Improving Regulation Model of Electricity Transmission and Distribution Price

With its own technology and economy feature of power transmission &distribution, after implementing market reformation it still has obvious natural monopoly feature, so the government needs carry scientific reasonable and effective regulation to power transmission and distribution. In this paper, we firstly analyze the model of price cap which is one kind of incentive regulation model. To carry out the transition of regulation method from traditional mode to incentive regulation mode, the setup of initial price in price cap regulation model is amended based on the analysis of price cap regulation model. Aiming at the status of power network in China, the regulation mode which takes network expansion and service quality into account is brought forward and an example is used to demonstrate the theory of weight factor setup.