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The cost of wheeling and the methodology by which it is computed is a high priority problem throughout the power industry due to the growth in transmission facilities, the cost differentials between utility companies, and the dramatic growth in nonutility generation capacity. This paper contains descriptions and summaries of computational procedures and data requirements of four embedded cost methodologies, two long-run incremental cost methods and the short run marginal cost method. Four methodologies are also presented for allocating the wheeling costs among a number of wheels when simultaneously present on a company's system as required for the standard long-run incremental cost method.>
H.H. Happ (Sat,) studied this question.