A Theoretical Framework for Cost Allocations in a Monopoly System with Application to the Allocation of Transmission Losses

In this paper, fundamental characteristics of a general monopolistic service system with a simple structure are first investigated, and a theoretical framework for allocations of common costs is then developed. The concepts of "fairness" and "rationality" are characterized mathematically for the general cost allocation problem. Under the proposed framework, several available allocation methods of transmission losses could be well unified.published_or_final_versio