A Study On Competition And Regulatory Model In Chinese Electric Electric Industry

Electric industry is an important infrastructure industry,which influences societygreatly,and its technology characteristics are complex,and its control contents ofgovernment is abundant. The control and competition problems of electric industryare hot topics in the area of industrial economics,it is also focus problem of electricpower system reform in China,and the control of power price is emphasis anddifficulty.For a long time,power industry was operating in vertical monopoly utilities thatsupply electricity to customers within their franchised areas of service,and wascontrolled strictly by government. With the study development of technology andnetwork economy theories,this traditional idea that the whole power industry isnatural monopoly industry is taken more challenge. Under the influence of this trend,our government reformed the system of electric power and has made progress in thephasal sense, The entire industry’s operating efficiency is optimized. We have finishedthe structural separation and have introduced competition in the production sector. Weshould notice that transmission and distribution sectors are still in the state of naturalmonopoly. The electricity market has not yet formed a competitive market structure.Regulation system of Chinese electric industry is directly transformed from aplanned economy and a high degree of monopoly system. Especially in order to easethe power supply, we use administrative strategy more than market-based instruments.The entire electric power system is still running in the administrative track. Thisarticle will explore how to establish a reasonable and effective government regulationmodel and introduce competition in electric industry to make sure that our electricpower market will become a high-efficiency and low-power market on this basis.The main point of this article includes three aspects as follows. First, with theimproving technology, the increasing demand, and the problems arising fromgovernment regulatory failure, the government introduces competition into theelectric industry. However, regulations are still required in the competitive electricpower market. Both regulation and competition are in dispensable in order to achieveworkable competition in electric power industry. Second, analysis of five indexesfrom three aspects: revenue, demand and supply in SPSS shows the development ofthe electric power industry from1993to2010. There are X-inefficiency in electric industry by analyzing of the market performance. And clearly aware that notonly introduce competition in the power generation sector, but also introducecompetition into transmission and distribution sectors tobuild comprehensive and competitive market. Third, the lacking of independence andprofessional of the regulative departments, the void of electric power law, andimperfect regulative methods etc represent the lagging of the regulative reformation ofthe electric power industry in China. At last, based on the investigation of reform inthe electric power industry, some suggestions for future reform are promoted, such asestablishing tariff regulation as the core of government regulation model andimproving the regulatory methods reformation in electric power, establishing thecompetitive market on the basis of deregulation.