2013 International Conference on Power, Energy and Control (ICPEC)
A Comparative study on
Transmission Network Cost Allocation
Methodologies
S.Prabhakar Karthikeyan1, B.Saravanan1, Aman Jain1, Indrajit Ranu1, I.Jacob Raglend2,
D.P.Kothari3
1
School of Electrical Engineering, VIT University, Vellore, Tamil Nadu, INDIA.
2
Professor, NI University, Thakkalai, Nagercoil, Tamil Nadu, INDIA.
3
Fellow IEEE, FNAE, FNASc, FIE (India), Director General, Raisoni Group of Institutions, Nagpur,
Maharashtra, INDIA
Abstract— In the deregulated electricity market, it has become
very important to determine the complete information about
the participants who are utilizing the transmission network.
Transmission line usage computation requires information of
generator to load contributions and the path used by various
generators to meet loads and losses. In the present restructured
electricity market, it is necessary to develop appropriate
pricing techniques that can provide the useful economic
information to market participants. In this paper, the three
existing techniques namely Zbus method, Zbusavg method and
Relative Electrical Distance (RED) method for the network
cost allocation is compared. It has been successfully applied on
an IEEE 24 bus-Reliability Test System (RTS) and the results
obtained are compared. The results obtained are quite
encouraging and useful for the deregulated electricity market
related issues. The simulation is carried out using MATLAB
7.8.0 (R 2009a).
Keywords-Transmission network cost allocation, active power
flow, generator cost contribution, load cost contribution, Zbus,
Zbusavg and RED.
I. INTRODUCTION
In the early nineties, electrical utilities and other power
network companies around the world have been forced to
change their ways from vertically integrated mechanism to
open market system. This kind of process is called as
deregulation or restructuring or unbundling.
Deregulation word refers to un-bundling of electrical
utility or restructuring of electrical utility and allowing
private companies to participate. The aim of deregulation is
to introduce an element of competition into electrical energy
delivery and thereby allow market forces to price energy at
low rates for the customer and higher efficiency for the
suppliers. The necessity for deregulation is to provide
cheaper electricity, to offer greater choice to the customer in
purchasing the economic energy, to give more choice of
generation and to offer better services with respect to power
978-1-4673-6030-2/13/$31.00 ©2013 IEEE
quality i.e. constant voltage, constant frequency and
uninterrupted power supply.
Though the aim of deregulation is to bring
competitiveness both in the generation and demand side,
owing to the technical and physical difficulty, the
transmission network remains under a common entity. This
has paved way for lot of challenging issues in the
deregulated electricity market. One among them is the usage
cost allocation of transmission network both by the
generation and the distribution companies.
In the traditional pro rata method [3], [4] both
generators and loads are charged a flat rate per megawatt-
hour, disregarding their respective use of individual
transmission lines. Flow-based method [5] estimates the
usage of the lines by generators and demands and charges
them accordingly. Some flow-based methods use the
proportional sharing principle [6], [7], which implies that
any active power flow leaving a bus is proportionally made
up of the flows entering that bus, such that Kirchhoff’s
Current Law is satisfied. Other methods that use generation
shift distribution factors [8] are dependent on the selection
of the slack bus and lead to controversial results. The usage-
based method reported in [9] and [10] uses the so-called
equivalent bilateral exchanges (EBEs). To build the EBEs,
each demand is proportionally assigned a fraction of each
generation, and conversely, each generation is
proportionally assigned a fraction of each demand, in such a
way as both Kirchhoff’s Laws are satisfied[12][13].
The techniques compared in this paper are related to the
allocation of the cost of transmission losses based on Zbus
matrix approach and Zbusavg as reported and explained in [1]
[11] [14] and Relative Electrical Distance approach as
explained in [2]. This is an approach for alleviation of
network overloads in the day-to-day operation of power
systems under deregulated environment. In [2], RED
methodology is used for overload alleviation by real power
generation rescheduling. This method estimates the relative
location of load nodes with respect to generation nodes. The
contribution of each generator for a particular over loaded
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line is first identified, then based on RED, the desired i

