What’s new: China’s top economic planning agency has acknowledged that electricity prices are too low for households and too high for businesses, signaling that residential power prices might be increased sometime in the future.
The National Development and Reform Commission’s (NDRC) statement (link in Chinese), published Thursday in response to an online comment, did not say when or by how much prices might rise.
The context: In China, residential customers have long paid below-cost prices for electricity, while industrial and business users have not, meaning that the latter have been subsidizing the former, the commission said.
In the statement, the NDRC said that the system should be reformed so that household electricity prices better reflect the actual cost of producing power and to reduce the subsidy that industrial and business users are paying.
Over the past few months, several regions in South China have suffered electricity shortages due to rising demand and a disruption in the coal supply, resulting in temporary power cuts for some enterprises, Caixin reported (link in Chinese).
Related: South China Energy Market in Chaos Over Trial Policy Issues, Supply Squeeze
Contact reporter Guo Yingzhe (yingzheguo@caixin.com) and editor Michael Bellart (michaelbellart@caixin.com)
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