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Power price hikes take effect in Beijing
By Li Jing (China Daily)
Updated: 2004-11-09 23:06

Beijing residents will face electricity price hikes from today -- an increase by 4 fen (0.48 US cents) per kilowatt hour, representing an average monthly increase of nearly 5 yuan (60 US cents) per household.

The power price hikes partly result from the continuous rises in coal price which push up the costs for power companies, said the Beijing Development and Reform Commission.

The commission spokesman said that about 70 per cent of the city's power consumption is imported from neighbouring regions such as Shanxi, Hebei and Inner Mongolia.

With electricity prices nationwide increasing by 2.2 fen (0.27 US cents) on average in mid-June, Beijing adjusted its domestic power prices, the spokesman said.

Another reason for the price hikes is to address severe power shortages and raise consumers' awareness of the need for energy savings, said the spokesman.

Commission statistics show that power consumption for domestic use in Beijing kept soaring in recent years.

In 2000, domestic power use took up 15 per cent of the city's total electricity consumption. The ratio climbed up to 17.6 per cent in 2003 and is expected to reach 19.6 per cent this year, which continues to put pressure on the city's already strapped power supplies.

The spokesman said the neighbouring provincial areas have had to impose brownouts many times this summer in order to safeguard power supplies to Beijing.

But power charges of neighbours are higher than those of Beijing, which was 0.44 yuan (53 US cents) per kilowatt hour before the hikes.

For instance, the power charge of Hebei Province is 0.49 yuan (59 US cents) per kilowatt hour and the charge is 0.47 yuan (57 US cents) in Shanxi Province.

Meanwhile, the money raised from the price hike can be used to improve the city's grid to ensure a safe power supply, said the spokesman.

He said in order to minimize the impacts of price hikes on low-income groups, the municipal government has already raised subsidies of social security and the bottom line on workers' wages.

The city's minimum wage was raised to 545 yuan (US$66) a month from the previous 495 yuan (US$60) in July and the minimum standard of living also went up to 290 yuan (US$35) per month.

The spokesman said a survey made by the Municipal Statistics Bureau shows that the average power consumption per household is 118 kilowatt hours monthly. So the coming price hikes will add less than 5 yuan (60 US cents) per month to the average household bill, or 56.6 yuan (US$6.8) more a year.

"The amount of the price hikes this time is acceptable to me," said a 36-year-old Beijing resident Liu Yi. "After all, all the media report that the country is facing a serious power shortage. And the power charges of many other provinces are higher than Beijing."

In order to solicit public opinions on the price hikes, the commission held a public hearing in September. About 28 out of the 30 delegates attending the hearing gave a thumbs up to the proposals of the price hikes, the spokesman said.

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