Price regulation mode selection of electric power industry in China

Abstract

After a series of price reforms, the cost-plus based regulation mode has been established in China's electric power industry. However, it still cannot fulfill the requirement of power reform and development. This paper proposes three reform modes of power price regulation which are the rate-of-return regulation, the price cap regulation and the floating rate-of-return regulation. Their feasibility, limitations, together with strengths and weaknesses are then well analyzed. Further, a gradual mode selection idea is put forward. © Springer-Verlag Berlin Heidelberg 2013.