Minimum uplift assignment of transmission charges to beneficiaries

In coining years, electric transmission networks will likely be expanded at an unprecedented rate to accommodate growth in renewables and to replace aging infrastructure. Plans have already been developed to build significant transmission in Texas. However, these plans were developed without formal network optimization approaches, and the intention is to socialize the cost of transmission expansion. In addition to the need to adopt formal optimization methods, there is a pressing need to better relate benefits of transmission to charging of beneficiaries. In this work, we use the dual of the integer optimization problem of expanding transmission in order to set prices that "cover" as much of the total expansion cost as possible with linear prices. The remaining cost, due to the duality gap, could be socialized. This approach would explicitly price a much larger fraction of the total costs than current approaches, which generally default to socialization, improving the incentives for use of transmission. Basic theory and small examples will be developed.