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Price of Electricity Goes up in Beijing

Beijing residents are facing hikes in the cost of electrical power, even if the hikes are relatively small.

In the context of a difficult power supply situation, a public hearing was held Thursday in the capital.

The cost of power will go up by 3 fen per kilowatt hour, representing an average monthly increase of about 3 yuan (36 US cents) per household.

The move followed a wide-ranging discussion on how much to raise prices.

Most of the 30 representatives at the hearing agreed that the city's power rates should be increased, but had different opinions on how much they should be raised.

About half the delegates gave thumbs up to a proposal that electricity prices be raised by 3 fen (36 US cents) per kilowatt hour, an increase of 6.8 percent.

Others preferred an 11.3 percent increase with the price climbing by 5 fen (6 US cents) from the current 44 yuan (5.3 US cents) per kilowatt hour.

Inflation was a major concern during the 3.5-hour price hearing since the city has just raised its water charges by nearly 30 percent since the beginning of last month.

The Beijing Electric Power Corporation said the hike would add at most 5 yuan (60 US cents) per month to the average household bill, based on an average consumption of about 100 kilowatt hours monthly.

Zhao Chaomei, a representative from the Beijing Statistics Bureau, said the small range of the power price hike was acceptable to residents since the prices of many goods for daily consumption, including grain, vegetables, eggs and oil, have jumped by a big margin since last year.

Zhao said the increase in electricity prices was expected to raise the consumer price index by 0.13 percentage points

That figure would be 0.21 percentage points if the price hike had been set at 5 fen.

Representatives from the power-generating sector, who made up one-third of the total delegates, justified the price hike as a good way to address the widening supply-demand gap in electricity.

Li Ying, a senior engineer with the National Centre of Power Studies, said higher prices may raise all users' need to save energy.

Meanwhile, the money raised from the price hike can be used to improve the city's grid, to ensure a safe power supply, and to avoid the chronic brownouts suffered by 24 provincial areas in the past few months, said Li

Statistics reveal that the power consumption for domestic use in Beijing soared by 29 percent between 2001 and 2003.

The city's total power consumption topped 25.8 billion kilowatt hours between January and July this year, rising by 14 percent year-on-year.

In order to cope with a soaring power demand, the Beijing Electric Power Corporation plans to invest 29.6 billion yuan (US$3.6 billion) into the city's grid construction and renovation by 2010, when the power consumption load is expected to reach 15 million kilowatts, almost double that of last year.

Although most of the delegates agreed that a price hike was necessary for raising funds for upgrading the electrical grid, they urged the corporation, which is the sole power supplier in Beijing, to undertake market-oriented reforms and invite watchdogs to supervise the use of the money.