China’s Guangdong ups power fee to cover gas costs

BEIJING — Six of south China’s wealthiest cities are charging industrial users a temporary surcharge on electricity prices, to compensate gas and oil burning power stations for soaring fuel costs, industry sources said on Monday.

The extra 0.045 yuan per kilowatt hour, officially called a “gas and fuel oil processing fee”, came into effect on March 1 in parts of Guangdong, China’s manufacturing hub and its wealthiest province, a local government official and a trader told Reuters.

The money collected could help tide the booming area over peak-time summer power shortfalls that the local government warns could be as high as 15 gigawatts, by providing cash to plants that can be easily fired up but have high fuel bills.

Some funds will be used by Guangdong Dapeng Liquefied Natural Gas (LNG) to run gas-fired power plants that can boost production when demand surges, the Information Times quoted Li Xiangming, Guangdong Economic and Trade Commission deputy chief, as saying.

But the extra cash will only cover a third of losses at gas-fired generators, Mr Li added.

Reuters