Research Of Government Regulation On Market Oriented Reform Of Power Industry

Smooth operation of the power industry is the basic security to the healthy development of national economy, so every country attaches much importance to the healthy development of power industry. As the traditional business model cannot reduce the monopoly power prices, enhance production efficiency, and provide a low-cost platform to the development of national economy, it seriously hampers a country's overall international competitiveness. Technological advances in the power industry and the continuous development of economic theory outlined a new path for the power sector reforms. Since the 80s of last century, with the direction of market reform, countries in the world performed deregulation and introduction of competition in the power sector reform, and achieved good results. Along the path of separate government functions from enterprise management,deregulation and introduction of competition, China began the implementation of market power industry reform. Through reformation, China introduced competition mechanism, realized separation of generation from power grid basically, and solved the problem of electricity shortage for many years. In the meantime, we set up a Electricity Regulatory Commission, which is a very important historic step in the natural monopoly field of professional regulation. Although we achieved gratifying achievements, many acute problems emerged in the reform process. The low efficiency of the industry brings a lot of social welfare loss. At the current stage of power sector reforms, there is not only problems of a shortage of funds and the development of balanced supply and demand issues, but also the problem of how to improve efficiency.China's electric power industry is currently experiencing an unprecedented reform bottlenecks that increasingly have regressive trend of the reform. First, our country does not form a sound relevant legal system, which brought not only the embarrassment of no legal basis, more important that it leads to an unclear direction and way of the reform. Second, due to the dominance of state-owned monopoly in the property rights ownership structure resulted in that the power enterprises can not really become a qualified market players. Third, the defects in the regulation system confine the functions of the specific agencies which can not play its due role. Finally, the price formation mechanism and the tariff structure are not scientific, which can not play a role in optimizing resource allocation.Therefore, it is necessary to learn the advanced experience of foreign countries to deepen the reformation of the power system, and combine it with the specific situation of China's reform and reshape a reasonable reform way. With the guidance of a sound framework, break the monopoly, and form a competition-based market along with effective government regulation of power sector. First, the priority is to accelerate the improvement of the new Electricity Law of the sound system, so that the reform process has rules to follow. Second, to achieve the goal of enhancing efficiency of state-owned property we have to break the monopoly of the industry to eliminate barriers to entry, so that the power companies can truly become qualified market players. Third, accelerate the establishment of reasonable regulation system and the corresponding accountability, change the way the original executive order, form a fair, transparent, professional and modern way of regulation.