Starting with the “Online Rumor about Document No. 1502”: The debate over time-of-use electricity pricing must not be driven by emotions.

Recently, a widely shared document titled “NDRC Operation [2025] No. 1502—Notice on Effectively Carrying Out the Signing and Performance of Medium- and Long-Term Power Contracts for 2026” has sparked considerable controversy within the power industry. This document has been widely interpreted across social media and industry circles, even earning alarming labels such as “abolition of time-of-use pricing,” “a seismic shift for commercial and industrial energy storage,” and “full marketization of retail electricity prices.”

According to Energy magazine, this is a classified operational notice. Rather than a price‑policy document publicly released to the general public, its intended purpose, target audience, and policy authority preclude it from being simply equated with a “guiding document for time‑of‑use electricity pricing reform.”

One document, two interpretations.

What has truly sparked controversy in the industry is not the document itself, but the conflicting interpretations surrounding a single sentence: “In principle, electricity users directly participating in market transactions will no longer be subject to government‑set time‑of‑use pricing.”

A radical view holds that this is a clear signal: government‑set, fixed time‑of‑use tariffs are on the way out, and the retail side will fully transition to flexible mechanisms that track market fluctuations. The aggressive trading policies introduced in Shaanxi and other regions for 2026 are seen as a “first‑to‑implement” benchmark.

However, within the existing electricity reform policy framework, “direct market participants” are defined clearly and strictly—typically referring to large‑scale users who directly access the wholesale market and enter into medium- to long-term contracts with power generators. This does not encompass all “market‑oriented users,” nor does it include the vast majority of small and medium‑sized industrial and commercial customers who participate in trading through retail power suppliers.

Accordingly, another perspective holds that elevating operational management requirements applicable to the wholesale side directly to the status of “higher‑level legislation” governing retail electricity pricing reforms is not only untenable from a policy‑logic standpoint but also constitutes a textbook case of conceptual sleight of hand.

The direction has been set, but the path remains unclear.

Adjustments to the retail electricity pricing regime have traditionally been led by the price‑regulating authorities; for instance, Documents No. 1439 and No. 136 both embody clear price‑policy objectives. By contrast, Document No. 1502 originates from the economic‑operation management channel, with its core objective being to ensure both the contracted share of medium- and long-term power supply agreements and the stability of their performance.

If one were to conclude, on this basis, that retail time-of-use pricing would be entirely phased out, it would inevitably overlook systemic arrangements such as consumer protection measures, safety-net mechanisms, and safeguards against price volatility. Although the gradual phasing out of government‑set fixed time‑of‑use tariffs is indeed a long-term trend, characterizing this article as an “order to abolish retail‑side time‑of‑use pricing” would be inaccurate.

Local “one-step” experiments, such as Shaanxi’s shift to transmitting wholesale‑side time‑of‑day average prices to the retail end, should not be hastily equated with a nationwide policy that must be adopted immediately.

Against the backdrop of an electricity market that has yet to reach full maturity and where spot prices remain subject to price caps and administrative constraints, time-of-use pricing cannot be simply dismissed as a “remnant of planning”; rather, it serves, to a certain extent, as a “risk buffer.”

At the current stage, time-of-use pricing serves at least three practical functions: it acts as an implicit demand-response mechanism, guiding load adjustments through stable, predictable price differentials; it provides a “price trajectory” for integrating renewable energy, offering long-term expectations for various generation sources; and, most importantly, it serves as the final safeguard on the retail side, preventing extreme spot‑price volatility from being passed indiscriminately onto end‑users.

International experience has repeatedly demonstrated that, when price mechanisms remain unstable, excessive marketization on the retail side often ends in substantial social costs. The extreme case in Texas in 2021 occurred within a highly market‑oriented system; its lesson is that, without adequate safety nets, the consequences of price failures can directly overwhelm society’s capacity to absorb them.

Beware of losing control

Of course, we must also acknowledge that the existence of time-of-use electricity pricing has, to a certain extent, “protected” the distorted development of energy storage in the industrial and commercial sectors. From this perspective, reforming time-of-use electricity pricing as soon as possible has become an urgent priority.

For solar PV and energy storage investors, as well as power‑selling companies, this debate over time‑of‑use pricing should not be reduced to a simple “positive” or “negative” outcome.

With the phase-out of fixed‑time electricity pricing, the previous revenue model—based on fixed time periods and fixed price differentials—will no longer be viable. Project value will henceforth derive not from “institutionally prescribed price spreads,” but from genuine operational efficiency, trading capabilities, and risk‑management expertise.

For the industry, this is not merely a reshuffling of market shares; it represents a harsh raising of the entry barrier. Power‑sales companies must evolve from mere arbitrageurs to risk managers, while energy‑storage investors need to shift from asset ownership to resource‑operation expertise.

In summary, the direction of electricity market reform has never wavered, but it is by no means a race to see who can be more radical.

Energy magazine concludes that the overarching direction of reform is sound, but the choice of implementation path must be exercised with utmost restraint. Administrative intervention in time-of-use pricing can be phased out, provided it is underpinned by a sufficiently transparent pricing framework and a robust capacity to manage risks.