Evaluation On The Effect Of China's Power Transmission And Distribution Price Reform

Since the 1980s,many countries in the world have restructured their power industry.The common point is to privatize the public suppliers,break the monopoly and introduce various new regulatory arrangements.Finland began to adjust and deregulate the power market in 1995,which laid a foundation for distribution regulation.However,the Finnish electricity market law(386/1995)only stipulates that the distribution price should be reasonable and the distribution companies should operate effectively,but there is no clear regulation method.The regulation mode of distribution business in the early stage is that the regulation organization evaluates the rationality of distribution pricing after the event according to the observed rate of return.In the first investigation and judgment on' the rationality of distribution pricing in 2000,the basis of regulation mode was formed.At this time,Finland's post regulation only investigates those companies suspected of charging excessive fees from customers.The regulatory body has no formal legislative power and only makes relevant decisions based on specific circumstances.In the first regulation period from 2005,Finland started the regulation of distribution enterprises in advance.Finland,s distribution regulation model can be summarized as a kind of prior revenue ceiling regulation.The energy market authorities set a reasonable rate of return for the regulated enterprises,while the regulated distribution operators set their own prices.The revenue ceiling is the maximum acceptable revenue,which is equal to the total acceptable cost.Looking back on the history of China's electric power reform,it goes back to 1985 when the State Economic and Trade Commission issued relevant regulations and introduced the mechanism of encouraging competition,which is the starting point of electric power market-oriented reform.In 1997,the State Council issued a document,separating the government from the enterprise,and launched a pilot simulation market mechanism.In August 1998,the state power company launched a new reform plan,which includes "separation of enterprises and institutions,province as the entity" and "separation of power plants and networks,online bidding",etc.,and first carried out pilot power generation side power market in six provinces and cities.From 2002 to 2015,the separation of power plant and network,competitive bidding and separation of main and auxiliary power were realized,but the power grid enterprises still occupied the monopoly position in the industry.In March 2015,the State Council issued a series of reform documents,such as”No.9 document".At this time,the focus of the power system reform is the competition outside the transmission and distribution business.After that,the national Development and Reform Commission jointly studied with relevant departments and issued a series of supporting documents,which not only put forward specific requirements for some important reform tasks,but also formulated specific operation and implementation implementation advice.Since its promulgation,China's power sector reform has made the most substantive progress after"separation of power plant and power grid,,that is,the independent pricing mechanism of "allowable cost+reasonable income" in the transmission and distribution link has been defined,and the formulation of trans provincial power transmission and distribution price,provincial power transmission and distribution price,local power distribution price and incremental distribution price can be implemented through a series of supporting systems.However,by comparing the actual practices of domestic and foreign cap regulations,it can be found that the regulation of "allowable cost+reasonable income" implemented in China since 2016 is not optimal,which is too loose for the cost audit of power grid enterprises and does not play an effective role in simulating the market mechanism.Finland's energy regulation is much more effective than anywhere in the world,and Finland's regulation mode mainly focuses on distribution business.Therefore,we can learn the applicable part of Finland's regulation mode,and put forward some feasible suggestions for the regulation reform of China's transmission and distribution industry.In order to achieve the research purpose,the research method of this paper is:in the design of revenue cap regulation system,we will refer to Finland's regulation practice,i.e.assuming that China will implement revenue cap regulation system combining with conditional scale competition in transmission and distribution price;in the selection of impact indicators,this paper specifically studies the effect of revenue cap regulation on efficiency improvement,transmission and distribution cost,electricity price and GDP,etc.The impact is simulated and analyzed by CGE.In the selection of research period,this paper selects 2005-2017 as the sample period,uses the panel data of 2005-2014 and the StoNED model to calculate the required variable cost frontier,uses counter-factual analysis method,uses the actual cost data and efficiency results of 2015-2016 to calculate the the cost savings and the proportion of electricity price reduction in the hypothesis of two years of the implementation of the income ceiling regulation.Then,assuming that China introduced the income ceiling regulation in 2017,the impact of this regulation on other industries and the macroeconomic impact can be analyzed.By using Finland's revenue cap regulation model and StoNED model to estimate the efficiency level of 23 home appliance network enterprises in 2005-2014,the conclusion is that the average cost efficiency is between 0.818-0.958,and the average efficiency is 0.911,which means that the efficiency level of China's transmission and distribution enterprises still has some room to improve.Based on the above results,this paper concludes that if China implements the simplified revenue cap regulation based on Finnish regulation practice in the transmission and distribution industry in 2015-2016,it will save about 183.9 billion yuan of costs,and achieve an average price reduction of 5.9%.Based on the above conclusions,we use CGE model to further study the macroeconomic effect of income cap regulation.The conclusion of this part is that the production price of the secondary industry is more sensitive to the decline of electricity price,and other industries are less sensitive to the decline of electricity price;at the same time,the output of the industry with a large decline of price increases greatly;the decline of electricity price will have different effects on the macroeconomic indicators,and generally speaking,the decline of electricity price will promote the overall macroeconomic of our country.It shows that if we regulate the transmission and distribution links in an incentive way,it will not only reduce the cost,but also promote the development of the national economy.