Sudha Balagopalan S Ashok K. P. Mohandas J. Electrical Systems x-x (2009): x-xx Regular paper Viewing Power flow in an Electricity Market as Confluence of Stable Multilateral Trades This paper contributes a new method to appraise the impact of trades in an electricity market within multilateral trade structures. We propose that the conventional power flow problem be redefined or re-interpreted as a consequence of a confluence of trades, coordinated by the Transmission Provider (TP). Though commerce of power is between end-users, impact is on the facilitator of competition, the grid. The TP prevents abuse of the network using Transmission Service Charges (TSC) modelled as a flexible financial instrument as per market engineering principles. Our scheme envisions formation of stable coalitions based on fruitful synthesis of separately evaluated trades. We finally illustrate our methodology with a 5 bus and 24 bus examples in a cooperative game theory (CGT) environment. . Keywords: Cooperative Game Theory, Multilateral Trades, Restructured Electricity Market, Transmission Service Charge. 1. Introduction Electricity sector restructuring [1], raises some pertinent issues when all aspects of energy production, transmission, distribution and planning become disintegrated business functions. Effects of fragmentation aggravate further in transmission restructure [2], since operational procedures, computations and decision analysis, impact evaluation, pricing techniques, and real time and expansion planning are all influenced by the transactions of individual and separate traders in a market. Conventional power flow (PF) analysis is fails when borders blur between state, control and disturbance vectors in the new scenario. In this context, the familiar PF problem is viewed as an outcome of confluence of all trades. The idealized market is built on unfettered competition, customer choice, innovation and guaranteed economic efficiency. The pool market models, though widely preferred, is [3] potentially a monopsonist; even a cartel. Also economic efficiency, through competition is possible in multilateral trades [4]-[6] in power sector since economic data is kept private. In this paper we model the restructure of transmission sector in a multilateral trade atmosphere. Two premises are defined, [7], that of end-users as local agents and the central TP. Every transaction is viewed in the context of a confluence of trades. Transmission prices based on market mechanism are designed [8] to evolve as a choice. Market operation is also a matter of choice via coalition formation in a CGT environment. Graph theory is used to derive power vectors [9] to spot powerful partners [10]-[12] and for estimating allocations and liabilities. Pay-off vectors are derived to share TSC, viewing impact as a confluence of trades to ensure maximum social welfare, and stable operation. We first outline why power flow is seen as a synthesis of trades or vice versa i.e. why flow in each line has to be split up to be viewed as the effect of several trades. In section 3 tools and methodologies and computations used in this paper are given. We construe power injections and withdrawals at buses as various trade combinations as a mathematical model in section 4. Then Ramsey Pricing methodology is presented to view power flow as a confluence of trades in the coalition stage. Next, the construct of the total transaction from the various trades is described using a 5 bus and then a 24 bus case. A method to split