Allocation of transmission fixed charges: an overview

Author

Lima, J. W Marangon

Author_Institution

Escola Federal de Engenharia de Itajuba, Brazil

Volume

11

Issue

3

fYear

1996

fDate

8/1/1996 12:00:00 AM

Firstpage

1409

Lastpage

1418

Abstract

The application of marginal cost in pricing the transmission services has shown not effective mainly due to revenue reconciliation problems. To overcome this, a set of other methods derived from the MW-mile rule has been suggested to allocate transmission fixed costs. This paper compares such methods known as embedded cost methods in a centralized transmission network environment. Although these methods actually share the total cost and are very simple, they are usually rejected due to the lack of a good economic reasoning. The economic issue and the impact on the system expansion planning of such allocation are addressed in this paper. Some examples with the Brazilian transmission system illustrate the results derived from this analysis

Keywords

costing; economics; power system planning; Brazilian transmission system; MW-mile rule; centralized transmission network environment; economic issue; embedded cost methods; marginal cost; revenue reconciliation problems; system expansion planning; total cost sharing; transmission fixed charges allocation; transmission services pricing; Cost function; Environmental economics; Heart; Investments; Power generation economics; Power system economics; Pricing; Samarium; Security; Voltage control;

fLanguage

English

Journal_Title

Power Systems, IEEE Transactions on

Publisher

ieee

ISSN

0885-8950

Type

jour

DOI

10.1109/59.535682

Filename

535682