An Empirical Analysis On The Effect Of Yardstick Regulation In China's Power Transmission And Distribution Industry

In 2015,the state council promulgated "the opinions of the CPC central committee and the state council on further deepening the reform of the power system"(zhongfa[2015]no.9),stipulating the implementation of the power pricing mechanism of "permitted cost+reasonable benefit" in the power transmission and distribution sector.A series of supporting measures following the guideline set the price of power transmission across provincial power grids,transmission and distribution of provincial power grids,distribution prices of local power grids and distribution prices of incremental power distribution networks.With the continuous advancement of the reform of power transmission and distribution industry,the degree of electricity marketization in China is also improving,but in general,the electricity price marketization is still at a low level,which cannot meet the needs of economic and social development.Therefore,in the current situation,the establishment of independent transmission and distribution pricing mechanism and transmission and distribution price supervision mode has become an important part of China's power regulation reform.For this reason,this paper introduces the yardstick regulation of Norwegian power transmission and distribution industry into China's power transmission and distribution field for the first time,calculates and analyzes the efficiency of power transmission and distribution links through empirical research,and simulates the cost savings of Chinese power grid enterprises.The empirical study of this paper not only analyzes the efficiency of the transmission and distribution links,provides a basis for improving the regulation mode and improving the efficiency of natural monopoly enterprises,but also provides specific Suggestions for the successful implementation of the regulation mode and path of"allowable cost+reasonable benefit",which makes this study more realistic.In this paper,However,there are three differences between the empirical study and the Norwegian model:first,on the data,the Norwegian yardstick competition regulation used in cost including operation and maintenance cost,energy loss,loss of load value,failed to supply the energy costs and the cost of capital,and the total cost in this article refers to the operation cost of power grid enterprises in China,including transmission and distribution costs,cost of sales,and other costs,such as the cost of different specific meaning;Secondly,in terms of efficiency measurement,the Norwegian regulatory agency adopts the super efficiency model.The efficiency measurement model adopted in this paper can only be less than or equal to 1.Although both mechanisms can motivate enterprises to reduce costs,the method in this paper has poor identification ability for enterprises in the same frontier.Finally,the cost standard setting steps in Norway are simplified.The cost standard setting steps in Norway include calculating efficiency scores,adjusting environmental heterogeneity,and using WACC to calibrate the cost standard,while the third step is omitted in this paper in consideration of data availability.This paper firstly introduces the development of yardstick regulation theory and the research status of domestic scholars on yardstick regulation.Then it introduces four regulatory stages of Norway's power transmission and distribution industry.and analyzes how Norway's power industry USES R language to calculate efficiency,cost standard and revenue ceiling.Secondly,based on 288 panel data of 24 provincial power grid enterprises in China from 2005 to 2016,the cost efficiency of power transmission and distribution links in China was calculated based on the specific situation of China.Finally,the calculated cost efficiency is used to further calculate the effective cost of provincial grid enterprises,and the allowable revenue under different incentive intensity(p=0.5.p=0.6)is obtained according to the formula of allowable income ceiling in Norway.The empirical results show that under the ideal state,the maximum cost savings of China's power grid enterprises in 2016 is about RMB 857.458 billion,which is 37.66%lower than the actual cost.If the scale competition regulation similar to Norway is implemented,the actual cost of China's power grid enterprises will decrease by 18.83%(p=0.5)and 22.60%(p=0.6),saving 428.728 billion yuan and 514.475 billion yuan.According to the empirical results,China's power grid enterprises still have considerable inefficiency.Therefore,in order to improve the cost efficiency of enterprises and better provide services for users,power grid enterprises need to assume more responsibilities,and regulatory agencies should also formulate more reasonable and effective regulatory measures.Based on the empirical research in this paper,we put forward three Suggestions:first,formulate reasonable cost accounting rules,and establish and improve the cost supervision constraint mechanism.Power cost is an important data whether it is cost-plus regulation or scale competition regulation.However,due to the information asymmetry,the difficulty of cost allocation in the integrated transmission and distribution system and the lack of historical cost data,power grid enterprises have more obvious information advantages,which makes it difficult for regulatory agencies to obtain real cost data.Therefore,it is necessary to establish reasonable and effective cost accounting rules,clarify the permitted cost classification items and control standards,verify which belong to effective costs,and give a certain penalty to the invalid costs.Second,the establishment and improvement of power industry regulatory agencies.As the executor and supervisor of regulation policies?regulatory agencies of the power industry play a crucial role in the overall development of the power industry,so it is necessary to ensure the efficiency of regulatory agencies.On the one hand,the independence of regulatory agencies should be ensured,the functions of regulatory agencies should be clarified and strengthened by law.and the functions of relevant regulations should be considered to be combined with specific regulation.On the other hand,we should improve the price hearing system to form a rational decision-making platform.Fully listen to public opinion,Iet relevant stakeholders express their views,and form a harmonious and efficient market order.Third.to determine a reasonable price regulation model and gradually promote.The power price regulation system of developed countries can provide some practical experience for the pricing mechanism of power transmission and distribution in China's power industry.However,we need to consider the development status of China's power industry,so we cannot copy the regulation system of developed countries.Therefore,we suggest that China should actively carry out the research on the optimization of incentive regulation,make preparations and establish a scientific and effective price regulation system as soon as possible.