Pricing for load and wheeling charge considering transmission paths in deregulated power markets

This paper proposes a practical method to derive reasonable load prices and wheeling charges in a deregulated power market. The proposed pricing model not only ensures the recovery of expense for utilities, but also provides reasonable electricity prices for consumers. A competitive market environment is defined at the beginning of this paper to include independent power producers (IPPs), utilities and customers. The pricing model is formulated mathematically as a nonlinear optimization problem. Based on the optimal solution, the transmission path can be identified by investigating power flow with respect to generator outputs and load demands through sensitivity analysis. The proposed approach is applied to an IEEE-30 bus system, where the simulation results demonstrated that the proposed pricing strategy can also be used for the transmission congestion and loop flow problems.