China's major independent power producers have raised tariffs for electricity sold to power-grid companies for the second time this year to make up for soaring fuel costs. The price rises come after a decision by the National Development and Reform Commission on Tuesday to raise tariffs for electricity sold by power-grid firms to end users as part of its efforts to rein in economic growth, alleviate power shortages and boost the firms' cash flow. Huaneng Power International said yesterday that tariffs at eight out of its 19 power plants had been raised by between 50 fen and 31.84 yuan per megawatt hour (mWh). Plants in Fuzhou, Shidongkou, Shandong, Shantou benefited from the tariff increases. Steeper rises were allowed on tariffs for electricity sold to grid firms exceeding commitments in off-take agreements - jumping an average of 44.07 yuan per mWh at 13 plants. Datang International Power Generation said a unified on-grid tariff would be applied on its new generation units, with a tariff of 305 yuan per mWh on plants in its core Beijing-Tianjin-Tanshan service area and 235 yuan per mWh in plants in Shanxi. Analysts said Huadian Power International, Shandong's largest independent producer, had also managed to raise its overall tariffs slightly, even though there was an oversupply of electricity in the province. 'The magnitude of the tariff rises is disappointing,' one analyst said. 'Generally speaking, the rises, which are insufficient to offset coal cost increases, still mean squeezed profit margins at Huaneng, Datang and Huadian.' He estimated that the tariff rises translated into a 1 per cent increase in Huaneng's overall tariff, a 2.5 per cent decline in Datang's and a gain of 0.56 per cent in Huadian's. However, he said Huaneng needed to lift overall tariffs by 3 per cent to completely offset every 1 per cent rise in the cost of coal. In January, China's independent power producers raised tariffs by an average 7 yuan per mWh.