Observe that the magnitude of parameter a jk provides a
proportions of generations for the desired overload relieving
is obtained, so that the system will have minimum measure of the electrical distance between the bus i and line
transmission losses and more stability margins with respect jk.
to voltage profiles, bus angles and better transmission tariff. Substituting (6) in (1)
The authors though compared the above three methods in n n

[16] using a simple system, it is always believed that testing S jk = V j ∑ (a ijk I i )* = ∑ V j (a ijk* I i* ) (8)
i =1 i =1
it on an IEEE system will help the researchers to arrive at
any sort of constructive conclusion. Then active power through the line jk is
n
II. PROBLEM STATEMENT Pjk = Re al{∑ V j a ijk* I i*} (9)
i =1
A. Background of Zbus & Zbusavg
Technique Or, equivalently
Consider the complex power flow Sjk computed at bus j n
Pjk = ∑ Re al{V j a ijk* I i*} (10)
and flowing through the line connecting bus j to bus k as i =1
shown in Figure 1.As the power flow solution is known, we Thus, the active power flow through any line can be split
select the direction of the complex power flow so that Pjk > and associated the nodal currents in a direct way.
0. P i jk = Re al{V j a ijk* I i*} (11)

B. Transmission Cost Allocation using Zbus

The usage of line jk due to nodal current i as the absolute
value of the active power flow component Pijk, is given by
U ijk = Pjki (12)
That is, considering both flows and counter-flows do use the
line.
The total usage of line jk is then
Figure 1. Π equivalent circuit of line section jk n
The complex power flow S jk is U jk = ∑U ijk (13)
i =1
S jk = V j I * jk (1) To allocate the use of transmission line jk to any
generator and demand, without loss of generality, a single
Using the Zbus matrix, the voltage at node j is given by generator and a single demand at each node of the network
n is considered.
V j = ∑ Z ji I i (2)
Then, the usage of line jk apportioned to the generator
i =1
The current through the line jk , I jk is obtained as or demand located at bus i is stated below.
If bus i contains only generation, the usage allocated to
sh
I jk = (V j − Vk )Y jk + V jY jk (3) generation i pertaining to line jk is
Substituting (2) in (3) U Gi i
jk = U jk
(14)
n n n On the other hand, if bus i contains only demand, the usage
I jk = (∑ z ji I i − ∑ z ki I i )Y jk + ∑ z ji I iY sh jk allocated to demand i pertaining to line jk is
i =1 i =1 i =1
(4) U Di i
jk = U jk
(15)
Rearranging (4)
For the sake of simplicity and for each line, total annualized
n sh line cost in $/h, Cjk , which includes operation , maintenance
I jk = ∑ [( z ji − z ki )Y jk + z jiY jk ]I i (5)
i =1 and building costs is considered. The corresponding cost
Note that the first term of the product in (5) is constant, as it rate for line jk is then
depends only on network parameters. Thus, (5) can be rjk = C jk / U jk (16)
written as
In this way, the cost of line jk allocated to the generator
n i located at bus i is
I jk = ∑ a jk I i (6)
i =1 C Gi Gi
jk = rjkU jk
(17)
i sh
Where a jk = ( z ji − z ki )Y jk + z jiY jk (7) Similarly, cost of line jk allocated to the demand located at
bus i is

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C Di Di
jk = r jkU jk
(18) [VL ] = [VG+1 ,VG+2 ..........VN ]T is the complex Load bus
Finally, the total transmission cost of the network allocated Voltages; and
to the generator located at bus i is [ ] [ ] [YLG ] and [YLL ]
YGG , YGL , are corresponding portions
C Gi = Gi
∑ rjkU jk (19) of network Ybus matrix.
( j , k )∈Ω L
Equation (21) can be written as
In addition, similarly the total transmission cost of the
network allocated to the demand located at bus i is [I G ] = [YGG ][VG ] + [YGL ][VL ] (22)

