China to regulate residential power use in new trial

BEIJING, Jun 14, 2012 -- Xinhua

The National Development and Reform Commission (NDRC) announced Thursday that China will initiate a trial to charge residents more for electricity if their usage exceeds a certain level.

The trial, known as tier-based electricity pricing mechanism, will take effect July 1, said a statement on the NDRC's website, China's top economic planning body.

The statement said 80 percent of the population will not be affected because their monthly usage was too low.

However, the electricity price for the rest who use more power will be raised by as much as 0.3 yuan (around 0.05 U.S. dollar) per kilowatt-hour.

Lin Boqiang, a Xiamen University professor, estimated the tier-based electricity pricing will help power companies gain up to 6 billion yuan in extra revenue each year without taking into account the subsidies in the form of a free electricity quota given to poverty-stricken residents.

According to the statement, local authorities are also authorized to adjust the pricing threshold either on a monthly or annual basis in different seasons and depending on the size of a family.

The NDRC first started to seek public views on the tier-based electricity pricing mechanism in October 2010. The NDRC said the new measure will help save energy and protect the environment without causing a marked increase in the cost of power usage for the majority.

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