The National Development and Reform Commission ("NDRC") has recently distributed the Circular on Matters Concerning the Electricity Price Reduction for General Industrial and Commercial Use (the "Circular").
The Circular clearly states that measures will be taken in two steps to cut the power price, in order to achieve the target of reducing the electricity price by ten percent on average for general industrial and commercial consumption. In particular, the first batch of price-cutting measures, all rolled out to lower the power price for general industrial and commercial use, have come into force as of April 1, 2018. According to the Circular, the first batch of price-cutting measures include "fully putting into practice policies already announced to eliminate power-grid-related fees", "advancing reform in power transmission prices for regional power grids and trans-provincial and cross-regional special projects", "further regularizing and reducing fees charged for power grids" and "temporarily lowering the power transmission and distribution prices". In addition, the Circular notes that an average of 70 percent, five percent decrease compared with the previous 75 percent, of the approved growth in investment amount for scheduled power transmission and distribution by a provincial power grid enterprise could be used to accrue depreciation. Furthermore, the Circular calls for efforts to improve the two-tier power price system and gradually subject the power consumption for general industrial and commercial and other purposes, if within the capacity limits of transformers, to the two-tier power price system for the grand industry.