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NDRC further improves the execution rules of basic electricity price and enhance the rationality of laying out rules in order to help firms reduce their costs.
Great industry users have to pay basic electricity price of 2 million yuan after having received approvals of halting electricity use， and has to pay basic electricity price of 6 million yuan without applying for halting electricity use. This is the very description of what one Henan-based firm has experienced in May.
Under the current sluggish economic situation， many firms that cannot manufacture with full capacity have been suffering a lot from the relatively high basic electricity price. In the meanwhile， firms are constrained by long applying periods and other various terms if they want to halt elec- tricity use or apply for adjusting calculating methods of basic electricity price or applying for reducing capacity.
How could these firms reduce their electricity costs？ This time， relevant national department has come to grips with reforms of two-part electricity price. Recently， NDRC （National Development and Reform Commission） has launched Notice of Improving Two-part Electricity Price Users` Basic Electricity Price Execution Methods. It loosens restriction from one-year basic electricity price system to one-quarter system. Besides， it loosens the deadline restriction of applying for capacity reduction and electricity use halt， and cancels the terms of forbidding new users or users who just expanded their capacity to apply for capacity reduction or electricity use halt.
At the end of June， chief of Pricing Department from NDRC， Zhang Manying， revealed that， the government would further improve the execution rules of basic electricity price and en- hance the scientificity and rationality of laying out rules in order to help firms reduce their costs. It is known that the two-part electricity price system will be further improved after many years` ap- plication， and it might be applicable to ordinary business users in the future.
Talking of the issue of payment still needed even if no electricity being used， one has to understand the pric-ing rule. It regulates that great industry users have to pay basic electricity price and actual electricity price， respectively representing firms` capacity costs and electricity power costs. Basic electricity price is calculated by users` capacity or maximum demands for electricity and is irrelevant to actual electricity use. Two part electricity price is an internationally used electricity price management system and China has been implementing it since 1953. This is regarded as one favorable measure for great industry users to foster economic developments， and actual electricity price for great industry users are indeed lower than users from other industries， which could propel their utilization through price leverage. At present， industry users with capacity of over 315kVA all abide with the two- part electricity price system.
Before， it was up to users to decide which charging method of basic electricity price to use and the agree-ment would remain unchanged once it was signed. Mr. Zeng from energy and economic research consultancy center commented that： “Power is one of special commodities， its capacity features and electricity features are two different things. Firms have to bear capacity costs even if they don`t consume electricity. In this case， power is simply treated as one normal commodity， which is obviously a layman`s view.”
Zhang Manying said on June 28， great industry users should be specially equipped with electricity supply facility. As great industry users are on the level of high voltage， its basic electricity price per unit product would be rela- tively not much when great electricity is consumed. But now， the market has changed， some firms have started fully or partly halting production and electricity price per unit product will therefore rise.
One insider from Shaanxi local power supply bureau revealed that， basic electricity price is either calculated by demand or by capacity and their choice directly impacts how much they need to pay. At present， maximum monthly demand electricity price for great industry in Shaanxi is 31 yuan/ KWH， and capacity price is 24 yuan/ KWH. As the calculation method of demand electricity price is rather com- plicated， many firms have preferred to the capacity one， which is simply， transformer capacity multiplies basic electricity price equals the total basic electricity price.
It is learnt that two types of charging methods will also directly impact how much firms have to pay. Firms with higher electrical load pay less if they choose the capacity method； and firms with lower electrical load pay much less if they choose the demand method.
It is calculated that， if one firm has two transformers with capacity of 1000kVA and it chooses the capacity method， it needs to pay 48，000 yuan per month for basic electricity bill. If the firm operates at full capacity， it is no doubt that capacity method is better. But if this firm doesn`t consume electricity or has low electricity consumption for one entire month， they need to pay 40% generally in accordance with the total capacity， that is around 24，800 yuan per month， and therefore its expenditures of electricity bill are half reduced. The insider expressed that， NDRC has adjusted the cycle of re-choosing charging method of basic electricity price from one year to one quarter， industry users are thereby able to make changes to charging methods in time according to their producing status， reducing expenditures of electricity bill.
In addition， firms were confronted with too many restrictions when it came to capacity reduction， and therefore corporate policies were impacted. For instance， the period of capacity reduction shall not be less than six months or more than two years. Once capacity reduction application is approved， capacity reduction or halt is not allowed； if such measure has to be taken， 50% of basic electricity price will be charged for what is either reduced or halted.
This time， NDRC confirms that firms could apply for capacity reduc- tion or halt five days in advance according to their demand for electricity. No basic electricity bill will be charged for equipment of which capacity is either reduced or halted from the day the capacity is sealed.
One coal miner in the Weinan city of Shaanxi province said， the new rules will directly reduce firms` electricity costs and firms will make use of new rules of minimize costs， and will soon send capacity reduction request to power supply units.
According to National Energy Administration， industry power consumption was 3，934.8 billion KWH and heavy industry power consumption was 3，262 billion KWH， accounting for 58% of the total social consumption. China`s electric power regulation has been long impacted by planned economy and industry electricity load proportion exceeds 70%， therefore， two part electricity price is only applicable to great industry users of 315kVA and above.
One industry insider said， “It is necessary to extend two part electricity price system to ordinary industry and businesses. Once it is more widely applied， electricity consumption methods will be improved via price leverage and power supply units can provide better operating efficiency and propel reason- able allocation of electricity resources.”Some insiders suggested that， NDRC has been considering extending the two part electricity price system from great industry to ordinary industry and businesses.
