Research On The Application Of Ramsey Pricing In Solving The Cross-subsidies In The Electricity Tariffs

With the incessant development of China's electric market reform, the existingcross-subsidies in the electricity tariffs have become the most important problem inChina's electric industry development. The reasonable solutions to the cross-subsidies inthe electricity tariffs will not only promote the large users'direct purchase of electricityand the construction of competitive electricity-selling market, but also will play a vitalrole in accelerating the electric universal service and improving the development ofChina's electric industry.Ramsey pricing is applied to the electricity pricing and cross-subsidies in thispaper. On the basis of Ramsey pricing rule, we calculate and analyze China's averageelectricity tariffs for residential and industrial consumers in 2005, direct the adjustmentof China's electricity tariffs theoretically. Based on this, three solutions to the crosssubsidiesin electricity tariffs in different phases of China's electric industrydevelopment are designed. Furthermore, the paper analyzes the application andimplementation of these solutions.