Electricity Rate Hikes Take Effect

China raised commercial electricity rates on June 1, 2011 to curb demand and boost power generation.China raised retail electricity prices at the beginning of June 2011, the first increase in more than a year, to curb demand and boost power generation as the nation battles with a supply shortfall that may be the worst in history.

Power prices for industrial users in 15 provinces increased, while prices paid by residential users will remained unchanged, according to the NDRC.

China is battling with an electricity supply shortfall that may reach as much as 40 gigawatts this summer, surpassing the shortage in 2004, the country’s worst, according to State Grid Corp of China. The price increase would be the first since November 2009 and may spur power plants to increase utilization rates after rising coal costs and government caps on electricity tariffs forced some utilities to curtail operations or even shut.

State Grid executive vice-president Shuai Junqing projected ten provincial grids serving municipalities including Beijing, Tianjin, Shanghai and manufacturing bases in the provinces of Hebei, Jiangsu and Zhejiang would be hit by power shortages during the summer.

Source: China Daily