China mulls hiking power price before year end -media

China is considering raising power prices before the end of the year under a pricing formula that has not been followed for several years, a weekly newspaper said, citing a source and an energy official.

The initial plan is to raise both retail power prices and on-grid prices, with increases in retail charges set to be higher than changes in on-grid rates, the China Times said, citing the source.
The move, if it occurs, would help ease the pressures on power firms and grid operators that saw their profits dwindling and even losses rising because they could not pass on higher input costs to consumers. It would also affect supply talks between power firms and coal miners.

Under a scheme introduced in 2004, the government would adjust power prices if coal costs shift 5 percent every 6 months, but the rules have been loosely followed since 2005 and have been largely idled in the past two years. Beijing worried that too many increases coming too quickly in accordance with surges in coal prices might hinder economic growth and cause social unrest.

Coal-fired power plants, which produce nearly 80 percent of China’s electricity, suffered hefty losses last year during the global commodities boom as they could not absorb most of the increase in coal costs despite two power price hikes.

Forbes