In the last years, several studies about network allocation considering cross-border exchanges in Europe and Asia have appeared. For example, in Europe, there is a need to find a robust and fair mechanism for Inter-Transmission System Operators (Inter-TSO) compensation in the European internal electricity market to replace the provisional European Transmission System Operators (ETSO) mechanism. One of the main challenges is that the system operator of each country does not have information about the electrical networks of other countries, making the application of any network cost allocation method difficult.

One of the key problems of energy transmission system in an independent environment refers to necessity to establish a cost for system services on nondiscriminatory bases. The prices must to be simple and transparent. A properly established cost provides economical signals for short-term and long-term recovery current expenses and for a fair cost allocation for participants. This paper presents allocation of transmission costs to consumers and to generator using the distribution factors method. A detailed comparison between regime with active losses and the regime without active losses are presented. A case study based on a 12-node system is provided.

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In most countries the electric power industry has been undergoing through drastic and dramatic changes. The electrical utilities have been structured in separate generation, transmission and distribution segments bringing in a transparency in the utility business. Depending on the market structure of each country, the individual segments have also to compete in liberalized markets. I. INTRODUCTIONThe transmission open access makes the power system a complicated mechanism in power system restructuring. A major issue in transmission open access and international electricity markets is represented by transmission cost allocation. The use of transmission network by generators or consumers is associated with the connection charge and represents operation and capital cost, loss compensation costs, internal congestion costs, costs of supply of system services, costs of system balancing and stranded costs [1].The transmission costing [2] may vary from a simple postage stamp type model over MW-Mile method to complex power flow based models. Postage stamp, also know as pro rata [3] is the simplest design, and hence the most common in immature markets. The MW-mile method [4] is an embedded cost method and calculates charges associated with each transaction. Distribution factors are calculated based on linear load flows, being used to been used to approximately determine the impact of generation and load on transmission flows. The traditional distribution factors method was extended to AC power flow evaluate the active and reactive power flow [5][6].Other flow-based methods are Bialek, Kirschen and EBE methods [7][8][9][10][11][12]. Bialek, Kirschen methods use the proportional sharing principle [7], [8], which implies that any active power flow leaving a bus, is proportionally with the flows entering the bus. In EBE method, each generator provides a predefined fraction of power to each demand receives a predefined fraction of power and each consumer receives a predefined fraction of power to each generator. The international trend is toward the use of location-based or flow-based methods to allocate and recover at least some portion of transmission costs. In Romania, TSO Transelectrica uses pro rata method.The main objective of this paper is to study and discuss the three methods: Bialek, pro-rata and distribution factors method. A comparison between pro rata, Bialek and distribution factors method, for transmission cost allocated to generators is presented. All methods are applied independently both for real power, based on complete AC power flow. The case study