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China Yangtze Power Co Ltd (CYPC) under China Three Gorges Project Corporation (CTGPC) has announced that after completing its 2006 plan the Three Gorges Power Plant can produce approximately 45.8 billion kilowatt-hours of additional electricity, according to People's Daily on June 26.

However, it seems that many consumers have not benefited from the reforms that got underway in 2002.

With improvements in technology, the average cost price of installed capacity fell to 4000 yuan (US$500) per kilowatt in 2005 from 5000 yuan (US$625) per kilowatt in 2002. According to statistics this has resulted in investment being reduced by 140 billion yuan (US$17.5 billion).

With the cost price falling consumers still have to pay more than previously. In 2004 the average power rate increased by 0.0284 yuan (US$0.00355) per kilowatt-hour over the last year, and by 0.0252 yuan (US$0.00315) per kilowatt-hour in 2005.

In 2004 approximately 1.7 trillion kilowatt-hours of electricity was consumed and the figure reached 2 trillion in 2005. Based on these figures, consumers are required to pay an extra 160 billion yuan (US$20 billion), which equals the total investment on the Three Gorges Project.

An anonymous official from the State Electricity Regulatory Commission indicated that the nationwide shortage of electricity lasting for several years had been eased and it was a golden opportunity to deepen reforms within the industry.

In past years the production of the Three Gorges Power Plant was unable to fulfill the needs throughout the country. But changes in demand have created fresh opportunities to deepen reform.

The goals of reform have been identified as providing people with cheaper and safer electricity by way of a high quality service. But to the contrary consumers are paying more money for power. On the one hand, the electricity industry has saved 140 billion yuan in investment; while on the other it has earned an extra 160 billion yuan. Thus its profits have soared to 300 billion yuan (US$37.5 billion). Meanwhile people have been required to combat electricity shortages for three years.

The system of reform should break the monopoly, introduce competition and improve the market efficiency. Yan Maosong, an electricity expert, has pointed out that the reforms, deviating from the original objectives, appeared to benefit a small number of interest groups.

According to People's Daily, to some extent the reforms were always mapped out by professionals in this area who themselves maintained close relationships with the electricity giants.

The interest groups will only enhance their current position in power generation and reject any measures that challenge them.

It seems that only through increasing public participation and bringing a range of interest groups together can electricity reform achieve any real success.

(China.org.cn by Wang Ke, June 27, 2006)