China’s top economic planner said Wednesday that the country’s power use cost would be reduced by nearly 100 billion yuan (14.8 billion U.S. dollars) this year due to pricing reforms and fee cancellation.
By the end of June, all provincial-level power grids had completed the power transmission and distribution pricing system reform, which aims to remove official interference in price determination and grant the market a decisive role, said Zhang Manying, an official with the National Development and Reform Commission (NDRC).
The previous controls on those prices allowed state-owned power grid companies to make unreasonably large profits and added to the burden of power users. Under the reform, prices will go down. That reform will cut the cost of electricity by around 38 billion yuan this year, Zhang said.
Another 18 billion yuan will be saved for power users through a reform that promotes market-oriented pricing for power sale, he said.
In addition, the cancellation of surcharges and extra rates in power prices will save around 41 billion yuan for ordinary users and rail carriers.
The reduction of power use costs is part of China’s plan to lower corporate costs to support a slower economy.
The central government has pledged to reduce corporate costs by 1 trillion yuan this year through measures including tax and fee cuts.