From the application of transmission losses factor in the settlement of power plants， the disadvantages in the settlement of East China power market are discussed. According to the dissimilarity of each unit’s power supply district，the concepts of local power supply volume and outward electric power volume are introduced. The improved scheme is proposed， in which the local power supply volume is settled by the whole network clearing price while the outward electric power volume is settled by multiplying the whole network clearing price and each unit’s transmission losses factor. The scheme can reflect the actual operation situation， thus provides right economic signal for the market. The comparison of the improved and original settlement method shows that the improved one is effective and relatively reasonable.