China coal-fired power companies on the verge of bankruptcy petition Beijing to raise electricity prices

The Beijing Electric Power Industry Association has asked authorities for permission to raise electricity rates as coal prices skyrocket

Petition follows a letter last month from 11 coal-fired power companies within the Beijing-Tianjin-Tangshan power grid asking for relief

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Supply shortages have driven up coal prices in China and some electricity suppliers in Beijing are incurring dangerous losses. Photo: Reuters

Published: 5:30pm, 10 Sep 2021Updated: 10:05pm, 10 Sep 2021

The Beijing Electric Power Industry Association has joined 11 coal-fired power companies in petitioning authorities to raise electricity rates to avoid bankruptcy amid surging coal prices.

Supply shortages have driven up coal prices in China and coal-fired power stations can only raise rates to accommodate increasing operational costs by as much as 10 per cent, with a large part of electricity prices fixed by the government.

But last year, the National Development and Reform Commission, the country’s top economic planning agency, prohibited all rate rises.

The Beijing Electric Power Industry Association said this week it had sent a letter to the Beijing Municipal Commission of Urban Management petitioning for increased rates. Five member companies had incurred losses in the first seven months of the year, ranging from 20 million yuan (US$3.1 million) to 192 million yuan, the association told the South China Morning Post.

The petition echoed a letter sent by 11 coal-fired power companies within the Beijing-Tianjin-Tangshan power grid last month, which said they were losing money and were on the verge of bankruptcy due to steep increases in coal prices.

“It has severely disrupted normal electricity transactions and stable electricity supply … operations are extremely difficult, with some companies experiencing capital chain ruptures,” said the letter, which was also circulated online.

The companies said coal prices rose by 65.3 per cent in July compared to a year ago, and by 56.9 per cent in June, while the benchmark price for electricity in the region set by authorities had dropped this year.