Risk Evaluation of Electric Power Grid Enterprise Related to Electricity Transmission and Distribution Tariff Regulation Employing a Hybrid MCDM Model

Abstract

In China, a new-round marketization reform of electricity industry is in progress, and the electricity transmission and distribution tariff reform is the core and important task. Currently, the electricity transmission and distribution tariff regulation has gone to the second round in China, and the electric power grid enterprises are facing a closed-loop regulatory system and an increasingly strict regulatory environment. Therefore, it is urgent to evaluate the risk of electric power grid enterprise that is related to electricity transmission and distribution tariff regulation, which can aid the electricity regulators and electric power grid enterprise operators to manage risk and promote the sustainable development of electric power industry. In this paper, a hybrid novel multi-criteria decision making (MCDM) method combining the fuzzy Best-Worst method (FBWM) and improved fuzzy comprehensive evaluation method based on a vague set is proposed for the risk evaluation of electric power grid enterprise related to electricity transmission and distribution tariff regulation. The risk evaluation index system is built. Subsequently, the FBWM is utilized to determine the optimal weights of electric power grid enterprise risk criteria, and the improved fuzzy comprehensive evaluation method that is based on vague set is employed to rank the comprehensive risk grade of electric power grid enterprise related to electricity transmission and distribution tariff regulation. The risk of a province-level electric power grid enterprise that is located in Northern China is empirically evaluated using the proposed MCDM method, and the result indicates that the overall risk of this province-level electric power grid enterprise belongs to ‘High’ grade, but it is very close to ‘Very High’ grade. The results indicate that the proposed hybrid novel MCDM method in this paper is effective and practical. Meanwhile, it provides a new view for the risk evaluation of electric power grid enterprise that is related to electricity transmission and distribution tariff regulation.