State Electricity Regulatory Commission, Construction of Regional Power Markets Guiding Opinion

Issued: July 31 2003

Main contents: The Opinion states that by the end of the 10th Five Year Plan (three years hence) six big regional power markets (North China, Northeast, East China, Central China, Northwest and Southern) will be preliminarily formed (Item Three). Regional power markets have two basic models: a unified market and a common market. Under a unified market model, electricity transactions and transaction prices are formed within one power market operator. Under a common market model, electricity transactions and transaction prices are formed by levels within one power market operator and its branches (Item Four). Contractual transactions should be the primary means, and spot transactions the secondary means, by which electricity transactions are carried out in a regional power market (Item Eight). Each regional power market shall determine a reasonable method for settlement of electricity charges and submit the same for approval in accordance with provisions before implementation (Item 11). Item 12 allows approved major users that purchase electricity directly from power generation enterprises to have their electricity purchase price determined by consultation between the two parties and their electricity transmission price set according to State provisions.
Related legislation: Proposal for Reform of the Power System Circular, 2002