Modified MW mile method for pricing the transmission services by including transmission losses and variation in the load power factor

The electric supply industry has been undergoing drastic change right from 1980's. A significant feature of these changes is to create competition. The minor portion of the cost is governed by the transmission cost but creates a large impact over the Indian power market. It should be ensured that the transaction charges should be paid by users must be fair and accurate. In India MW mile is frequently used for pricing the transmission services. This method does not consider transmission losses and power factor of the load while calculating transaction cost. This paper presents you how transmission losses and power factor of the load affects the transmission charges by a case study of IEEE 30 bus system using MW mile method. This paper presents you the comparison of the transmission cost by incorporating transmission losses considering power factor with the cost without considering the transmission loss and power factor. It is necessary that the benefit of power factor improvement at the load end must be given to the user. This will encourage the users to operate their system at optimal power factor for receiving benefits. Users have to pay the penalty for poor power factor. Therefore this paper have included the transmission losses along with the term associated with the variation in the load power factor from the power factor set by the regulator in pricing the transmission services. Newton Raphson method is used to calculate the line flows and losses in an IEEE 30 bus system due to each transaction of power and finally cost is calculated using mw mile method after including losses and the power factor correction term.