Tariffs for reactive power supplied from distribution networks

This paper disserts the reactive power pricing for customers of distribution utility which provides sufficient revenue for reactive power transfer service and encourage customers compensate reactive power adequately. The price for reactive energy supplied from a distribution network is expressed as sum of the price of it supplied by the transmission network and the price of reactive power transfer service by the distribution network. The profit margin, the excise on electricity and VAT will be added. A practical methodology of calculating the variable and fixed components of the reactive power transfer service price under uncertainty is presented. The structures of tariffs on medium and low voltage levels are assessed.