Great industry users have to pay basic electricity price of 2 million yuan after having received approvals of halting electricity use， and has to pay basic electricity price of 6 million yuan without applying for halting electricity use. This is the very description of what one Henan-based firm has experienced in May.
Under the current sluggish economic situation， many firms that cannot manufacture with full capacity have been suffering a lot from the relatively high basic electricity price. In the meanwhile， firms are constrained by long applying periods and other various terms if they want to halt elec- tricity use or apply for adjusting calculating methods of basic electricity price or applying for reducing capacity.
How could these firms reduce their electricity costs？ This time， relevant national department has come to grips with reforms of two-part electricity price. Recently， NDRC （National Development and Reform Commission） has launched Notice of Improving Two-part Electricity Price Users` Basic Electricity Price Execution Methods. It loosens restriction from one-year basic electricity price system to one-quarter system. Besides， it loosens the deadline restriction of applying for capacity reduction and electricity use halt， and cancels the terms of forbidding new users or users who just expanded their capacity to apply for capacity reduction or electricity use halt.
At the end of June， chief of Pricing Department from NDRC， Zhang Manying， revealed that， the government would further improve the execution rules of basic electricity price and en- hance the scientificity and rationality of laying out rules in order to help firms reduce their costs. It is known that the two-part electricity price system will be further improved after many years` ap- plication， and it might be applicable to ordinary business users in the future.
Talking of the issue of payment still needed even if no electricity being used， one has to understand the pric-ing rule. It regulates that great industry users have to pay basic electricity price and actual electricity price， respectively representing firms` capacity costs and electricity power costs. Basic electricity price is calculated by users` capacity or maximum demands for electricity and is irrelevant to actual electricity use. Two part electricity price is an internationally used electricity price management system and China has been implementing it since 1953. This is regarded as one favorable measure for great industry users to foster economic developments， and actual electricity price for great industry users are indeed lower than users from other industries， which could propel their utilization through price leverage. At present， industry users with capacity of over 315kVA all abide with the two- part electricity price system.
Before， it was up to users to decide which charging method of basic electricity price to use and the agree-ment would remain unchanged once it was signed. Mr. Zeng from energy and economic research consultancy center commented that： “Power is one of special commodities， its capacity features and electricity features are two different things. Firms have to bear capacity costs even if they don`t consume electricity. In this case， power is simply treated as one normal commodity， which is obviously a layman`s view.”
Zhang Manying said on June 28， great industry users should be specially equipped with electricity supply facility. As great industry users are on the level of high voltage， its basic electricity price per unit product would be rela- tively not much when great electricity is consumed. But now， the market has changed， some firms have started fully or partly halting production and electricity price per unit product will therefore rise.
One insider from Shaanxi local power supply bureau revealed that， basic electricity price is either calculated by demand or by capacity and their choice directly impacts how much they need to pay. At present， maximum monthly demand electricity price for great industry in Shaanxi is 31 yuan/ KWH， and capacity price is 24 yuan/ KWH. As the calculation method of demand electricity price is rather com- plicated， many firms have preferred to the capacity one， which is simply， transformer capacity multiplies basic electricity price equals the total basic electricity price.
It is learnt that two types of charging methods will also directly impact how much firms have to pay. Firms with higher electrical load pay less if they choose the capacity method； and firms with lower electrical load pay much less if they choose the demand method.
It is calculated that， if one firm has two transformers with capacity of 1000kVA and it chooses the capacity method， it needs to pay 48，000 yuan per month for basic electricity bill. If the firm operates at full capacity， it is no doubt that capacity method is better. But if this firm doesn`t consume electricity or has low electricity consumption for one entire month， they need to pay 40% generally in accordance with the total capacity， that is around 24，800 yuan per month， and therefore its expenditures of electricity bill are half reduced. The insider expressed that， NDRC has adjusted the cycle of re-choosing charging method of basic electricity price from one year to one quarter， industry users are thereby able to make changes to charging methods in time according to their producing status， reducing expenditures of electricity bill.
In addition， firms were confronted with too many restrictions when it came to capacity reduction， and therefore corporate policies were impacted. For instance， the period of capacity reduction shall not be less than six months or more than two years. Once capacity reduction application is approved， capacity reduction or halt is not allowed； if such measure has to be taken， 50% of basic electricity price will be charged for what is either reduced or halted.
This time， NDRC confirms that firms could apply for capacity reduc- tion or halt five days in advance according to their demand for electricity. No basic electricity bill will be charged for equipment of which capacity is either reduced or halted from the day the capacity is sealed.
One coal miner in the Weinan city of Shaanxi province said， the new rules will directly reduce firms` electricity costs and firms will make use of new rules of minimize costs， and will soon send capacity reduction request to power supply units.
According to National Energy Administration， industry power consumption was 3，934.8 billion KWH and heavy industry power consumption was 3，262 billion KWH， accounting for 58% of the total social consumption. China`s electric power regulation has been long impacted by planned economy and industry electricity load proportion exceeds 70%， therefore， two part electricity price is only applicable to great industry users of 315kVA and above.
One industry insider said， “It is necessary to extend two part electricity price system to ordinary industry and businesses. Once it is more widely applied， electricity consumption methods will be improved via price leverage and power supply units can provide better operating efficiency and propel reason- able allocation of electricity resources.”Some insiders suggested that， NDRC has been considering extending the two part electricity price system from great industry to ordinary industry and businesses.