The reform of transmission and distribution price is an important part of the new round of power system reform. Under the supervision of transmission and distribution price, the optimization of investment scale of power supply companies will be the focus of their future work. Based on transmission and distribution price policy, this paper firstly established the quantification model of assets, costs, allowable income and taxes in the calculation of transmission and distribution price. Secondly, a two-way impact model of transmission and distribution price and grid investment contains two sub models was constructed based on the system dynamics theory, which are the transmission and distribution price to grid investment optimization model and the grid investment to transmission and distribution price simulation model. Finally, a power supply company was taken for example, the allowable investment scale under the constraints of constant transmission and distribution price and the transmission and distribution price variations under planned investment scale are calculated, and the investment optimization strategy was put forward, the results verify the feasibility of the model.