No 4, No 5, No 9 and No 10 lines are now being built.
Around 15 billion yuan (US$1.8 billion) of non-governmental investment to operate the metro lines is expected, according to Wang.
The local government spent 35 billion yuan (US$4.2 billion) on infrastructure for the lines.
The No 9 metro line is expected to be completed by 2010 and the other three lines by 2008, in time for the 29th Olympic Games.
The new airport expressway, the third-phase of the Beijing-Chengde expressway, the new part of the Beijing-Tianjin expressway and the No 110 national highway will also invite non-governmental investment through franchises, the official said.
