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China expected to increase power tariffs

Citi: On grid power tariffs for coal-fired plants to rise in October.

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China will probably respond to higher feedstock prices by raising tariffs.
China will probably respond to higher feedstock prices by raising tariffs.

 China will likely raise on-grid power tariffs for coal-fired plants in some provinces by about 6 percent in October, a Citigroup research note said, in what would be the first increase since November 2009 to help generators trim losses.

Citing a meeting on Tuesday between China's top economic planner, the National Development & Reform Commission, and leading power companies, Citi said the NDRC has proposed raising prices for coal plants in seven provinces by 15-25 yuan ($2.2-$3.67) per megawatt hour (MWh), reports Reuters.

The government also proposed to raise tariffs for all natural gas-fired plants by 30 yuan per MWh, according to the note, to offset the roughly 25-percent rise in natural gas prices effective in June.
The proposal, pending approval from the State Council, would be implemented next month if inflation is in check, said the note.

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