Core Viewpoint - The National Development and Reform Commission (NDRC) has issued new regulations regarding the pricing and cost supervision of electricity transmission and distribution, aiming to enhance the regulatory framework for power grid enterprises and ensure fair pricing mechanisms [2][29]. Group 1: Cost Supervision and Pricing Methods - The newly established methods include the "Cost Supervision Method for Transmission and Distribution Pricing," "Provincial Grid Transmission and Distribution Pricing Method," "Regional Grid Transmission Pricing Method," and "Cross-Province and Cross-Region Special Project Transmission Pricing Method" [2][29]. - The cost of regional grid transmission is defined as the reasonable expenses incurred by grid operators to provide transmission services using shared transmission networks across provinces [5]. - The cost supervision principles include legality, relevance, and reasonableness, ensuring that only direct and necessary costs are included in the pricing [5][6]. Group 2: Cost Composition - The components of transmission and distribution pricing costs include depreciation and operational maintenance costs [8]. - Depreciation costs are calculated based on the fixed assets and usage rights related to transmission and distribution, following specified methods and timeframes [13][14]. - Operational maintenance costs encompass material costs, repair costs, labor costs, and other operational expenses necessary for maintaining normal grid operations [8][9]. Group 3: Regulatory Obligations - Power grid enterprises are required to establish a cost accounting system and submit regular reports to government price authorities [6][22]. - They must provide accurate financial reports and cooperate with government audits, ensuring the authenticity and completeness of the data provided [7][24]. - The enterprises must differentiate costs by voltage level and user category, ensuring proper allocation and reporting of costs and revenues [22][23]. Group 4: Pricing Calculation and Adjustments - The provincial grid transmission and distribution pricing will be determined based on the approved revenue, which includes allowable costs and reasonable returns [34][37]. - The pricing structure will consider various voltage levels and user categories, ensuring a fair distribution of costs among different users [49][50]. - Adjustments to pricing may occur due to significant changes in costs or regulatory policies, ensuring that the pricing remains aligned with market conditions and operational realities [54][56].

Core Points - The article outlines the newly established pricing and cost supervision methods for electricity transmission and distribution, aimed at enhancing the regulatory framework for power grid enterprises [1][2][30] - The methods include specific guidelines for provincial, regional, and cross-province transmission pricing, ensuring that costs are reasonable and aligned with legal standards [2][30] Group 1: Cost Supervision Principles - The cost supervision for transmission and distribution pricing must adhere to principles of legality, relevance, and reasonableness, ensuring that only direct and necessary costs are included [2][4] - Costs must comply with the Accounting Law of the People's Republic of China and relevant financial regulations [2][4] Group 2: Cost Composition - Transmission and distribution pricing costs consist of depreciation and operational maintenance costs, which include materials, repair, labor, and other operational expenses [5][6] - Specific costs such as materials and repair fees are capped at a percentage of the newly added fixed assets during the supervision period [15][39] Group 3: Excluded Costs - Certain costs are explicitly excluded from the pricing, including those unrelated to transmission and distribution services, such as expenses from auxiliary business units and penalties [8][10] - Costs that are compensated by government subsidies or donations are also not included in the pricing calculations [8][10] Group 4: Pricing Methodology - The pricing for provincial electricity transmission is determined based on the approved costs and reasonable returns, with a focus on promoting high-quality development of power grid enterprises [33][36] - The average transmission price is calculated by dividing the total approved revenue by the total electricity transmitted [47][48] Group 5: Regulatory Framework - The regulatory framework mandates that power grid enterprises report their cost data annually, ensuring transparency and accountability in pricing [28][34] - The methods are set to be implemented starting December 1, 2025, with a validity period of ten years [30][55]

