Allocating distribution losses to customers using distribution loss factors

The methodology actually established in Spain's electricity industry legislation for considering energy losses is based in allocating to each customer a percentage of losses, taking into account its consumption characteristics (voltage level and load curve structure). This allocation is made by multiplying the end-use meter data of the customer by a standard Distribution Loss Factor (DLF). The methodology used dates back to the previous regulatory framework and obtains a DLF structure that has no contrast with reality. Additionally, the application of the methodology is confusing, it has a lack of transparency and takes into account in the same DLFs distribution and transmission losses. Due to changes related to the industry regulatory framework since 1998, there has been a move from a state owned regulated industry to a market focused one, the present methodology used for DLFs calculation is not satisfactory. In this paper, the authors propose a new methodology for DLFs calculation that is adapted to the new regulatory framework.