Pilot Projects for the Direct Purchase of Electricity from Power Generation Enterprises by Electricity Users Tentative Procedures

The launch of pilot projects for the direct purchase of electricity from power generation enterprises by electricity users that use electricity of a higher voltage class or consume a larger amount of electricity (hereafter, Major Users) in regions with the appropriate conditions is the main substance in deepening the reform of the power system. These Tentative Procedures have been formulated pursuant to the requirements of the State Council, Issue of the Power System Reform Plan Circular (Guo Fa [2002] No.5) and the spirit of the sixth meeting of the State Council Power System Reform Working Group in order to ensure the standardized and orderly conduct of the pilot project work.

1. GUIDING IDEOLOGY, OBJECTIVES AND PRINCIPLES FOR THE PILOT PROJECTS

(1) The guiding ideology in respect of launching pilot projects for the direct purchase of electricity from power generation enterprises by Major Users (hereafter, including power distributors that conduct business accounting independently) is: by starting with China's power industry as an actual basis, drawing on useful foreign experiences, adhering to the laws of power industry development and ensuring the safe and stable operation of power grids, to actively cultivate market entities; promote the formation of a scientific and rational power pricing mechanism; and gradually build a government-regulated power market system that has fair competition, is open and orderly, develops in a healthy way, and in which government and enterprises are separated; on the basis of fair, open power grids, with definite and rational transmission and distribution electricity prices at the core and a direct link between supply and demand as the key characteristic.