Core Viewpoint - The National Development and Reform Commission has released four revised methods regarding transmission and distribution pricing, inviting public feedback, which has sparked discussions in the industry about cost allocation in the new power system [1] Summary by Sections Revision Details - The revised methods include the "Cost Supervision and Audit Method for Transmission and Distribution Pricing," the "Provincial Grid Transmission and Distribution Pricing Method," the "Regional Grid Transmission Pricing Method," and the "Special Project Transmission Pricing Method for Inter-provincial and Inter-regional Projects" [1] - The effective period of the "Cost Supervision and Audit Method" has been extended from 3 years to 10 years, enhancing policy stability and predictability [1][4] Cost Allocation Issues - A core issue in the current electricity price revision is the cost allocation due to the high proportion of intermittent renewable energy and fluctuating demand, which affects the operational costs of the system [2] - The revised "Cost Supervision and Audit Method" clarifies which costs are considered "reasonable expenses" and which should be excluded, including new items like "leasing fees," "safety fees," and "environmental protection taxes" [3][4] Regulatory Enhancements - The revision emphasizes both incentives and constraints, aiming to better support the construction of a new power system, and strengthens regulatory oversight by innovatively determining the financing costs of grid companies [3][4] - The synchronization of cost audits and pricing for provincial and regional grids is expected to improve regulatory efficiency and clarity in asset allocation [4] Industry Reactions and Concerns - The revisions have raised concerns among electricity users, power sales companies, and renewable energy investors, particularly regarding the definition of "sales electricity" and the exclusion of new energy storage station costs from transmission pricing [5][6] - There is a need for further clarification on how costs related to new energy storage stations will be managed, as current regulations do not include these costs in system operating expenses [7][9] Compensation Mechanisms - Different provinces have begun implementing capacity compensation and pricing mechanisms for new energy storage stations, which have positively impacted regional investment confidence [7][8] - The compensation methods vary, with some provinces allocating costs to the generation side while others pass them on to users, highlighting the need for a balanced approach to compensation [8][9] Future Considerations - The industry emphasizes the importance of a well-structured capacity compensation mechanism to ensure sustainable development and maintain system reliability [10][11] - As renewable energy's share increases, the demand for auxiliary services will grow, making energy storage a key resource for providing necessary services [11]

Core Viewpoint - The recent announcement of four revised pricing methods for electricity transmission and distribution has garnered significant attention from electricity users, power sales companies, and investors in the renewable energy sector, focusing on the cost-sharing mechanisms within the new power system [1][2]. Summary by Sections Revision Details - The revised methods include the "Cost Monitoring and Audit Method for Transmission and Distribution Pricing," the "Provincial Grid Transmission and Distribution Pricing Method," the "Regional Grid Transmission Pricing Method," and the "Cross-Province and Cross-Region Special Project Transmission Pricing Method." The "Cost Monitoring and Audit Method" has the broadest applicability and highest attention, with its validity period extended from 3 years to 10 years compared to the previous version published in 2019 [1][3][4]. Cost Structure Changes - The revision clarifies which costs are considered "reasonable expenses" for grid companies, adding items such as "leasing fees," "safety fees," "environmental protection taxes," and "water resource taxes" to the allowable costs, while excluding costs related to pumped storage power stations and new energy storage stations [3][4]. Implications for Pricing and Regulation - The extended validity period and synchronized pricing audits across different grid levels are expected to enhance regulatory efficiency and clarity in asset categorization, thereby improving investment and management effectiveness in the electricity grid sector [4][5]. Industry Concerns - Key concerns raised by industry stakeholders include the definition of "sales electricity" in relation to line losses and the exclusion of new energy storage station costs from transmission pricing, prompting discussions on how to manage these costs effectively [5][6]. Capacity Compensation Mechanisms - Various provinces have begun implementing capacity compensation and pricing mechanisms for new energy storage stations, with compensation rates varying significantly. For instance, Inner Mongolia has set a compensation standard of 0.35 yuan/kWh, while Hebei and Gansu have established capacity pricing standards of 100 yuan/kW and 330 yuan/kW, respectively [7][8]. Future Considerations - The need for a balanced approach to compensating new energy storage resources is emphasized, as under-compensation could hinder sustainable development, while over-compensation could lead to inefficiencies. The industry calls for a comprehensive capacity compensation policy to stabilize investor confidence and ensure system reliability [9][10][11].