Recently, the National Development and Reform Commission ("NDRC") and the National Energy Administration ("NEA") have jointly released the Implementing Measures for the Division of Power Distribution Areas for Incremental Power Distribution Business (for Trial Implementation) (the "Measures"), immediately effective from the issue date and valid for two years.
The Measures, comprised of 26 articles in six chapters, provide for the division principles, application and processing, assets and users, change and management, etc. According to the Measures, in a single power distribution area, only one power sales company owns the right to operate the power distribution network in that area; it is also required to fulfill its duties in making power services universally accessible to the public, supplying power of the minimum amount and distributing power in a non-discriminatory manner, pursuant to applicable provisions, and perform its obligation of handing over the right to operate the power distribution network when it withdraws from the power distribution business. Moreover, the Measures note that, in principle, power distribution areas shall be divided according to geographical scope or administrative region, have clear boundaries, to avoid the repetitive construction, overlapped power supply or the failure to realize universal services and minimum-amount power supply. Furthermore, the Measures clearly state that relying on self-owned coal-fired power plants to build incremental power distribution network is not permitted, to prevent the formation of cost advantages at the price of evasion of social responsibilities.