『Abstract
　Electricity is the guarantee of normal life, and the electricity price is widely concerned. As a developing country in the transition stage, abundant policy implications are included in the electricity price in China, thus, whether to adjust the resident electricity price is a dilemma for the government. However, the current single tariff system cannot cope with the complex social and environmental problems. A new price mechanism is indeed needed. This paper tries to design an increasing block tariffs system with the consideration of residential income and electricity consumption. The result indicates that the increasing block tariffs system with four-tier structure is more reasonable for China. Although the increasing block tariffs will result in the increase of electricity price, it is still acceptable and affordable. The increasing block tariffs will greatly improve the equity and efficiency, and promote the electricity saving and emissions reduction. Moreover, the power companies will increase tariffs revenue, which would use to the transmission networks investment in poor area. In order to the offset the limitations of the increasing block tariffs, the government should adopt some complementary measures.

Keywords: Increasing block tariffs; Mechanism design; Equity and Efficiency』

1. Introduction
2. Literature review
3. Current situations of IBTs
4. The design of IBTs for residential electricity use in China
　4.1. Numbers of blocks
　4.2. Setting the volume of electricity consumption in each block
　　4.2.1. Grouping of households
　　4.2.2. Electricity consumption of different income groups
　　4.2.3. Electricity price of each block
5. The impacts of the increasing block tariffs
　5.1. Impacts on household welfare
　5.2. Impacts on equity and efficiency
　5.3. Impacts on the consumption and income of power companies
　5.4. Impacts on emissions
6. Conclusions and suggestions
　6.1. Conclusions
　6.2. Suggestions
Acknowledgements
References