JEE_V8_N3_RP4 P. Srinivasa Varma V. Sankar Journal on Electrical Engineering 2230 – 7176 8 3 31 39 Linear ATC, Enhanced Linear ATC, ATC Computation, ATC Cost Allocation, Power Transactions The information on network capability is required for demanding use of the network reliably. Hence, fast and accurate methodologies are needed for computation of network capability. Available Transfer Capability (ATC) is the measure of system capability which remains with the system for further transactions. Generally, the methodologies for computation of linear ATC are not considering the effect of reactive power flows in the network. In this paper, a methodology which considers the reactive power flows for the Enhancement of Linear ATC (ELATC) is presented. In this paper, a novel concept of ATC and its cost allocation based on power transactions is proposed. The sample 3 bus system is used as a case study for theoretical analysis. Another case study i.e., IEEE 14 bus system is used for simulation analysis. The MATLAB program has been developed and the simulation results are presented and compared. January - March 2015 Copyright © 2015 i-manager publications. All rights reserved. i-manager Publications http://www.imanagerpublications.com/Article.aspx?ArticleId=3165