The selling cost as well as purchasing utility of peak regulation market is analyzed.The relationship between peak regulation utility and generation cost and benchmark price is built.Based on the utility analysis for peak regulation market，a novel mathematical model of the peak regulation market is presented according to the social welfare maximization principle.It is proved by the model that effective peak regulation transaction can be obtained based on the unit marginal generation cost.In addition，it is revealed that the peak regulation transaction also has the functions of reducing the generation cost and emission.Calculation for actual units shows the validity of the theoretical analysis.