C Di = Di
∑ rjkU jk (20) [I L ] = [YLG ][VG ] + [YLL ][VL ] (23)
( j , k )∈Ω L
Pre-multiplying (23) by [YLL ]
−1
Equation (8) is written in such a manner that Pjk ≥0,
that is, in the direction of the active power flows. However, [YLL]−1[IL] = [YLL]−1[YLG][VG] +[VL] (24)
(8) can also be written in the direction of the active power
i
Rearranging (24), we obtain
counter-flows, which leads to distance parameters akj . It is
[VL ] = [YLL ]−1[I L ] − [YLL ]−1[YLG ][VG ] (25)
correct to write Equation (8) in both the ways. However, (7)
shows that distance parameters are not generally Substituting [VL ] of (22) into (24), we obtain
symmetrical with respect to line indexes, i.e., a jk
i
≠ a kji , [I G ] = [YGG ][VG ] + [YGL ]{[YLL ]−1[I L ] − [YLL ]−1[YLG ][VG ]}
which results in different usage allocations depending on (26)
whether (8) is written in the direction of the active power Equations (25) and (26) can be rewritten as
flows or counter-flows.
⎡VL ⎤ ⎡ Z LL FLG ⎤ ⎡ I L ⎤
Now, to address these two types of power flows, two
⎢I ⎥ = ⎢ ' ⎥⎢ ⎥ (27)
Zbus based techniques are used. The first one is denoted by ⎣ G ⎦ ⎣ K GLY GG ⎦ ⎣VG ⎦
Zbus and is based on (8) written in the direction of the active
power flows. This is a common way as the actual active [FLG ] = −[YLL ]−1 [YLG ]
power flows directions are used. This selection generally
Where [K GL ] = [YGL ][YLL ]
−1
results in higher usage allocation to generators versus
demands. The second technique denoted by Zbusavg, provides
the average value of allocated cost (usage) using the Zbus
[YGG' ] = {[YGG ] − [YGL ][YLL ]−1 [YLG ]}
technique with (8) written in the direction of the active The elements of [FLG ] matrix are complex. Its columns
power counter-flows. This technique smoothens the trend of correspond to the generator bus numbers and rows
allocating higher network usage to generators versus correspond to the load bus numbers. This matrix gives the
demands. relation between load bus and source bus voltages. Ideal
C. Background of RED Technique [
generation proportions are obtained from abs FLG matrix, ]
Consider a system where n is the total number of buses
with 1, 2. . . g, where g is the number of generator buses and
also known as desired generation proportions matrix [DLG ]
g + 1, . . . , n, remaining (n - g) are the load buses. For a as
given system, the network admittance matrix is given by [DLG ] = abs{[FLG ]} (28)
⎡ I G ⎤ ⎡YGGYGL ⎤ ⎡VG ⎤ [DLG ] gives the information about the location of load
⎢ I ⎥ = ⎢Y Y ⎥ ⎢V ⎥ (21) nodes with respect to generator nodes, which is popularly
⎣ L ⎦ ⎣ LG LL ⎦ ⎣ L ⎦
[ ]
termed as RED. The RED is obtained from the
[DLG ] matrix as
Where, [I G ] = [I1 , I 2 ..........I g ]T is the injected current of
Generator buses;
[RED] = M − [DLG ] (29)
Where, M is the unity matrix of size L X G, G is the number
[I L ] = [I G +1, I G + 2 ..........I N ]T is the injected current of of generator buses and L is the number of load buses.
Load buses;
D. Evaluation of Power contract transmission matrix and
[VG ] = [V1,V2 ..........Vg ]T is the complex Generator bus transmission cost matrix:
Voltages; The power contract transmission matrix [PLG ] is
calculated from the transaction details between the generator

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and the load from which [C LG ] , transmission cost matrix is

calculated using the following expression
[C LG ] = {x + [RED]} (30)
where the transmission charges are directly proportional to
the relative electrical distances and it is assumed that the
charges for the consumers are Rs x. The transmission
[
charges are calculated by each element of C LG matrix ]
multiplied by the corresponding element of [PLG ] matrix.

