In order to effectively supervise the transmission and distribution costs of power grid companies

the current distribution electricity price system is classified and boiled down by hypotheses with reference to distribution reform schemes for Yunnan Province

and the condition-restricted incentive mechanism proposed by Jean Ladder Noel. Then the different roles in the transmission and distribution cost regulation are all covered by setting the specific hypotheses. On the basis of the distinct and definite hypotheses

a set of mechanism by adopting the third-party enterprise as the regulation executor is put forward to effectively solve the possible information asymmetry problems during the process of transmission and distribution cost accounting and declaration. Through this mechanism

the government role in the regulation and the mode to regulate the power grid companies can be changed

thus ultimately achieving the purpose to constrain and encourage power grid companies.