| Under the basic background that China’s economic development has entered a new normal state,the CPC Central Committee and the State Council issued "Opinions on Further Deepening the Reform of The Electric Power System"(No.9,2015)in March 2015.This opens a new era of electric power system reform.The external environment of power enterprises including power generation enterprises and power grid enterprises)has undergone fundamental changes,and the existing profit model and business model have encountered major challenges.The new round of power system reform is a reflection of market-oriented reform in the power industry.The core of the reform is to restore the commodity nature of electricity product which aims to enhance the opening and competition level of the power industry.The reform starts with the the price formation mechanism of electricity products.It is a typical institutional change led by the government.This institutional change and innovation is characterized by the introduction of market mechanism.The generation side and the sale side are liberalized.The generation enterprises can participate in the sale of electricity market and trade directly with the power users.Thus the market structure of "opening up the two ends and controlling the middle" is constructed.Reforming the formation mechanism of electricity price is the premise and guarantee of the new round of electric power system reform.The transmission and distribution price is determined by the government and the selling price is formed by the market.The transmission and distribution price of power grid enterprises will be determined according to the principle of "allowable cost plus reasonable income",and strict cost supervision and elimination of costs unrelated to transmission and distribution will completely change the existing profit model of power grid enterprises,no longer relying on purchase and sale price difference.From the practice point of view,the transmission and distribution prices in the pilot areas have dropped considerably,which directly leads to a significant reduction in the income of power grid enterprises.According to estimates,Shenzhen Power Supply Bureau in 2015-2017 revenue decreased by more than 3 billion yuan.From the point of view of the formation of electricity price,the diversification of the main power sellers will help to build an active electricity market,and encourage the power generation enterprises and the main power sellers or power users to trade directly.The electricity price must be determined by the market.For the power grid enterprises,its profit model has undergone a fundamental change.In the permissable costs plus a reasonable return method of determination of price of electricity transmission and distribution,strict permissable costs supervision and examination is needed.permissable costs permissable costs supervision and examination need to eliminate unreasonable factors,and also aims to optimize the cost structure of power grid enterprises,so as to establish the cost constraint mechanism of power grid enterprises.Electricity transmission and distribution price determined by the government has shown a clear downward trend since the commecemnt of reform,in order to maintain and enhance the level of profit,power grid enterprises have to regard cost management from a strategic level,alleviating the pressure on profitability,to achieve sustainable development.Besides,for the power generation enterprises,the reform of the sale side has brought new market opportunities and profit growth innovation.At the same time,the homogeneity of the terminal products in electricity power industry makes the cost leadership strategy become an inevitable choice for power generation enterprises,and low-cost power generation companies will gain more market opportunities,thereby creating significant profits.At the same time,an unavoidable reality is that China has stepped into the new normal stage which shows overcapacity of electircity.In 2014,national scale power plant generating equipment utilization hours is the lowest level since 1978.In the current characteristics of the relationship between supply and demand,according to the experience of the pilot areas,the electricity price in Yunnan province market fell 20.4%,the Shenzhen city power grid transmission and distribution price dropped by about 16%.Therefore,the cost advantages of power companies can better grasp the opportunity to become the new round of institutional change and becomes the largest beneficiary groups.The traditional cost management focuses on cost accountin,however,cost accounting can not match the new develpment of business model.With the turbulence of the external environment of enterprises and the reallocation of internal factors of production,the concept and connotation of cost management are constantly evolving and changing.This evolution and change is first reflected in the context of market-oriented reform,the pricing capacity of enterprises is becoming smaller and smaller,and customers occupy a dominant position in corporate profits.Cost management should first uphold the basic concept of customer-oriented,such as the use of activity-based cost management.Activity-based cost management aims to eliminate unnecessary or invalid non-value-added activities,through the management of cost drivers to achieve the goal of cost management.The object of cost management is no longer the cost soly,but alos the process of cost formation.Additionally,the continuous innovation of organizational structure makes the boundaries between enterprises increasingly blurred,and the boundless enterprises appear constantly.The value chain breaks through the boundary of the enterprise and extends to the operation chain between the enterprise and the upstream and downstream.Based on the maximization of the overall interests,the cooperation between enterprises is becoming polular and important.Due to the long existence of "planned electricity" and the long-term influence of power monopoly,the reaction on cost management idea and method of electric power enterprises is lagging behind.And the reform that the electric power enterprise experiencing provides the basic motivation of cost management system.Electric power genaration enterprises should grab the market by reducing the cost and also the selling price;power grid enterprises shuold also reduce the cost to expand the profit space.In order to push electric power enterprises into the market,we should start with the innovation and application of cost management in electric power enterprises.Only by constructing cost advantages and technological innovation will creat the core competitiveness of the electric power enterprises.And a long-term mechanism to deal with the changes of the system,to participate in market competition and seek the development of enterprises will be formed.This paper aims to construct the cost management system of power grid enterprises and power generation enterprises from the perspective of the theoretical framework.Meanwhile,this paper also attempts to use field research and case study to apply the new and reconstructed cost management system.The research process of this paper is as follows:This paper takes the event of power system reform as the starting point.Firstly,the basic concepts are defined,and the research methods and ideas are expounded.Secondly,this paper reviews the relevant literature on the reform of China’s electric power system and the innovation and evolution of cost management ideas.Thirdly,this paper elaborates the basic institutional background of this article,mainly on the motivation,process and economic consequences of the reform of China’s electric power system,especially on the new round of electric power system reform in 2015,which is marked by "Opinions on Further Deepening the Reform of The Electric Power System"(No.9,2015).Fourthly,this paper constructs a research framework of the impact of institutional change on cost management of power enterprises through theoretical elaboration and empirical data analysis to evaluates the effectiveness of relevant policies of power system reform in improving cost efficiency of power enterprises,and also explores the necessity of restructuring cost management system of power enterprises.Fifthly,combined with practical cases,the cost management of power enterprises is discussed from the point of activity value creation and coal and electricity value chain.A transmission and distribution pricing model including exogenous variables such as market factors which is based on activity-based costing is built.Finally,the basic conclusions of the paper are obtained,and also the possible research trends and directions in the future are given.Based on this study,the following basic conclusions are drawn:Firstly,the new round of electric power system reform started in 2015 is a great change in the external environment of electric power enterprises.It is a subversive change in the past "planned operation" electric power system in China,and a great change has been taken place in the production and operation modes of power generation enterprises and power grid enterprises.Cost management has become the core element for power enterprises to deal with institutional changes.Secondly,the mandatory institutional change does not effectively enhance the cost efficiency of electric power enterprises.Simply changing the regulatory system of the power industry can not improve the cost efficiency,and a legal and enforcement mechanism is an inevitable choice.Thirdly,power grid enterprises should pay attention to the pricing cost management of transmission and distribution price.The basic logic of value chain analysis and activity-based costing is used to optimize the cost.At the same time,the pricing mechanism of transmission and distribution price should not only exert the constraints effect on cost,but also reflect the effective positive incentives.Cost management of coal-fired power generation enterprises should break through the entity boundaries to find the optimal integration level and build cost advantages. |
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