This paper presents and analyses several methods for embedded cost allocation in deregulated electricity market environment. In this paper six embedded cost methods (postage stamp method, contract path method, MW-Mile, MW-cost, MVA-Mile, and MVA-cost) are evaluated and tested on 6-Bus test system subjected to two bilateral wheeling transaction. The charges obtained from the different embedded cost methods are then compared. Two tracing methods generalized generation distribution factor and generalized load distribution factor method are also discussed in this paper.
