This paper analyses issues in regional environmental benefits distribution from. the West-East Power Transmission in the view of the environmental economics. A case study d the economic assessment d the externalities effects of Yunnan , Guizhou and Guangdong provinces , which are included in the south passage of the project, is conducted. The study illustrates that, as a large strategy project, the West-East Power Transmission has promoted the coordination in energy and in economy between the backward western provinces and their more energetic eastern counterparts, However, it caused distortions in the regional environment benefits distribution became d the Unreasonable environmental rent-shifting from the west to the east with the power transmission, if only the central govemment takes measures to solve it, Suggestions are put forward that forming a new power price mechanism that can internalize the environmental cost of the west power by defining the ownership of the errvironmental Property clearly in law or establishing an ecological compensation mechanism to rationalize the unbalanced regional environmental benefits.