Transmission cost allocation with and with out losses in restructured power system

This paper focuses on the transmission cost allocation procedures with and with out real power transmission losses and provides a comparison of two alternative methodologies; Flat Rate based method i.e., Postage Stamp (PS) Method and Power Flow based method i.e., Proportional Sharing Principle (PSP) Method. Algorithms have been developed and implemented for cost allocation based on these two methods. These two methodologies are illustrated on sample 3-bus system and IEEE-24 bus system. The simulation results obtained from the MATLAB program are analyzed.