REVENUE RECONCILED OPTIMUM PRICING OF TRANSMISSION SERVICES

This paper describes a methodology for evaluating an optimal set of tr ansmission prices, to be charged for use of a transmission system on a time-of-use basis. The transmission prices are determined by maximisi ng the global benefit of using the transmission system that allocates both capacity and operational costs. The security considerations are e xplicitly taken into account by incorporating security factors in the algorithm. The important issue of revenue recovery by the transmission utility is addressed by modifying the optimum prices without affectin g the consumer behaviour. This can be achieved by setting the prices w ithin indifference intervals over which consumers are insensitive to t ransmission prices. Application of the methodology is illustrated on t he IEEE 24 bus test system.