China Electricity Council (CEC), an organization representing
the country's power industry, has recently submitted a proposal to
the National Development and Reform Commission (NDRC) to raise
electricity prices next year.
The proposal said major coal enterprises in coal-rich provinces
have issued a notice that new contracts for electricity coal in
2008 will include a price rise of more than 30 yuan (4.05 US
dollars) a ton. This would result in a sharp increase in
electricity costs.
In the proposal, the CEC suggested the NDRC peg electricity
prices to coal prices.
Observers noted it was difficult to predict whether the NDRC
would adopt this proposal, especially with China's currently
soaring CPI growth.
The proposal also suggested administrative regulations on coal
prices, saying that if the prices continued to rise, most
coal-powered electricity plants would suffer heavy loss.
In the first nine months, statistics showed that coal price rose
25 yuan a ton from last year to 304 yuan a ton, an 8.9 percent
increase over last year.
The National Development and Reform Commission, a macroeconomic
agency under the State Council, is the key department in charge of
price regulation.
(Xinhua News Agency December 8, 2007)
