In this paper, a method is proposed to assign transmission losses costs in pool-based electricity markets. This method is based on using the impedance matrix of the network and partial derivatives of the active power losses respect to bus currents coefficients. After performing load flow equations, the losses of each bus are calculated using the impedance matrix of the network and the injected currents from each bus. These losses are properly and fairly shared between network buses for fair loss allocation, in proportion to partial derivatives of the active power losses respect to bus currents coefficients. Finally, this method has been tested on a benchmark IEEE 14-bus network and the results are compared with the other existing methods.
