It’s of great significance to set a reasonable price cap in electricity market.

The paper introduces the developing history of telecom charge controlling system in America and Britain;it explains their current charge controlling systems---price upper limit,and finds out the disadvantages in our current charge controlling system in order to have improvements.

The authors firstly reiterate the thesis that the existing price regulation incentive system(price caps) which simply takes the cost cutting as the motivation may lead to investment distortion;then the important component of incentive regulation model for service quality of power transmissi.

Setting reasonable price cap in electricity market;

To carry out the transition uf regulation method from traditional mode to incentive regulation mode,the setup of initial price in price cap regulation model is amended based.

On the basis of analyzing the price cap regulation method and considering the situation of power reform in our country,a comprehensive model of price regulation for electricity transmission and distribut.

Through expounding the theories of price ceiling and yardstick competition of incentive regulation,this paper analyzes on the practice of the regulation for the electric power industries in the west developed countries,and probes into the enlightenment of incentive design to Chinese electric power industry.

The past papers assuming consumer income to be evenly distributed use duopoly model for analyzing the impact on the social welfare caused by price ceiling.

The problem of setting an adequate price cap for generation companies is investigated, from the standpoint of the regulatory organization, and a heuristic method proposed following the ex post a.