III. IMPLEMENTATION AND RESULTS

All the three methodologies are compared by testing it
on a standard IEEE 24 bus reliability test system shown in
Figure 2. MATLAB 7.8.0 (R 2009a) is used for coding. Figure 2. IEEE 24 bus RTS

A. Zbus Technique
TABLE I. GENERATOR COST CONTRIBUTIONS CG (k,i) IN Pjk>0 DIRECTION OF Zbus TECHNIQUE
LINE\GEN GEN1 GEN2 GEN7 GEN13 GEN15GEN16 GEN18 GEN21 GEN22 GEN23

1 0.74870.8363 0.1668 0.0328 0.2025 0.1133 0.1905 1.6169 0.9663 1.815

2 5.08545.6053 1.4917 0.4735 4.185 2.1864 3.8471 32.624919.202930.4166
3 6.78 7.3634 1.6495 0.1434 0.3169 0.0226 0.2194 1.392 0.2927 4.3349
4 3.78525.3342 2.685 0.4072 1.5066 0.8639 1.4996 11.9357 6.8788 18.0482
5 7.28769.8898 2.0525 0.4321 2.6979 1.4042 2.5466 20.802611.939822.9481
6 1.01550.8952 3.3997 0.1858 2.3564 1.0147 1.9529 17.538910.2822 2.7046
7 1.0514 1.327 0.913 0.0514 1.9537 1.1252 1.6831 16.430510.6746 9.6374
8 2.51753.5746 2.2181 0.3397 1.2862 0.7374 1.276 10.2029 5.8986 15.1844
9 5.70976.0786 1.8782 0.1989 0.0129 0.189 0.0921 1.1361 1.1429 7.0168
10 0.4164 0.446 1.4864 0.2361 0.9839 0.5737 0.9622 7.9148 4.6796 11.045
11 0 0 40.1096 0 0 0 0 0 0 0
12 0.48670.621320.2469 0.3032 1.5718 0.7979 1.5128 11.896 6.6119 14.5572
13 0.0262 .0593 25.195 0.1887 1.0895 0.4821 1.0456 7.7682 4.001 8.825
14 1.3784 1.834 3.6991 0.2802 0.5364 0.4817 0.6474 5.0429 3.1767 6.6427
15 1.53832.0519 4.0091 0.3785 0.0445 0.0593 0.0899 0.212 0.3339 17.396
16 0.12830.1445 0.1174 0.3523 1.5703 1.0828 1.5323 13.7365 8.8505 16.5803
17 0.12970.1423 0.069 0.3988 1.4092 0.9748 1.3702 12.3649 8 21.7699
18 0.24630.3189 0.5066 0.953 0.1948 0.1518 0.2011 1.7827 1.171 21.2532

TABLE I CONTD. GENERATOR COST CONTRIBUTIONS CG (k,i) IN Pjk>0 DIRECTION OF Zbus TECHNIQUE.

LINE\GEN GEN1 GEN2 GEN7 GEN13 GEN15 GEN16 GEN18 GEN21 GEN22 GEN23

19 0.1749 0.2355 0.4794 0.0531 0.9034 0.6679 0.8962 8.1401 5.3566 4.1353
20 0.2505 0.3317 0.6126 0.8201 0.8242 0.6018 0.8227 7.364 4.797 10.2632
21 0.3026 0.4254 0.7815 0.0175 1.4519 1.22 1.4167 14.0643 9.8966 34.406
22 0.1939 0.2755 0.555 0.3796 1.2563 1.0494 1.2242 12.1369 8.5256 34.1715
23 0.2018 0.2916 0.5663 0.0533 1.2825 1.1262 1.2408 12.7593 9.1876 6.8785

