Beijing residents are paying higher prices for electricity starting on Wednesday. The city has raised the price 4 fen (0.48 US cents) per kilowatt-hour, representing an average monthly increase of nearly 5 yuan (60 US cents) per household.

The power price hikes partly result from the continuous rises in the price of coal, which push up the costs for power companies, according to the Beijing Development and Reform Commission (DRC).

The commission spokesman said that about 70 percent of the city's power consumption is imported from neighboring regions such as Shanxi, Hebei and Inner Mongolia.

Electricity prices nationwide rose by an average of 2.2 fen (0.27 US cents) in mid-June, and the current increase will bring Beijing household users in line with other areas.

The hike is also intended to raise consumer awareness of the need to conserve energy, the spokesman said. Domestic power consumption has climbed steeply in Beijing in recent years.

In 2000, domestic use accounted for 15 percent of the city's total electricity consumption. The ratio jumped to 17.6 per cent in 2003 and is expected to reach 19.6 per cent this year, adding still more pressure to the city's already-strapped power supplies.

The spokesman said the neighboring provincial areas had to impose brownouts many times during the summer peak-use period in order to ensure power supplies to Beijing.

But electricity fees in those provinces are higher than in the capital. Beijing residential users paid only 0.44 yuan (53 US cents) per kilowatt-hour before the hike, while users in Hebei Province pay 0.49 yuan (59 US cents) and those in Shanxi Province 0.47 yuan (57 US cents).

Money raised from the price hike can be used to improve the city's power grid to ensure a steady supply, said the spokesman.

In order to minimize the impact of price hikes on low-income groups, the municipal government has already raised social security subsidies and the minimum wage.

The city's minimum wage was raised in July to 545 yuan (US$66) per month from 495 yuan (US$60) and the minimum standard of living went up to 290 yuan (US$35) per month.

A survey conducted by the municipal Statistics Bureau shows that the average monthly power consumption per household is 118 kilowatt-hours. The new price increase will add less than 5 yuan (60 US cents) per month to the average household bill, or 56.6 yuan (US$6.80) annually.

"The amount of this price increase is acceptable to me," said 36-year-old Beijing resident Liu Yi. "After all, all the media report that the country is facing a serious power shortage. And the power charges of many other provinces are higher than Beijing."

The Beijing DRC held a public hearing on the proposed increase in September, when 28 out of the 30 delegates attending gave the hike a thumbs-up.

(China Daily November 10, 2004)