Price Formation Mechanism

In the range of the world, the electric power industry is changing, from monopolistic management to market competition. China has begun to make a reformation of the electric power industry which separates the electric nets and plant as the first step. In the process of mechanism reform from planned to market, the principal problem is the formation mechanism of price, and it is also the basic factor in the market. With the development of electricity power industry reformation and the forming of electricity market, the forming mechanism of electricity price, which regards market competition and commercial operation as main characteristic, is very different from present mode of price forming. At the same time, electric power industry is a kind of public and basic industry, and that makes it have a special way of the forming mechanism of electricity price. The electricity price is also the core of the electricity market reformation. It likes a thermometer, which can measure electric power's temperature and expose the structure' bug. This research based on the current situation of electric power reformation in china, tries to set up the forming mechanism of electricity price that is needed by reform development and market competition.The research is based on sufficient theoretical and positive analysis.Based on the theory of market price, this research analyses the current electricity price mechanism in our country firstly. Then it puts forward the existing problem and analyses the reason. The research indicates that, the unreasonable forming mechanism of electricity price is caused by the development of economic structure in our country and some other institutional and non-institutional influence. It makes the electric price system be more complicated, and lose the economics meaning that the price should have. In order to adapt the development of market competition, meet the need of electric power mechanism reformation, we must found a reasonable electricity price forming mechanism. And then, the research analyses the forming mechanism of electricity price in several successful foreign electricity market, and Shanghai and Zhejiang electricity market in China, which toke as tentative project in 1999.It considers that the foundation of electricity market is closely linked with the reformation of electricity price. The core of electric power reformation is setting up an electricity price forming mechanism, which meet the need of reform development and market competition. The design of electricity price forming mechanism has a direct bearing on the mode of electric power market. It should make sure of doing duty for electricity market, and, at the same time, it should stand by the objective principle of electric power manufacture in order to assure safety.In the research, our electric power reformation followed the gradually mode of the reformation of the economic mechanism. According to the time, it analyses the electricity price forming mechanisms in different stages, and finally the electricity price is formed by market totally. This project still adopts three phases electric rate. That is generating, transmitting and selling. It considered transition factor of electric power reformation, and achieved a balanced transition of electricity price forming mechanisms from planned to market mechanism.Firstly, it designs a project of electricity price forming mechanisms for generation. In advance of reformation, the mechanisms adopts improved "two part electricity price system" as transition. It established a new mathematic model of electricity price forming mechanisms.When electricity market was ripe, the main body could form electric price by means of flexible multilateral contract, build an electric price forming mechanisms basing on open and competitive electric power market, and give a detailed design on trade mode, electric rate form, dealing and the forming process of electric price which under the new mechanisms.Considering the spontaneously monopoly characteristic of transmission and distribution, this research proposed a project that fit for the reformation of transmitting management, built the "two part" transmission price forming mechanisms model, brought the forming mechanisms which based on "yardstick competition" into the model, and performed mathematic model of transmission price forming mechanisms under electricity market.The research thought that, in the electricity market, electricity dealing was generally achieved through contract. In the process of signing contract, selling and buying were forming at one time. The DSM was brought into selling price forming mechanisms. Consumers would be encourage to adjust the use of electricity actively according to the change of selling electric rate.This paper also researched the price mechanisms of the assistance service, which was necessary for electric power generation. It said that the assistance service should form contract rate through bid in long-term market, and form spot price through real time market, just like electricity was treated.Finally, according to the achievement of this research, I propose several suggestions about electric power reformation.