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24 0.0326 0.0352 0.0747 0.0306 0.8117 0.2554 0.2449 4.2469 2.0801 2.8473
25 0.2251 0.3086 0.2702 0.0141 0.6747 0.0553 1.6593 23.7125 14.4716 0.2534
26 0.2251 0.3086 0.2702 0.0141 0.6747 0.0553 1.6593 23.7125 14.4716 0.2534
27 0.5473 0.7078 0.3772 0.0475 1.2023 0.7856 1.0301 10.8055 7.4297 6.9974
28 0.1102 0.1564 0.2221 0.0313 0.1975 0.1721 1.0044 8.0954 7.5969 2.3767
29 0.0045 0.0013 0.0656 0.0356 0.45 0.38 0.4349 4.3855 3.1094 6.1403
30 0.0123 0.0201 0.0561 0.0119 0.2137 0.0923 0.9725 7.0825 1.3768 1.0804
31 0.2037 0.2879 0.2391 0.0117 0.5372 0.0393 0.212 15.2865 82.5741 0.3507
32 0.0678 0.0893 0.0358 0.0078 0.4805 0.1236 1.7238 14.4758 3.1589 1.1103
33 0.0678 0.0893 0.0358 0.0078 0.4805 0.1236 1.7238 14.4758 3.1589 1.1103
34 0.0841 0.1209 0.2685 0.0818 0.713 0.587 0.6951 6.8341 4.7698 11.5888
35 0.0841 0.1209 0.2685 0.0818 0.713 0.587 0.6951 6.8341 4.7698 11.5888
36 0.067 0.0945 0.1801 0.0477 0.3643 0.3053 0.3552 3.5245 2.4781 6.4798
37 0.067 0.0945 0.1801 0.0477 0.3643 0.3053 0.3552 3.5245 2.4781 6.4798
38 0.0985 0.1391 0.1156 0.0057 0.2596 0.019 0.1025 7.3881 57.1613 0.1695

B. Zbusavg Method
Using Equation No 18, the cost of each line allocated to the The cost of each line allocated to the load and the
load at various buses is computed. generator located at various buses are calculated as per the
discussion made earlier for Zbusavg method.
C. Comparison of Zbus based Techniques

TABLE II. COMPARISON OF BOTH Zbus AND Zbusavg TECHNIQUES

Zbus Technique Zbusavg Technique
avg
CG CD TOTAL COST CG CDavg TOTAL COSTavg
Bus No
in $ in $ in $ in $ in $ in $
1 41.3522 25.9653 67.3176 43.7322 27.4597 71.1919
2 50.6569 28.5682 79.2251 53.5085 30.1763 83.6848
3 0 184.485 184.485 0 188.735 188.735
4 0 84.0901 84.0901 0 88.7323 88.7323
5 0 68.6698 68.6698 0 72.2478 72.2478
6 0 59.9801 59.9801 0 77.2602 77.2602
7 117.549 61.2232 178.772 117.51 61.2032 178.713
8 0 175.917 175.917 0 180.024 180.024
9 0 145.662 145.662 0 151.042 151.042
10 0 72.2811 72.2811 0 78.8505 78.8505
11 0 0 0 0 0 0
12 0 0 0 0 0 0
13 7.15621 6.64702 13.8032 7.44293 6.91334 14.3563
14 0 116.219 116.219 0 117.195 117.195
15 35.7738 52.7455 88.5193 35.4253 52.2317 87.657
16 20.812 13.4271 34.2391 20.2819 13.0851 33.367
17 0 0 0 0 0 0
18 39.1378 32.5822 71.7199 38.8784 32.3663 71.2447
19 0 127.021 127.021 0 126.608 126.608
20 0 89.022 89.022 0 88.6508 88.6508

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21 383.247 0 383.247 364.838 0 364.838

22 352.952 0 352.952 320.599 0 320.599
23 378.857 0 378.857 377.002 0 377.002
24 0 0 0 0 0 0

The above table gives the information about the cost
allocated to different generators and loads for IEEE RTS 24
bus system for the Zbus based techniques. Though both the
methods yield the same total transmission cost i.e TOTAL
COST = $2771.99 ≈ INR133055.00, it is inferred that the
Zbus technique allocates more usage to generators rather than
demands and similarly allocates most of the cost to
avg
generators compared to demands. The Z bus technique
avoids the allocating most of the cost to generators than
demands.
D. RED method
Using Equation No 28, the desired load
sharing/generation scheduling for the standard IEEE 24 bus
RTS is calculated and is shown in Table III. All schedules
are shown in MW with an assumption of same load of 250
MW at each load bus.

