In a de-regulated open access environment, reactive power is one of the ancillary services which must be provided by an Independent System Operator (ISO). In this paper, a new algorithm is proposed in which reactive power resources are initially so tuned that optimum security in terms of voltage profile and voltage stability are achieved while at the same time, the system losses are minimized. The resulting optimization case is solved as an Extended Multi-objective Optimal Power Flow (EMOPF) problem using Lexico Graphic Method (LGM). Thereafter, using the concept of Fair Resource Allocation (FRA), the reactive powers generated are distributed among existing transactions so that the costs incurred are properly and fairly recovered. The algorithm is successfully tested on a typical power system. Keywords: Reactive Power, Reactive Power Management, Reactive Power Pricing, Voltage Profile, Voltage Stability, Deregulated Environment, Open Access

Keywords: Reactive Power, Reactive Power Management, Reactive Power Pricing, Voltage Profile, voltage Stability, Deregulated Environment, Open Access.

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