Consideration of the reliability benefits in pricing transmission services

This paper suggests an approach for allocating transmission transaction costs based on reliability benefits in transmission services. Transmission embedded costs, which allocate transmission transaction costs, should be considered not only by allocation based on transmission line capacity-use, but also by allocation based on reliability benefits. The transmission line capacity in an actual power system plays an important role in assuring system reliability. The proposed methodology shows how to allocate transaction costs of reliability benefits when transmission line capacity is considered. Moreover, the ratio between allocation by transmission line capacity-use and allocation by reliability benefits is calculated based on a reliability index.