TABLE III. SCHEDULE OF GENERATION

Power drawn from each Generator Total
Load Bus
Load
No G1 G2 G7 G13 G15 G16 G18 G21 G22 G23
(MW)
1 163.625 86.375 0 0 0 0 0 0 0 0 250
2 0 93.25 0 156.75 0 0 0 0 0 0 250
3 0 111.55 0 0 0 138.45 0 0 0 0 250
4 0 87.775 0 0 162.225 0 0 0 0 0 250
5 0 58.35 0 0 0 0 191.65 0 0 0 250
6 0 126.675 0 0 0 0 0 123.325 0 0 250
7 149.725 0 100.275 0 0 0 0 0 0 0 250
8 0 149.725 65.825 0 0 0 34.45 0 0 0 250
9 0 88.775 0 0 0 161.225 0 0 0 0 250
10 0 0 0 0 0 0 39.35 210.62 0 0 250
13 0 0 0 196.125 0 0 0 53.875 0 0 250
14 0 0 0 0 158.375 0 0 0 0 91.625 250
15 0 0 0 0 0 108.725 0 0 141.275 0 250
16 0 0 0 0 68.475 58.525 0 0 0 123 250
18 0 110.85 0 0 28.95 0 0 0 0 110.2 250
19 0 0 0 85.375 0 0 164.625 0 0 0 250
20 0 0 99.725 0 0 0 0 0 150.275 0 250
Total 313.35 913.325 265.825 438.25 418.025 466.925 430.075 387.82 291.55 324.825 4250
E. Evaluation of Transmission Charges
10% X 1381256.50 = INR 138125.65. The transmission
Total Generation of Generator 1 = 313.35MW
Total Generation of Generator 2 = 913.35MW [ ]
cost matrix C LG must be considered such that the
Total Generation of Generator 7 = 265.85MW Transmission Charges when evaluated come to
Total Generation of Generator 13 = 438.25MW approximately 10% of the Generation Charges. Here, in this
Total Generation of Generator 15 = 418.025MW case, the loss which has to be contributed by each generated
Total Generation of Generator 16 = 466.925MW is neglected. So the total amount of active power to be
Total Generation of Generator 18 = 430.075MW generated and transmitted by each generator to meet the
Total Generation of Generator 21 = 387.82MW
Total Generation of Generator 22 = 291.55MW
] [
load is given by PLG . Therefore the total transmission cost
Total Generation of Generator 23 = 324.825MW is given by [PLG ]X [C LG ] which is calculated as shown in
The assumed Generation cost = INR 325/MW Table IV. It is to note that the authors have calculated only
Therefore, the total Generation cost = INR 1381256.50 the transmission basic charges by RED method.
The Transmission charges are considered as 10% of the
Generation charges. Therefore, Transmission Charges =

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TABLE IV. EVALUATION OF TRANSMISSION BASIC CHARGES

363.06 467.77 461.44 469.66 479.83 456.22 401.99 448.25 469.32 499.99 499.99 499.99 499.99 499.99 461.69 499.99 499.99

467.78 366.93 458.39 467.25 478.23 452.75 500 444.14 466.88 500 377.02 500 500 500 458.65 446.47 500

461.45 458.39 373.55 460.83 473.96 443.47 500 433.18 371.10 500 500 500 439.78 467.58 450.53 500 500

469.67 467.25 460.83 363.91 479.51 455.52 500 447.42 468.83 500 500 397.23 500 455.56 442.29 500 500

279.84 278.23 273.96 279.51 252.78 270.43 300 252.41 279.28 285.57 300 300 300 300 474.12 239.64 300

456.25 452.70 443.47 455.52 470.43 374.97 500 424.12 455.02 396.10 473.42 500 500 500 443.83 500 500

