Strengthening the State Electricity Regulatory Commission

By Qin Yu

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On February 2 2005, the State Council enacted the Supervision and Administration of the Power Industry Regulations (the Regulations). The Regulations will take effect from May 1 this year. China has been overhauling and restructuring its power sector since 2002. Among the changes, the State Electricity Regulatory Commission (the Commission) was set up in early 2003 to create a watchdog-type single institution to oversee the power industry. However, the full legal basis for the Commission to exercise its designed functions has been absent for almost two years until the long-awaited regulation was finally issued and gave it a much-needed legitimacy. It is said that the slow process of making these Regulations was a result of disagreements between the Commission and the National Development and Reform Commission (the NDRC) over the authority in regulating the power tariffs. Moreover, the Regulations have also been delayed by the amending of the PRC Electric Power Law. The amendments to this law are still in the drafting process, and it was argued that these Regulations should only have been issued after such amendments. Nevertheless, the Regulations came out of a mixture of expectation, disagreement and compromise, and are being claimed as the "foundation" of the Commission.