Analyses On Operation Efficiency Of Yichang Power Supply Company And Incentive Regulation

This paper discusses the application of incentive regulation to electricity in China, by the empiricist analysis to the efficiency of Yichang distribution .Firstly, the paper begins with the basic theories of natural monopoly and expounds its definition, economic characters. Then the paper analyses the economic characters and technologic characters of electric power suppliers and the electric power. Deeply analyses the reasons why government regulate that business.Secondly, this paper gives an introduction to incentive regulation, and analyses the experiences and lessons of price and revenue caps, which are applied widely in these reforms.According to the analyses, we design a hybrid regulation scheme, which combines yardstick competition and benchmarking technique. After giving some introduction about the econometrical technique, especially the method of data envelopment analyses (DEA), an empiricist analysis to the efficiency of Yichang distribution is done.At the end, we give some suggestions and advice to the deregulation of electricity industry in China.