Research On Monopoly And Regulation Of Electricity Industry

The natural monopoly theory mainly experiences the stages of the economies of scale mixed with the natural resource scarcity, scale economy, cost sub additivity and network economic theory. Up to the 1980s, a new natural monopoly judgment standard appeared. According to the new natural monopoly standard, various domains of the electricity industry have different natural monopoly attributes. The strong scale efficiency of the electricity generation enterprise does not conform to the new natural monopoly standard. Because of the network efficiency of the electric power transmission domain, it is divided into the natural monopoly profession and implemented the monopoly management. It is competitive in the sales industry, thus it should be opened to the competitors. After the reform of the electric industry, some new monopolization appeared in the electric industry, such as restrictive practice and administrative monopoly. The electric power transmission domain which has the natural monopoly attribute continue enjoying the dominant position. Then one can make use of its dominant position for its own profit, on the other hand it can also affect downstream competitions. After the analysis of the successful experience of the power sector reforms in Western countries, we should regulate business acts in all areas of the power industry under the anti-monopoly law, and cultivate the market operating rules. Thus the electricity regulation should start with the adjustment of the industry structure, and then split the industry sectors based on their natural monopoly attributes. Then we should innovate the management method of the transmission domain and separate the proprietary rights from management rights, establish electrical free trading platform, and prevent monopoly behavior in the generation and sales sector of electricity. Let the SERC deal with the initial acceptance and investigations of antitrust cases, and give the antimonopoly law enforcement agencies rights to make the final decision. Finally, we should improve the trade legislation and put the sector reform objectives, methods, and industries operating rules into the Electric Power Law.