Abstract: On March 15, 2015, the Chinese government began a new round of reform of the power system, which focused on the orderly liberalization of competitive links outside the distribution, with the aim of reducing market electricity prices by “breaking the monopoly and introducing competition”. After the release of the power selling side, the proportion of China’s electricity market transactions has been increasing year by year. As of June 2019, market-oriented trading electricity accounted for 32.4% of the total electricity consumption of the whole society and 58.3% of the electricity consumption of the operating industry, releasing more than 210 billion yuan of reform dividends accumulatively. The reform of electricity marketization has greatly reduced the energy use costs of some enterprises and made a significant contribution to the strategic goal of China's steady macro-economic growth. However, behind the sharp fall in the market electricity prices, it was accompanied by widespread losses of power generation enterprises. In 2018, the total profit of power grid enterprises decreased by 24.3% compared with the previous year, while the losses of thermal power generation enterprises were as high as 43.8%. Why do power companies sacrifice their profits to reduce market electricity prices? Is it driven by the effective introduction of market competition, or is it due to other reasons? And how to prevent the financial risks caused by improper positioning? These questions are related to the promotion of China's power market deepening reform strategy, which needs to be studied and answered urgently.

Key words: market competition reform; power generation group; manager behavior; multi-objective principal-agent