State Power Corp will reportedly be forced to shed 80 per cent of its generation assets in an overhaul to allow competition into a moribund power industry. The plan would also complete, in about a year, the creation of a separate regulator of the national industry under the State Council, Caijing magazine said. It said a State Council meeting on January 9 had approved the latest restructuring blueprint. The plan only awaits top-level discussions. The latest plan is shrouded in secrecy but an announcement is imminent. Evidence collected by Caijing suggested a compromise between plans for drastic reforms and those favouring the status quo. Caijing reported that the reform would create State Power Distribution, which was to retain 20 per cent of SPC's power generation assets for more stability in the high and low seasons of supply. The rest of State Power's generation assets would be injected into four to five firms. The separation of generation and transmission assets is seen as paving the way for genuine price competition between firms. Previously, a mainland industry source said part of State Power's assets would be reallocated to five state-owned generation firms. Huaneng Group, China's largest independent power producer and parent of Hong Kong-listed Huaneng Power International, will be one of them. Also uncertain was whether the five would be allowed to run cross-regional operations or carve up the national market. The more controversial part was the restructuring of China's power transmission and distribution system, the report said. On the surface, the latest reform proposal would consolidate the national transmission network into six regional grids under State Power Distribution - a plan advocated by State Power. Those would be merged into four regional grid companies when the time is ripe, Caijing said. The new five-province southern power grid, partly owned by State Power Distribution, would maintain more independence than its five northern siblings wholly owned by the new state grid firm, a source said.