National Development and Reform Commission and National Energy Administration, Measures for the Administration of the Orderly Deregulation of the Power Distribution Grid Business

These Measures shall apply to existing power distribution grids, other than the existing assets of power grid enterprises, invested in, constructed and operated by other enterprises (Article 2).

Main contents: The active participation of private-sector capital in incremental power distribution grid business and the determination of investment entities through market competition is encouraged (Article 4).

Apart from the existing assets of power grid enterprises, companies that have absolute control over existing power distribution grid assets, including high and new technology industrial parks, economic and technology development zones, local power grids and bulk sale counties, but are not engaged in power distribution grid business may apply to, and secure the approval of, the energy administrative department of the local government to engage in power distribution grid business. Where access conditions for power sale companies are satisfied, power sale business may be engaged in after carrying out the access procedures for power sale companies (Article 12).

Where a power grid enterprise has the right to operate an incremental power distribution grid in which it has a controlling interest, it shall engage only in power distribution grid business in the distribution territory. Its competitive power sale business shall be gradually divested to an independent power sale company. Power grid enterprises are encouraged to establish, with private-sector investors, companies with diverse property rights through means such as equity cooperation to operate power distribution grids (Article 15).

Issued: October 8 2016

Effective: as of date of issuance for three years

Applicability: For the purposes of these Measures, the term “power distribution grid business” means the investment in, and construction and operation of, incremental power distribution grids that satisfy electricity distribution needs and planning requirements as well as investment in power distribution grid capacity increases and expansion by means of the mixed ownership model.

In principle, power distribution grids mean grids of up to 110 kV class and local grids for industrial parks (economic development zones), etc. of up to 220 (330) kV class.

These Measures shall apply to existing power distribution grids, other than the existing assets of power grid enterprises, invested in, constructed and operated by other enterprises (Article 2).

Main contents: The active participation of private-sector capital in incremental power distribution grid business and the determination of investment entities through market competition is encouraged (Article 4).

Apart from the existing assets of power grid enterprises, companies that have absolute control over existing power distribution grid assets, including high and new technology industrial parks, economic and technology development zones, local power grids and bulk sale counties, but are not engaged in power distribution grid business may apply to, and secure the approval of, the energy administrative department of the local government to engage in power distribution grid business. Where access conditions for power sale companies are satisfied, power sale business may be engaged in after carrying out the access procedures for power sale companies (Article 12).

Where a power grid enterprise has the right to operate an incremental power distribution grid in which it has a controlling interest, it shall engage only in power distribution grid business in the distribution territory. Its competitive power sale business shall be gradually divested to an independent power sale company. Power grid enterprises are encouraged to establish, with private-sector investors, companies with diverse property rights through means such as equity cooperation to operate power distribution grids (Article 15).