This paper analyzes interior transaction cost before the reform of separation of network operations and generation, and making electric generation market competitive in power industry, and market transaction cost in complete power market with the theory of transaction cost in china on the basis of the actuality and characteristic of Chinese power industry,then the describtion and the scalar comparisim are done between two costs by curve and mathematics. Based on the economic theory,the authors analyze the compare result,and come out the economic term of separation of network operations and generation in power industry, that is to say that there isn't economic reason when the electric plant lies in the phase of scale reward increasing by degrees,on contrast,when the electric plant lies in the phase of scale reward decreasing by degrees,the reform should be done step by step.