402.00 500 500 500 500 500 370.10 473.59 500 500 500 500 500 500 500 500 460.18

448.38 444.19 433.23 447.47 452.46 424.17 473.64 388.27 446.87 494.62 500.05 500.05 500.05 500.05 433.65 477.36 473.91

469.32 466.87 371.09 468.82 479.27 455.01 499.99 446.81 364.29 499.99 499.99 499.99 429.87 462.24 460.62 499.99 499.99

499.94 499.94 499.94 499.94 485.51 396.04 499.94 494.51 499.94 316.30 454.55 499.94 499.94 499.94 499.94 474.02 499.94

500 377.02 500 500 500 473.42 500 500 500 454.61 334.52 500 500 500 500 433.02 500

500 500 500 397.23 500 500 500 500 500 500 500 366.08 500 411.54 441.27 500 500
500 500 439.78 500 500 500 500 500 429.88 500 500 500 372.88 474.54 500 500 415.07

500 500 467.58 455.56 500 500 500 500 462.25 500 500 411.54 474.54 407.02 437.85 500 500
461.70 458.65 450.53 442.29 474.12 443.83 500 433.60 460.63 500 500 441.27 500 437.85 398.92 500 500

499.99 446.46 499.99 499.99 439.63 499.99 499.99 477.30 499.99 474.07 433.07 499.99 499.99 499.99 499.99 362.43 499.99

499.1 499.1 499.1 499.1 499.13 499.1 459.28 472.86 499.1 499.1 499.1 499.1 414.17 499.1 499.1 499.1 369.34

Therefore, the Total Transmission Cost obtained will be the
sum of all the elements of the above matrix =
INR133133.9131 ≈ 10% of the Generation Charges.
It is to note that Table IV gives the total transmission cost
[ ] [
by multiplying PLG X C LG ]
IV. CONCLUSION
In this paper, three transmission network cost allocation
methodologies are compared using standard 24 bus RTS. A
complete analysis with a comparative study has been made
on all the three techniques.
Table I provides the transmission cost allocation to
generators by ZBUS technique. Table II shows the total
transmission cost allocation for all the generators and
demands by the first two techniques.
From table II, it is inferred that both the above methods
allocate most of the costs for using line 23 to generators 21,
22, and 23. This is because all the generators are electrically
close to that line, and their productions are comparatively
high.
It is also inferred that in both the methods, almost 100%
of the cost of line 11 is allocated to bus 7, split between its
generation and demand. This is because the only way in
which the generator or the load at bus 7 can inject or extract
i.e (A generator’s share in meeting a load)*(cost/MW in
transferring the said share (power) for the distance between
their location). Hence, there is no need of any details for
Table IV (row /column wise).
power from the network is through line 11, as it can be seen
from the single line diagram shown in figure 2. Both the
methods allocate most of the total cost of the network to
generators 21, 22, and 23.Considering that these generators
are the highest producers in the network and that they feed a
significant amount of the demand of the system. For the
demands, in both the methods, the network costs are mostly
allocated to demands 3 and 8. This is due to bus 3 and 8
having the highest demands, and they are located far away
from the main generators i.e. 21, 22, and 23. Therefore,
buses 3 and 8 use many of the lines in the network.
The RED method allocates the transmission charges
based on the relative location of load nodes with respect to
the generator nodes. This method is conceptually simple and
can be implemented using the network configuration and
generation/load conditions in a day-to-day operation of
power systems. The main advantage of this method lies in
its applicability to consider multiple contracts/transactions
simultaneously. Comparing the overall transmission cost

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 2013 International Conference on Power, Energy and Control (ICPEC)
obtained in all the three techniques, RED method is very
accurate in estimating and allocating the transmission cost in
the transmission pricing scheme. From the results, it is also
found that RED method is very effective in transmission
cost allocation.
V. ACKNOWLEDGEMENT
The authors acknowledge the support provided by the
Management of VIT University, Vellore, Tamil Nadu,
INDIA for carrying out this work.
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