> REPLACE THIS LINE WITH YOUR PAPER IDENTIFICATION NUMBER (DOUBLE-CLICK HERE TO EDIT) <

Abstract—This paper presents a pricing model considering the simultaneous interaction of pool, bilateral and reserve markets in a power system. The model is adapted to work through a ‘pay as bid ’ (PAB) pricing approach that is currently being considered as an option for pricing in some actual systems. The combined market is settled through an AC Optimal Power Flow (OPF) that accounts for power generation (pool and bilateral contracts) and availability of reserve services. As a result, prices of energy and reserve services incorporate the influences of the transmission network such as topology, voltage levels, losses, generation and transmission capacity limits. Results show that with this model agents can better plan their portfolios based on prices that reflect the costs of resources considering several operation scenarios and bid strategies