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A deregulated electricity market involves a large number of power transactions amongst various participants. These transactions must be monitored and restricted to a limit decided by the transmission network capability. However, due to large size of the present day power systems, it becomes very difficult to monitor feasibility of all the transactions, especially when performed online. A sensitivity based static network reduction technique has been proposed which reduces the system size, thereby allowing fast and easy power transaction assessment. The extent to which a network is to be reduced can be controlled. The proposed technique has been tested on a practical Indian system network.