Beijing may raise on-grid power tariff two more times this year after an increase implemented on Tuesday to help power plants pay for surging coal costs, according to an executive at a key mainland power producer.
The National Development and Reform Commission yesterday released on its website details of the increase in individual provinces and cities after Beijing last month decided to raise retail prices by 2.5 fen (2.85 HK cents) per kilowatt hour (kWh) or about 4.7 per cent from July 1.
Analysts said the increase, the first since June 2006, was about 1.7 fen per kWh or 5 per cent on average. Some provinces, mainly along the coast, had bigger increases because of their higher demand and the costs involved in moving coal from the interior provinces.
China Resources Power Holdings said on the tariff for its plants had risen 2 fen to 2.6 fen per kWh or about 6 per cent to 7 per cent.
However, this was not enough to cover the increase in coal costs, said chief executive Wang Shuaiting.
'Based on the increase in coal costs, the on-grid tariff should be raised by 5 to 8 fen per kWh, so we expect another tariff increase to ease the tough operating conditions,' Mr Wang said yesterday after the company shareholders' meeting.