A Research On Regulatory Issues Of China's Electricity Industry

Focusing on regulatory issues of china's electricity industry, this article firstly reviews the literature related to regulation of natural monopoly industry, especially on electricity industry, and analyses the origin of regulation reform on electricity industry. After summarizing the theoretical developments of the regulation reform on electricity industry, the article reveals the existing problems on theory of the regulation reform on electricity industry. The article then analyses the regulation reform on electricity industry in developed countries.We have restructured the vertical segments in the electric power industry and have introduced competition in the generators. The generator segment is competitive, while the electric transmission and distribution networks have natural monopoly characteristics. Faced the situation, the government should put emphasis on the monopoly sector. Accordingly network access and price regulation are the important parts of regulation contents. The article explores the ways to improve the regulation and suggests China apply incentive regulation to electric transmission and distribution networks.