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Research Report of Transaction and Accounting in China's Electricity Industry, 2008

In 2008, the scaleof China's electrical power transactions across regions and provinces wasfurther expanded. Due to the high price of coal and changing demand and supplystate, barriers across some regions increased and one or two contracts acrossprovinces failed to perform. The total amount of electrical power transactionsacross regions and provinces reached 470.57 billion KWH in 2008, 134.89 billionKWH of which was made by transactions across regions and 335.68 billion KWH bytransactions across provinces. At present, electrical power transactions acrossregions and provinces have been carried out in 25 provinces (regions or cities)and 6 power regions except Beijing, Tianjin, Xinjiang, Tibet and Hainan.


One kind of transactions is government-designated. The electricity price,distribution, accounting and charge of this kind of transaction, such as theelectricity transmission project of the Three Gorges, electricity of Sichuansent east, electricity of Heilongjiang and Henan sent out of provinces, etc,should all keep in line with the government's regulations.

The other kind of transactions is among enterprises. Based on "Guidelineson Improving Electrical Transactions across Regions", this kind of transactionis mainly carried out among electricity grids, electricity grids andelectricity plants by means of offering nominal quotation, appointing proxy,bidding together and so on. At present, this transaction is mainly throughplatform of power grid enterprises and the electricity price, distribution andcharge should be set by both sides.

In 2008, based on the operating procedures, most electricity grid enterprisesaccounted the electrical charges of newly-built generating sets which had metthe operation standards. As for the surplus capital made by adjusted price ofnewly-built generating sets against the operating price, some electricity gridsin Anhui, Henan and Jilin issued a program to make good use of the surpluscapital and reported it to the electricity supervision institutions and relatedgovernment departments. Some enterprises did not distribute the surplus capitalin time, which caused a relatively lower tentative price of thermal power and abigger gap between tentative price of hydroelectric power and fixed price.