Chapter 1 General Provisions Article 1 is to standardize the price management of urban water supply, protect the legitimate rights and interests of water supply and water users, promote the development of urban water supply, save and protect water resources, according to the "People's Republic of China and the People's Republic of China" These Measures are formulated in accordance with the provisions of laws and regulations such as the National Price Law, the Urban Water Supply Regulations, and the Government’s Price Behavior Rules. Article 2 These Measures shall apply to the establishment or adjustment of urban water supply prices within the territory of the People's Republic of China. Article 3 The price of urban water supply refers to the price at which urban public water supply enterprises (hereinafter referred to as water supply enterprises) use certain engineering facilities to carry out necessary purification, disinfection and transportation of surface water and groundwater to ensure that the water quality and pressure comply with national regulations. The price of water supplied to users after standardization. Article 4 The price department of the people's government at or above the county level is the department in charge of urban water supply prices. The administrative departments of urban water supply at or above the county level shall, according to the division of responsibilities, assist the government price department in the management of urban water supply prices. Article 5: In principle, the price of urban water supply shall be set by the government, and the specific pricing authority shall be implemented in accordance with the provisions of the local pricing catalog. Chapter 2 Water Price Setting and Adjustment Article 6: Urban water supply prices should be formulated in accordance with the principles of cost coverage, reasonable benefits, water conservation, and fair burden. Article 7 The price of urban water supply shall be formulated based on cost supervision and review and in accordance with the method of "allowed cost plus reasonable income". The allowed income from the water supply business of water supply enterprises shall first be determined, and then the water prices for users shall be determined based on the allowed income.

The permitted revenue from the water supply business of water supply enterprises consists of permitted costs, permitted profits and taxes. Article 8 The permitted costs of water supply enterprises include depreciation of fixed assets, amortization of intangible assets and operation and maintenance fees, and relevant expenses are determined through cost supervision and review. Article 9 The permitted income shall be calculated and determined by multiplying the effective assets by the permitted rate of return. Among them:

(1) Effective assets are assets invested by water supply enterprises and assets related to water supply business that can be withdrawn for income, including net fixed assets, net intangible assets and working capital. Effective assets that can accrue income shall be determined through cost supervision.

(2) The calculation formula of the permitted rate of return is: permitted rate of return = return on equity capital × (1-asset-liability ratio) return on debt capital × asset-liability ratio.

Among them: the equity capital return rate is determined based on the average national 10-year treasury bond yield rate in the year before the start of the regulatory cycle plus no more than 4 percentage points; the debt capital return rate is based on the one year before the start of the regulatory cycle. The annual loan market quotation rate (LPR) is determined; the asset-liability ratio is determined with reference to the average value of the actual asset-liability ratio of the enterprise in the three years before the beginning of the regulatory period. If the price is determined for the first time, it is determined based on the financial data of the previous year when the cost supervision and review is carried out. Article 10 Taxes. Including income tax, urban maintenance and construction tax, and education surcharge, which are determined in accordance with the relevant national tax laws. Article 11 When determining the average water supply price of water supply enterprises, the utilization of production capacity in the current period shall be considered. The calculation formula is:

When the actual water supply volume is not less than 65% of the designed water supply volume,

The average water supply price of water supply companies = permitted revenue ÷ approved water supply volume;

When the actual water supply volume is less than 65% of the designed water supply volume,

The average water supply price of water supply companies = Allowed revenue ÷ {Authorized water supply volume ÷ [Actual water supply volume ÷ (Designed water supply volume × 65%)]}.

The average water supply price and permitted revenue do not include value-added tax. The water supply price including value-added tax is calculated and determined by each locality based on the actual tax rate implemented by water supply enterprises; the approved water supply volume = water withdrawal × (1-self-use water rate) × (1-Leakage rate). The water intake volume, self-use water rate and leakage rate are determined through cost supervision and review. Article 12 The price of water supply by user category shall be based on the average water supply price of water supply enterprises and the local water use structure, and in accordance with the principle of maintaining capital and low profits for residents' domestic water use and making reasonable profits for other water use, taking overall consideration of the development needs of local water supply undertakings, promoting water conservation, Social affordability and other factors are assessed. Article 13 The supervision cycle of urban water supply prices is in principle three years. If it is estimated that the water supply price needs to be adjusted, it should be adjusted in time. If the price adjustment range is large, it can be adjusted in steps.

If an upstream and downstream linkage mechanism such as water supply price and raw water price is established, the supervision period can be appropriately extended. The specific price supervision cycle period shall be clarified by the pricing department based on local conditions.

Taking into account factors such as the local economic and social development level and user affordability, if the water supply enterprise has difficulty in reaching the permitted income due to insufficient price adjustment, the local people's government shall provide corresponding compensation. Article 14: Encourage all localities to encourage water supply enterprises to improve the quality of water supply services. When determining water supply prices, water supply service quality factors should be fully considered, and water quality standards, water security, and complaint handling should be regarded as important factors in determining the reasonable profits of water supply enterprises. Chapter 3 Water Price Classification and Pricing Methods Article 15 Urban water supply shall implement classified water prices. According to the nature of use, it is divided into three categories: residential water, non-residential water, and special water.

(1) Residential water mainly refers to the daily water used by urban residential households.

(2) Non-residential water mainly refers to water used by industry, business services and administrative institutions, municipal water (environmental sanitation, greening), ecological water, fire-fighting water, etc.

Domestic water for school teaching and student life, domestic water for social welfare places such as nursing homes and care institutions for the disabled, domestic water for religious sites, community organization work buildings and residents’ public welfare service facilities, etc., according to residents Domestic water prices are implemented.

(3) Special water use mainly includes car washing, pure water production using tap water as raw material, golf course water, etc.

The specific scope of various types of water use will be determined by the provincial urban water supply administrative department in conjunction with the price department at the same level based on local actual conditions.