Allocation of network losses to variable electrical loads

In a de-regulated environment, electricity is treated as a commodity-bought, sold and traded. Not only will the price fluctuate with time, but it will vary with both customer and source geographical location. Therefore, an accurate calculation of electrical resistive losses associated with each customer load is important to correctly allocate the appropriate amount of network resistive losses and associated costs to completely unbundle the cost of providing such service to the respective customers. An environment of competitiveness provides a choice of supplier to customers. The correct allocation of all costs associated with the delivery of the commodity may mean the difference between customer retention and customer loss. This paper addresses the nonlinear characteristics of electrical line losses due to variations in magnitude of load currents and provides a novel methodology of allocating such losses appropriately to respective customer loads