Optimal transmission pricing with reliability indices

In a restructured market, reliability cost, as a separate service, has not received much detailed analysis. Many issues such as transmission pricing, transmission loss allocation and congestion management have introduced. Many methodologies and algorithms were proposed for addressing these issues. In this paper Matrices methodology which is based on graph theory is proposed for the transmission usage and Transmission Reliability Margin (TRM) allocation for generators. This method provides TRM allocation in a direct way because all the computation is previously done for usage allocation. The proposed method is also used to allocate transmission usage to generator based on the contributions to line flows under normal conditions and under contingency conditions. For this purpose Line Outage Impact Factor (LOIF) is used. By this optimal flow of transmission line is calculated. For transmission usage cost allocation modified MW-Mile method is used. A comparison between proposed method and already existing methods also presents. Sample 6 bus system is used to explain the feasibility of the proposed methodology.