Implementation of modified MW-mile method for transmission cost allocation by incorporation of transmission losses considering power factor

MW-Mile Method is frequently used for allocating the transmission cost among the users. This method is formulated based on the actual usage of transmission network by each user. But, this method allocates the unfair charges to the users as it doesn't consider the transmission losses and the variation these losses according to the user power factor. In this paper MW-Mile Method is modified by considering the transmission losses and the variation of the losses according to the user power factor. Improved DC load flow algorithm is used for getting the transmission losses. For accounting the variation of transmission losses with reference to the variation of user power factor, Transmission loss correction coefficient is formulated for the first time. The proposed method is tested on an IEEE-14 Bus system for allocating the transmission cost to each user and observed that the transmission cost is allocated fairly.