Transmission tariff allocation using combined MW-Mile & Postage stamp methods

The transmission tariff function will facilitate competitive electricity market by impartially providing energy transportation services to all energy buyers and sellers, while fairly recovering the cost of providing those services. Transmission tariff is more fairly and transparently allocated in order to get full recovery of ARR of transmission facilities by using combination of MW-Mile and Postage stamp method. There are number of variants of MW-Mile method i.e. absolute, dominant and reverse are combined with postage stamp method to allocate the transmission tariff. In this paper a six bus network is used for simulation purpose with two cases of demand variation. It is assumed in this problem the load customer pays the 100% cost of transmission services to the transmission utility. Simulation and results are obtained by using Matlab. Transmission tariff for each load bus is evaluated in all three combinations of MW-mile with postage stamp for each case of demand variation.