Evaluation of transmission network capacity use for wheeling transactions

The authors describe the principles and the implementation of a methodology to evaluate the transmission network capacity use for firm transmission services including wheeling transactions. In this methodology, transmission network capacity use of a transaction is a function of the magnitude of electric power, the length of the transmission lines, and the type of facility involved in the transaction. This capacity value provides an equitable means of allocating the cost of transmission facilities among users of the firm transmission service. Through examples, it is shown that this methodology, called the MW-mile methodology, is more reflective of the actual usage of the transmission network in allocating the transmission network capacity cost than the now widely used postage stamp rate procedure. Also indicated is the potential for realizing greater economic efficiencies through the use of this methodology