Allocation of transmission charge by using MVA-Mile approaches for restructured Indian power utility

Transmission of electricity across the system plays a critical role in making the power available to the consumers. One of the critical issues in the liberalization of the electricity market is the way in which transmission costs are translated into tariffs. The Electricity Act, 2003 mandates that the national tariff framework implemented should be sensitive to distance, direction and related to quantum of power flow. Flow-Mile method rates explicitly reflect the fact that the cost of transmission depends on the distance and how much power is transmitted. Traditional regional postage stamp method of transmission pricing in India do not price transmission services accurately because they fail to take into account the total effects of the transaction on the network. Flow-Mile pricing involves load flow analysis to model the power flows on the transmission network to determine transmission charge. This paper expands upon the MW-Mile method into MVA-Mile method that is currently subject to considerable discussion and is under review by a number of researchers.