The National Development and Reform Commission ("NDRC") has recently drawn up and issued the Measures for Fixing the Electricity Transmission Prices for Regional Power Grids (for Trial Implementation) (Draft for Comment) (the "Draft for Comment") and the Measures for Fixing the Electricity Transmission Prices for Special Projects Across Provinces and Regions (for Trial Implementation) (Draft for Comment) for public consultation by December 14, 2017.
The Draft for Comment, comprised of 16 articles in five chapters, provides for the methods to calculate the allowable income, the methods to compute the electricity transmission price, the mechanism to adjust the electricity transmission price, etc. According to the Draft for Comment, the transmission prices for regional power grids shall be assessed in advance; in other words, the prices shall have been assessed prior to the start of each regulatory cycle, which lasts three years temporarily. The very first regulatory cycle will start from 2018 and end in 2019. Additionally, it is stipulated that the transmission prices for regional power grids shall be subject to the two-tier power pricing system in principle. Furthermore, the Draft for Comment clearly specifies that fees incurred by services purchased for regional power grids from the electricity market in a unified manner, such as the frequency modulation services and ancillary services in the electricity market, shall not be counted into the transmission costs for regional power grids; instead, these fees shall be allotted to related provincial power grids, and recovered through the transmission prices for provincial power grids.