Study Of Determination Allowed Rate Of Return For Chinese Power Enterprise Under Price Regulation

Price as an economic signal of power market, is a bridge link, the power between the supply and demand of electricity transaction, it is also a key and core of the electric power system reform. The process of power tariff reform is the main market of the redistribution of interests, it is crucial to improve the production efficiency and the allocation of power resources. So far from the new power reform scheme been put forward in 2002, the China's power generation side market has not realized the price bidding on real significance. The feed-in tariff, namely the benchmark price, keeps the same price which is not carried out the price bidding. That is to say, the present benchmark price is approved by the cost-plus pricing method in which it depends on the average cost of power generation enterprise and a lower IRR. Therefore, this paper has made a detailed study for the power generation enterprises about how to confirm the rate of return, how to determine it more reasonably and how to choose scientifically when we determine the rate.Firstly, Through analyzing the status quo of China's electricity prices in this paper, we can learn that the price of electricity through a national uniform pricing, debt service pricing, business pricing, benchmark pricing; and then implement our current bidding not in place, the price difference is big and so the status quo constitutes a new idea quoted permitted rate of return regulation model on the approved electricity prices. Secondly, this paper to determine the meaning and interpretation of the permitted rate of return method, the final cost of capital through the contrast method selected for specific accounting methods, followed by a variety of factors that affect the rate of return approved were analyzed under different conditions to determine how the yields were a more detailed study. Finally, this paper selected 11 listed companies on the Shanghai market power groups associated with each asset-liability ratio, daily stock prices and other data for the samples were calculated using the capital asset pricing model to estimate its cost of equity capital, and then on the basis of the weighted average capital cost method permitted rate of return of China's power generation business. Allow a reasonable rate of return is determined not only make the government effective control of power plants, but also encourage China's power generation companies to reduce costs, optimize the allocation of resources, is conducive to the healthy development of the national economy.