China on Wednesday announced that it will raise the price of non-residential power and thermal coal in order to ease power shortages and reduce financial pressure on power companies.

The National Development and Reform Commission (NDRC) announced Wednesday that it will raise the price of electricity for non-residential use by an average of 0.03 yuan (0.47 U.S. cents) per kilowatt-hour (kwh) nationwide starting Thursday.

The move marks the first nationwide power price hike since November 2009, when the price of electricity for non-residential use was lifted by 2.8 fen (0.4 U.S. cents) per kwh.

Residential electricity prices will not be raised at this time, although China will adopt a gradual power tariff mechanism for residential use, which means prices will increase with consumption, the NDRC said.

The NDRC also said that it will allow the contract price of major thermal coal to float by no more than 5 percent next year, but the market price of 5,500-kilocalorie coal should be capped within 800 yuan per metric ton at major shipping ports in north China.

The prices will be implemented until thermal coal prices stabilize on a national level, it said.

The power tariff plan will consist of three levels, the NDRC said. The top 5 percent of consumers will be charged the highest price, while 80 percent of consumers will not be affected by the price hike at all, the NDRC said.

Detailed adjustments for residential power prices will be decided at local public hearings, the NDRC said.

Low-income families will enjoy a free supply of 10 to 15 kwh of electricity each month, saving them 60 to 90 yuan each year, the NDRC said.

China's power consumption rose 11.35 percent in October from a year earlier to 379.7 billion kwh in October, the National Energy Administration (NEA) said earlier this month.

China will likely face a power shortage of 30 to 40 million kilowatts during this winter and the coming spring, according to the China Electricity Council (CEC).

Source:china.org