Since UK started privatization and liberalization of its power industry, Taiwan has also held the policy of power market deregulation in the reform agenda. How to develop a suitable pricing approach for the deregulated electricity market in Taiwan to cut out the price signal distortion and to increase the efficiency is imperative issues. According to the successful experiences by the advanced countries in the deregulation of electricity market, most of them adopted either nodal pricing or locational marginal pricing approach. This paper is intended to study the nodal pricing and locational marginal pricing and their impacts for deregulated electricity market in Taiwan. It is our hope that the paper with its findings can contribute to the successful reform of deregulating the electricity supply industry in Taiwan.