Allocation of fixed transmission costs among generators: a what-if analysis based method

This paper proposes an economic indicator we called assistance ratio which could be used to assess the part of fixed transmission costs to be allocated to "assistance", or short-term, users as opposed to "normal", or long-term, users in a transmission pricing system based on a postage stamp method. Short-term users are mostly consumers having their own generating plants, so they produce flows on the network only when their facilities are out of order. The indicator is calculated as the ratio of the cost of the virtual network which would be needed to convey assistance flows if all generating facilities were located close to the loads and the cost of the actual network. A case study is carried out on the 24-bus IEEE Reliability Test System.